Rent or buy? In both cases, solutions exist for individuals who want, in the future, to own a vehicle without spending all their savings. Two systems are possible: the lease with an option to purchase and the car loan.
In the long run, buying a vehicle is always more profitable than renting. Because, if you have to pay more money at the beginning, the owner can resell his property at term and at the price that suits him. While in a rental, the rent paid is lost forever. Individuals wishing to acquire a vehicle now have several options to become owners:
The main advantage of renting with a purchase option (LOA) or “leasing” is that it allows you to have a new car and to change it regularly. At the beginning of the contract, the customer must pay a contribution that equates to 10 to 15% of the price of the car. The lease can last up to five years and every month the tenant pays rent.
At the end of the contract, the tenant can become an owner if he decides to lift his option to buy. He must then pay a deadline or 5 to 10% of the price of the new. Throughout the duration of the lease, the user must respect a mileage defined in advance, which can be binding. If exceeded, the amount to be paid is often high.
Auto credit is still today the most popular solution for the French to buy a car.
Auto credit allows individuals not to shell out a large sum at one time and can apply for a new or used vehicle. The principle is simple: the repayment of the credit is done monthly and according to the terms agreed with the lender, whether it is a bank or a specialized institution.
In France, interest rates for auto loans are generally cheap: they are around 6% over 4 years. The repayment period is fixed, which allows you to organize your finances. It can spread over a longer or shorter time depending on the case. As soon as the loan is granted, the borrower becomes legally the owner of the car.
Advantages and disadvantages of renting with the option to buy
The amount of the monthly payments is lower than that of a car loan: one pays the use and not the property. These lower costs allow individuals with low repayment capacity to easily have a vehicle.
The LOA is a flexible solution that allows you to change your vehicle as you wish.
The duration of the contract and the mileage are defined according to the needs of the tenant.
Exceeding the mileage set on the contract can be costly.
Even if he is not the owner, the tenant is legally responsible for the rented vehicle.
When the LOA contract comes to an end, the user will pay more to acquire the car than if he had bought it on credit from the start.
Advantages and disadvantages of auto credit
Purchase on credit or lease with an option to buy? The choice depends on the profile of the buyer. The LOA allows people with low repayment capacity to be transported without having to go through traditional financing methods. This option may be of interest to people who need a car without wanting to invest. But the main disadvantage of leasing is that, eventually, if the tenant wants to become an owner, he will pay more than if he had bought on credit.
Regarding the purchase on credit, it is possible to make a simulation of borrowing in a few minutes thanks to our simulator below. Good to know: getting a car loan is more advantageous if you have funds at the start and you are certain to be able to repay the loan each month.
Finally, the dream car is found. Unfortunately, the funds are not enough to buy. However, many car dealerships offer a loan for the new car with low-interest rates. Anyone who is clever does not immediately access the dealer bank’s offer. There is a trick to get the new car cheaper. With a car loan from an independent bank, the purchase price is reduced, because the car dealerships still grant a discount on the purchase of a car. Who wants to miss it?
Dealer credit or bank loan?
A new car is more expensive than a used vehicle. Many car buyers like to use the financing offers of the dealer banks, without having to look around. The interest rates are tempting and why should they give up such an offer. They miss an important advantage, the discount. With a loan for the new car with an independent branch or on-line bank can be saved despite higher interest perhaps still on the purchase price.
The discount is only for a cash payment. However, the car buyer can no longer act as a cash payer with financing from the car dealer. This is only possible if the loan is taken out at another bank. If you are smart, take a loan comparison and get informed about the conditions of other banks. But you should not make the mistake and assume different maturities. Calculated, a longer term for the monthly load better, but it increases the cost of the loan for the new car.
Beware of the residual debt insurance
The banks are happy to offer the customer a residual debt insurance. This makes the car more expensive, because it is added to the loan amount, which also has an impact on the annual percentage rate. Ultimately, it depends on the purchase price, whether the borrower wants to hedge. If the bank insists on such a hedge, then one should look for other offers. Unfortunately it is a bad habit that banks refuse a credit despite good creditworthiness, if the completion of a residual debt insurance is not desired by the borrower.
Meanwhile, word has spread that the processing fees may no longer be calculated. Unfortunately, some banks still practice this practice. Again, keep away from these offers.
The balloon financing
Sometimes a balloon financing may be necessary. This loan for a new car convinces by low monthly installments. The big end comes at the end when the remaining purchase price is due. Balloon financing is usually used by buyers who only have an average salary. The lower rates allow buyers to afford a car that they would not have been able to finance before.
The balance must be paid after the end of the term. But there is also the option to pay this sum in installments. Whether that is to be recommended, the buyer must decide for themselves. Finally, there are two interest rates. Once for the actual loan and then again for the follow-up financing of the balance.
