The annual percentage rate of title loans has reached a new low- my link. It is an average of 2.94 percent in the current year. This is 2.03 percentage points less than in 2012. This is the result of an evaluation of the credit portal Smava.
Alexander Artopé, co-founder and CEO of Smava
Despite lower interest rates, Smava CEO Alexander Artopé warns: “The interest on car loans has reached a historic low. Nevertheless, there are still interest rate differentials of more than 4 percentage points. Car buyers are therefore well advised to compare offers from various dealers and banks. “This is all the truer because the car prices have risen significantly. New and used cars are up to 14 percent more expensive compared to the previous year. This is data from Germany’s largest vehicle market mobile.de.
Car buyers should not speculate on further large interest rate cuts on car loans
According to information from Smava, the average car loan 2018 currently stands at 15,083 euros and has a term of 67 months. On average, it costs at an average APR of 2.94 percent currently 1272.71 euros in interest. In 2012, car buyers would have paid 2169.28 euros in interest for the same loan. That’s a price difference of 41 percent. The cause: The effective annual interest rate on car loans has dropped significantly. In 2012, he averaged 4.97 percent. On average, it is 2.94 percent in the current year. It is not excluded that interest rates will continue to fall. However, interest rate cuts seem to be coming to an end. Compared to 2017, the effective interest rate fell by only 0.08 percentage points on average. Car buyers should therefore not speculate on further large interest rate cuts.
Despite low-interest rates: interest margin goes from 0.69 to over 6 percent
The large interest rate differentials are not just related to the different credit ratings of borrowers. There are also large differences in interest rates within the rating classes: for example, with the best credit rating, there are 4.5 percentage points of difference. The interest margin, in this case, is between 0.69 and 5.19 percent. This is the result of data from FMH Finanzberatung and the credit portal Smava. Despite the best credit rating, this results in the average car loan a difference in price of € 1,971.45 (87%) between the cheapest and most expensive credit.
“The majority of borrowers can not know anything about these drastic interest rate differentials. The credit market is too intransparent. No borrower can oversee it alone. As a result, consumers spend more than € 2 billion a year on their loans, “says Artopé. “Credit comparison calculators absorb this loss. They create transparency and help find the cheapest loans. ”
Car buyers should compare combined and individual offers from different dealers and banks
According to data from the mobile market mobile.de, petrol cars, in particular, have become significantly more expensive compared to the previous year. A comparison of April 2017 with April 2018 shows: At 13.90 percent, used gasoline cars rose the most in price. The prices of new car gasoline have increased at 13.63 percent similarly strong. Diesel new cars have also become more expensive. At 7.88 percent, however, the price increase is significantly weaker than for gasoline. The prices of used diesel vehicles fell by minus 1.52 percent.
Car buyers are well advised to compare the prices of cars and loans of several dealers and banks in the large interest rate differentials and price increases. This should include both combination offers (cars & credit) as well as individual offers for loans and cars. This is the only way to tell which variant has the lowest cost.