In a previous post I explained why we decided to buy a new car which is usually a big No No in FIRe circles. But not only did we buy a new car, we actually wanted it financed! Something that is an ever bigger NO NO in FIRe circles.
The reason for wanting to finance the new car was pretty simple: 0% interest rates! Yes, thanks to our current low intrest environment you can actually borrow at 0% to buy a car!
You see, I have also always been of the opinion one should only borrow for the purchase of a house (and even then keep your borrowing amount low). But the low intrest environment we are in has definitely changed that. If possible I would be financing everything I buy at 0%!
Buy now, pay later! Much later preferably!
Unfortunately you can not finance everything at 0%. But a new car, that was definitely possible!
As a side note, am I the only one that finds it very strange that 0% car loans exist but that mortgages are still between 1% and 2%? Surely a car loan must be more riskier than a mortgage. Houses, for one thing are rarely involved in total loss accidents.
Loan declined
Unfortunately borrowing for the car was not possible.
We have no idea why not. You see Renault does not actually provide the loan. They use Alphacredit. Which are, and I am choosing my words carefully here, a bunch of assholes. They are assholes because they refuse a credit and then do not tell you why. Apparently, by law, they only need to give you the sources they checked and that is it. In our case that was the National bank of Belgium which keeps a tab on all open loans a person has. You can check this database yourself and as expected we only have our mortgage there. Which is logical since we have never borrowed for anything else than that. We also pay that mortgage on time. I have spend a lot of very annoying phone calls to Alphacredit and got exactely nowhere. The customer support you get is very well trained in not giving you any more information than, ‘here is the list we checked and used to come to our decision about your loan’.
Even now, 8 months later, I still have no idea why the loan was refused. My net worth is around 350,000 euro, I am on track to save 10,000 euro this year (and that is just me, the loan would have been both on my name and the girlfirend) but apparently I am no good to loan 7,000 euro at a 0% rate …
The only thing we can think of is that somwhere somehow there was a mix up with somebody else because when registering our information the garage owner said we appeared to have a file at the internal bank of Renault itself. Which isn’t logical as neither of us have ever bought a car from Renault. Or had any other dealings with Renault.
I have to admit I took this pretty personal. I mean finance is kinda ‘my thing’ and then being refused for a petty loan really, really annoyed the hell out of me. But after banging my head against that wall for a few weeks I decided it wasn’t worth the time and frustration so we just paid the car in cash. The whole ordeal did change my mind about the size of our emergency fund, it’s back to 10,000 euro now!
Still bummed I didn’t get the 0% loan though!
One thing I did notice that the sales person at the garage got really worried when she had to tell us the loan was refused. I got the impression that this wasn’t because the bad news she had to tell but more being worried that she would lose the sale … is a 11.000 euro purchase reall that big a problem for a lot of people? I mean, I would have preferred to spread it out over 3 years at that sweet, sweet 0% intrest rate but after my double bonus and holiday money (and not going on a holiday) my part of this purchase isn’t more than a one time blip in my excel overview. Are we FIRe people really that far from the norm?
Thanks for starting to blog again Sloth! Did you get an extra discount for paying upfront the full amount? Usually they give a loan or they can pinch some euro’s from the offer.
Well the 0% loan was a promotion. Which I didn’t get …
You are probably the first Fire adept she has ever seen
Probably, also, on the application is send it is completely out of her hands so not much she could actually do.
There are many people out there that are less good with money and/or less lucky than we are.
There are many adults that struggle to finance anything over 200 euro. We just don’t encounter them often in our bubble of highly educated workers.
A net worth of 350000 is something many people can never even hope to achieve. Except after winning the lottery.
Maybe your credit is TOO GOOD to give you a 0% loan. They might aim at people that are likely to miss a payment here of there so they can charge them a 12 % late fee to make money. credit companies don’t exist to help people, but to make money.
Well the tought did cross my mind that Renault might like to advertise with a 0% loan but doesn’t actualy likes to give them and thus has most of the requests denied …
On the otherhand the salesperson did look genuinely worried she might lose the sale. I don’t knwo if ther is a Renault dealer or a alphacredit employee among my readers who coudl shed some light on it? After the post I did ask all the data alphacredit has on us. As expected, only our mortgage loan is on record with them, what they didn’t have was our employer and wages which is strange as we definitely gave them to Renault. it is also strange with me calling frequently not one of the customer people would say, hey we are missing your income data, put in a new application with that and evrything will be approved.