Auto credit accounts for 70% of new vehicle financing. Leasing and long-term leasing is nibbling more and more market share.
The average price of new cars up
With more than 38 million vehicles registered in 2016, the French car fleet is continuing its expansion momentum. The car has become indispensable for the citizens of the Hexagon and in particular for the workers. Indeed, unless you work in an urban area well served by public transport, the car can bring rural areas closer to cities. But the cost of acquiring a car remains an important budget. Whether it’s for a student, a young worker or new parents, buying a new or used vehicle is a huge expense.
Yet, the French buy cars that are worth more and more expensive. In 2015, the average price of a new car was 25,108 euros, an increase of 27% over the previous year. Since not everyone is able to pay for a new car for cash, there are financial alternatives to cover this purchase. The loan for a car or car loan is the solution widely used by the drivers of the Hexagon.
Classic credit, leasing, LLD: every driver financing
According to a recent study commissioned by car manufacturers, the French resort to auto credit for 70% of new vehicles for individuals. If the loan is mainly used, it still knows a loss of speed. Indeed, the conventional formula of the car loan is seen more and more competed by the new modes of financing that are the LOA and the LLD. Lease with option to purchase (LOA) and long-term leasing (LLD) are a real success with the 40 million motorists in France (respectively + 18% and + 26%).
Although these are two forms of credit, the LOA and the LLD do not have the same purpose. At the end of LOA contract, the tenant can buy his vehicle, which however is not possible with a long-term lease. Despite this, 62,000 vehicles have been sold in LLD since the beginning of the year. For the LOA, the study counts 100,000 new cars. Between car loans, long-term leases and leased purchases, motorists are now spoiled for choice to drive a vehicle that meets their expectations.