All calculations stand and fall with the credit rating. Every bank, including the dealer bank, asks the Private Credit. Without a credit rating, there is no credit for the new car. Many consumers do not know what the Private Credit has stored about them. A look in advance is worthwhile in case of doubt.
Not only in the case of a new car purchase is good advice for many consumers expensive and car loan often the only viable solution. For even a small car is often associated with a purchase price in the five-digit range. With a normal income, such expenditures are hardly bearable, especially since the running costs naturally also continue to accumulate and must be borne. A car loan is no different than an earmarked installment loan .
A car loan is therefore usually the best chance for financing – by the way, even in a used car.
Car purchase without credit hardly possible
Financed car will be picked up
Even a well maintained car has to be replaced at some point, even if some owners like to postpone this idea. Often it comes then to the acute need, if you least expect it and the funds for a new vehicle missing. The financial requirements for the car purchase are high. Many households can not save money to buy a new (used) car. This problem is not only known to people with low incomes, even with an average salary, the car purchase is not readily feasible. Of course, the desire of the vehicle decides what the chances are with the financing and what capital needs result from the planned purchase.
Car loan from the car manufacturer or car dealership
Blanket statements can also hardly be formulated, especially in the field of car loans. However, experience shows that the average car loan from the manufacturer or a partner bank is not always the ideal variant of vehicle financing . The house banks of the providers are not always the cheapest, so you should definitely make a credit comparison, rather than hastily accept the first offer. Although car dealers are happy to recommend their partner banks, but sometimes rather because of the commissions that wave for the brokerage of new borrowers. However, the recommendation should not be misunderstood as the only way. If I find a cheaper lending model elsewhere, it must also be recognized for funding.
→ Ask not only the house bank for an individual loan offer!
Home bank loans can offer cheap car finance
The gang only long-standing house bank is close, but is not always promising. Nevertheless, an offer from this body for the car loan and the further comparison can be a first reference in order to have a basis for orientation in the first place. The advantage of personal advice at the house bank or another branch bank is that in the course of a negotiation a certain amount of leeway can be exhausted for the total cost of car loans. It has a positive effect if you can already present favorable offers from other financiers in such loan talks. So the bank may prove to be negotiable.
Car cash payment?
A point that speaks against lending from the manufacturer or the house bank of the dealership, is unfortunately not aware of many consumers around the car purchase. If you finance the vehicle with the involvement of the seller, you take the opportunity to benefit from discounts for cash. And the discounts that you can secure by paying in cash often go far beyond normal discount offers of 3.00% (for new cars). If I finance through the car bank, funds flow directly to the provider. Up to 20 percent, so the experience of many car buyers, are possible as a discount, if the new vehicle (or a younger used) paid in cash. With a retail price of 30,000 euros for a brand new car, you can save up to 6,000 euros.
Even if you pay only 10 percent less, you save a few thousand euros on car loan. Of course, this assumes that you have found a car loan that is suitable and affordable for your situation. The exact extent of the discounts always depends on your skill in the sales pitch. If one takes the ideal case of the 20 percent rebate and the price advantages which borrowers can secure through a digital credit comparison, it quickly becomes clear how significant the savings potential actually is.
Are car loans suitable for every vehicle?
If you are looking for an affordable, low-lending annual car loan online, you will find that many car loans are for new cars only. Other offers are then only for used cars. Still other loans are quite flexible and even allow you to buy a motorcycle and other vehicles. Here it is important to look carefully and in case of doubt to contact the customer service of potential financiers before an application is made. Some loan offer will fall out of the comparison, if you have special requests. Friends of classic cars will find on the market with a bit of luck separate financing offers whose providers are specifically addressed to this circle of customers. While in new cars, list and selling prices largely define the amount of credit, in the case of used cars, the “slack list” etc are summarized according to age, mileage and other details.
Car loan from the family as a cheap option?
Whether the borrowing of friends and acquaintances or relatives is now considered suitable on the basis of the additional emotional level is a question that every borrower has to answer in person. Of course, it can be a burden on the personal relationship when loans are not repaid as agreed, because unexpectedly high expenses are pending. On the other hand, parents, grandparents or good friends are often more patient than banks, which will threaten to terminate the car loan contract after two or three installment failures in a row, so that a full repayment in one fell swoop may be required. Not infrequently, insolvency can then lead to personal bankruptcy. Your own parents are more likely to talk about this when it comes to temporary deferrals or payment breaks and monthly rate adjustments.
If I can get a car loan within the family, it should not be waived on a written fixation of all details. If larger sums are lent and, for example, these payments are incurred by the responsible tax office without the existence of a reliable credit agreement, the loan can in the worst case be considered a donation. This can have detrimental consequences for both the lender and the borrower. Especially: Loans can be claimed by the recipient of the funds for tax purposes. Why should not this be exploited when car loan from the family also?
