New car financing figures are a roller coaster. Rises for the LOA and a tumble for the affected credit, according to the latest figures published by the French Association of Financial Companies (ASF).

Overall, the financing of new cars (appropriations allocated + rental with option to purchase) posted + 9.4% in March 2017, i.e. 787 million USD of production. Restricted credit and LOA are two types of consumer credit. They work differently. Borrowed enlightens you.

LOA vs affected credit

LOA vs affected credit

The LOA allows you to rent the new vehicle for a fixed period with the option to acquire it at the end of the rental period. The borrower does not directly own it. The residual value is provided for in the LOA contract as well as the maintenance procedures, mileage, etc.

The credit allocated is directly linked to the purchase of the vehicle. The borrower is the owner. The ASF indicates in its monthly investigation that the sales of new cars financed by a restricted credit are mine gray. They recorded a decline of -18.9%, with production of 223 million USD. Unlike the LOA, which climbs + 26.9%! Proof of the attractiveness of this car financing solution for individuals with 564 million USD of production.

The used car market also recorded good growth with + 9.2% and 344 million USD produced. The sector reveals a beautiful month of March, depending on the operations.

Buy a car with a car loan

Buy a car with a car loan

According to a CSA survey for the consumer credit comparator Lite Lender, 19% of French people want to buy a new car in 2017. Among them, 57% plan to take out a car loan for financing. This can therefore be an assigned credit, a personal loan or an LOA. To choose, it all depends on the use you want to make of the vehicle.

The choice LOA vs consumer credit

The choice LOA vs consumer credit

“Of course it is a question of comparing the two solutions economically, but not only. LOA corresponds to a different mode of consumption which is gaining more and more followers ”, underlines Cécile Roquelaure, Director of Studies and Communication of Borrowing. If you want to change your car regularly, an LOA can be more attractive than a more conventional car loan.

“But we must also be aware that professionals are pushing this method of financing because it facilitates access to the offer and therefore to the revival of the market,” she concludes. Conversely, with a classic car loan you own the property and are free to use it.

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