Half of consumer credit in Portugal goes on cars, almost always used ones. The three ways to finance have different maximum rates and different small print. Here they are side by side.
Three routes, three prices
For the 3rd quarter of 2026, Banco de Portugal sets the maximum APRCs as follows: car loans for new vehicles 10.9%, for used vehicles 14.1%; finance leasing or long-term rental (ALD) of new cars 5.1% and of used cars 6.6%.
Leasing and long-term rental are cheaper because the car is not yours until the end: the bank or leasing company stays the owner and you pay for the use. With a classic car loan, the car is yours from the start, usually with retention of title in favour of the bank until you pay it off.
What each one is, in plain terms
- Classic car loan: a loan with the purpose of buying a car. The car is in your name, with retention of title recorded in the registry. You can sell, but you have to pay off the loan first.
- Leasing (finance lease): you rent with an option to buy at the end for a residual value. Lower instalments, car in the leasing company's name, mileage and insurance set by the contract.
- ALD (long-term rental): you rent for 2 to 5 years, then hand the car back or buy it. Often includes maintenance. Good for people who change car often, bad for people who drive a lot.
A worked example
- At a well-negotiated APRC of 8%: about €304 a month, €18,250 in total.
- At an APRC of 14.1%, the legal maximum for used cars: about €350 a month, €21,000 in total.
- That is a €2,750 difference for the same car. Dealership finance comes wrapped in the price; always ask for the APRC and the total amount payable in writing.
Dealership finance is not always worse
Dealerships have agreements with finance companies and sometimes get promotional rates on new cars, especially when the brand subsidises the campaign. Other times, the "0% rate" hides in a car price with no discount, or in payment protection insurance that doubles the instalment.
The rule is simple: ask the dealership for its offer with APRC, total amount payable and all the insurance, and compare it with a bank offer for the same amount and term. If the dealership wins, great. You will only know if you compare.
New or used: what changes in the loan
Loans for used cars are more expensive because the car is worth less and loses value faster. On cars more than eight or ten years old, many banks limit the term or ask for a deposit. On new cars, the term can go to 7 years, but a new car loses a lot of value in the first two years: on long terms, you can reach the middle of the contract owing more than the car is worth.
Checklist before signing
- APRC and total amount payable in writing, on any of the three routes.
- Deposit: the bigger it is, the lower the rate and the lower the risk of owing more than the car is worth.
- A term aligned with how long you will keep the car.
- Compulsory and optional insurance itemised.
- Early repayment fee and the conditions for selling the car before the end.
- On leasing and ALD: mileage limit, residual value and return condition.
Frequently asked questions
Can I sell a car with retention of title?
Only after paying off the loan and having the bank lift the retention in the vehicle registry. In practice, the buyer pays the bank and the remainder to you.
Is a deposit worth it?
Almost always. It reduces the amount financed, the rate and the risk of the car being worth less than you owe. A 20% deposit is a good benchmark.
Does the Guru handle car finance?
Yes, with the partner banks and at no cost to you. We compare against the dealership's offer, if you already have one.