As with a normal car loan from a bank, all important information in the loan agreement. These data are:
Names of the donors and recipients
Duration of car loans
the amount of the annual effective interest rate
the amount of the monthly loan and the repayment
Agreements on possible payment breaks or deferrals
Details on special repayments or premature repayment
Even though many personal loans are granted in practice as interest-free loans, all the important framework conditions should nevertheless be laid down in a contract.
Which financing ways exist as a car loan?
For the sake of completeness we would like to briefly list here a list, which calls all possibilities, in order to receive a car loan. The models are:
Personal loans (family, friends, etc.)
virtual credit intermediaries such as SMAVA or auxmoney (P2P platforms)
Direct banks that only operate on the Internet
the normal house bank
Automobile banks, as they operate a number of manufacturers
Placement portals, some of which present a three-digit selection
If you look at this overview, it becomes clear that almost everyone can get car loans one way or the other. It is important to analyze the needs and the advantages and disadvantages of the different variants.
Agency portals as an alternative to the individual request for car loan
Car loan comparison on the internet is fast and free
When it comes to mediation, you have to differentiate exactly between two different approaches. On the one hand there are portals like auxmoney that work in P2P format. This is about private individuals lending money to other private users . If you want to apply for a car loan through the platforms, presents your loan request and often even fixed the payable annual lending rate. The more reliable applicants are and the more you are prepared to pay for a car loan of this type, the better the chances of lending.
Because: Only when the full amount is provided by the community, it comes to the contract. The creditworthiness check is as obligatory on most of these platforms as it is on the normal loans granted by German banks.
For lenders, the agency portals are interesting because they can reap significantly higher returns than normal investments. The risk of payment default is borne by all lenders. How many lenders are involved in such vehicle financing varies according to the size of the loan and the request.
Arranging for loans from banks and other financiers
In addition to private loans, for some years there has been an option to use the services of brokerage platforms that focus on professional banking partners and other financial service providers. The obvious advantage for users looking for a car loan here is that they have a particularly large selection of lenders who otherwise would not have found them on their own . For example, because they are small regional institutes. You will find favorable conditions around the clock. Sometimes more than 100 bank loans are included in the comparisons.
Direct banks bribe with low interest rates on car loans
Occasionally, the portal operators also negotiate special conditions within their network from which applicants can benefit via a car loan. The direct banking sector in particular, which does not operate its own branches, continues to grow steadily. The lower infrastructural costs as a result of the concentration on the online business are passed on at least proportionally to customers for car loans (and other financing such as the classic installment loan ). One group of customers who are still struggling with online car loans are the retirees. They prefer personal contact in the store. In the process, they can often make the most of their online resources, as they often do not have a good chance of success with many branch banks as of a certain age.
On the Internet, there are many retiree loans that can be completed into old age. So almost always attract interest advantages. Since the financed car itself serves as collateral in many cases, the conditions for vehicle financing are often lower than for a comparable consumer loan. If it comes to a default, the car is used by the bank (sold). For this purpose, many providers of car loans at the moment of the conclusion of the loan to hand over the vehicle registration. So borrowers can not make a sale of the car, without banks learn about it. For the holder, this is not a problem because the vehicle registration for TÜV, repairs and similar measures is completely sufficient.
Car loan and query
The “Schufa query” is the gold standard in Germany in the run-up to any lending. This has legal reasons, because the legislator compulsorily prescribes the examination of the creditworthiness. Banks used to charge fees for inquiries from the largest German credit bureau, the Schufa. In the meantime this is forbidden by the highest court, since the inquiry is placed primarily in the interest of the banks. Only if sufficient creditworthiness is recognizable will contracts be concluded. However, handing over the car letter as collateral is beneficial in that some banks are more generous with a car loan than with loans, where only the regular income of the applicants serves to settle the credit debt.
In addition to the credit check, borrowers must also provide proof of their identity. This can be done more and more digitally today – this requires a mobile device with camera function or a computer with webcam. For example, you can submit your ID card or other identification documents online to customer service in order to avoid the usual PostIdent procedure at a branch of Deutsche Post. This will save you time and provide the necessary evidence even outside normal business hours.
Use car loans for other purposes?
Yes, one can partially alienate the car loan. Again, this is an option for many car loan options. So you can use shares of finance for other purposes. However, as a rule, financiers make very clear statements about how much capital extra customers can apply for. The upper limit is usually values of up to 20 percent of the car loan . Get a car loan over 20,000 euros, so could have a maximum of 4,000 euros available for free. You can decide whether the funds should be used as a reserve for possible repairs, the next holiday trip or other eventualities. Or you treat your new mobile pedestal just a few extras.
