National Bank enters used-car finance with variable and fixed rates

National Bank has quietly entered the world of used-vehicle finance offering longer amortization periods at “advantageous rates.”

Amélie Rivet, National Bank’s manager of consumer financing services, said the product is different from other financial institutions which is helping it stand out in a crowded finance market.

“We don’t base the interest rate on the amortization that’s chosen by the client, which is a great advantage for the merchant and the client because it gets the client greater buying power,” Rivet said, adding that the amortization period – from 24 to 96 months – depends on the car’s age.

Eligible cars can be as old as the 2006 model year.

In other words, the bank wants to finance used cars. And she said the bank would supply financing to independent operators as well as new-car dealers.

Interest rates available fluctuate from month to month, she said. But they’ll be the average bank rate that’s offered in the market. To help the car buyer get an agreement that’s appealing, both fixed and variable rates are available and there’s no penalty or fee for early repayment of part or all of the loan, she said.

Payment frequencies vary: weekly, bi-weekly and monthly.

And to make the customer feel at ease, she said they wouldn’t have to deal with nameless, faceless people on the phone. The bank will assign the loan to the branch nearest the customer.

“The customer will be able to get advice from the branch. They will find it’s easy to change payment frequency and amount and be able to get their questions answered,” she said.

On the dealer side of the relationship, National Bank has a full complement of business development managers in the field, with a BDM assigned to each participating dealer.

The bank’s service centre is in Montreal, but six-day-a-week service is available from coast to coast. She said business managers could expect decisions on 70 per cent of loan apps within six minutes.

“Our loan officers are experienced and come from a background of dealing with a  wide range of banking loans, mortgages and personal loans. They have a broader sense of what’s in the market.”