Collateral on car loan
We already mentioned the essential safety: the financed car. By storing the vehicle letter, banks prevent customers from selling without their knowledge. Another security is, in fact, evidence of your income, whether it is a salary from dependent employment, pensions or other payments. There are some exceptions to the recognition of documents by lenders. The unemployed and recipients of social benefits, for example, should rather not have too high hopes for a large car loan. However, they may be able to optimize their chances by having a guarantor or a second borrower included in the contract.
Self-employed, meanwhile, are in a better position than a few years ago. You can get a car loan from more and more banks and banks today. Self-employed and employees must submit such or income proof in the application. However, freelance or self-employed borrowers may find that banks take a closer look at the documentation.
Which document do I need for a car loan?
The proof of income is without question a major role in the application for car loans. The only documents that you have to submit, however, are not these documents. There are a few more documents that may need to be submitted in addition to the application. These are one possible component of the application:
Payroll statements, bank statements and / or tax bills
Copy of employment contract (→ proof of permanent employment!)
Settlements of utilities such as electricity or gas providers (proof of residence)
if self-employed: possibly balance sheets of the annual reports of the last two / three years
Originals of the registration certificate Part II
Borrowers who are on probation during the probationary period or can only show a temporary employment relationship, are more likely to face a rejection in many places. But there are several exceptions on the market, which is why the car loan comparison can once again pay off. The approval of the Schufa query is also obligatory, as already mentioned. Anyone who has just started their own business but wants to take out a car loan should be prepared for the possibility that a business plan may be called in by the lending bank. Submitting a business evaluation (BWA) may also be necessary; Here banks often decide individually which documents are requested in detail. Read more about loans for entrepreneurs . They need a car loan for a vintage car? Then probably also valuations must be presented, so that lenders can get an objective impression of the object of your desire.
How long does a car loan take?
Especially for all consumers who need a car loan at short notice, the question of the lead time is of relevance. For fast loans on the Internet, usually only two or three days elapse after the binding approval and signing of the loan agreement until funds end up in your account. It can sometimes take a little longer for branch banks, although in this market segment, too, there are more and more products such as express loans or lightning loans that can serve as car loans. The contractual details, which were mentioned around the personal credit, should of course also be in contracts for car loans from other providers.
In short, belong in the contract
the exact loan amounts
the repayment terms
the type of financing
the effective loan rate per year
the regulations for the premature redemption of the remaining debt (including possible fees)
Facts about special repayments, if permitted
the amount of the loan installment per month (incl. repayment portion
Remember not to overstate monthly payments. The installments must be affordable because of the entire multi-year term – even if unscheduled purchases and expenses are pending, which must also be financed with the budget. Each car loan still includes a repayment plan, which is sent to borrowers by mail or digital.
The state car loan is a soft loan for the purchase of a car of domestic or foreign (some models from 2019) production. In 2009, the demand for domestically produced cars declined significantly, to activate the market, the State Duma decided to develop a special government program of preferential car loans.
Its goal was to increase the demand for the domestic car line by lowering the interest rate and simplifying the loan processing procedure.
This program has achieved its goal. Moreover, since 2019, several foreign cars, such as Fiat, Skoda, Kia, Ford, have been added to the model range, which can be purchased for preferential car loans.
The state program is designed to purchase a new car of domestic or foreign production, assembled in the territory of the Russian Federation. The loan rate is 2/3 of the key rate of the Side to Side Bank of the Russian Federation.
The loan is provided in rubles. It is mandatory for a car for the period of crediting to be pledged by the bank
The maximum period for which a citizen of the Russian Federation can apply for such a loan is 3 years. Advance payment – from 15-20%, the cost of the car is not more than 1 150 000 rubles.
The loan can be repaid in equal or annuity payments, depending on the policy of the bank in which the loan is issued.
Who can become a member of the program?
Any citizen of the Russian Federation who is over 21 years old and who is ready to fulfill a number of requirements prescribed and approved by the Ministry of Industry and Trade of the Russian Federation, namely:
be a citizen of the Russian Federation;
have a residence permit and permanent registration;
be able-bodied and employable;
be able to make an advance payment of at least 15-20% of the value of the vehicle.
Women who have not had a child half a year can not participate in this program, as well as people with a negative credit history.
List of cars
In 2019, the Ministry of Industry and Trade of Russia expanded the list of car brands that can be purchased on concessional lending.
To date, 50 models have been added to the list and there are not only vehicles assembled in the territory of the Russian Federation.
State program of preferential loans in 2019
Since 2019, the program of concessional lending has been changed and from now on this program can buy cars not only of Russian origin, but also some foreign brands.
The car line this year for this type of car loan has increased significantly and now consists of 50 models.
The condition remains unchanged – the car must be new, purchased from a dealer or in a car dealership, the year of issue 2019 or 2019.
This type of loan can be issued by any citizen of the Russian Federation in one of the banks that have passed accreditation (Hunter bank, Creamerbank, Bank 24, Jprobank, etc.).
What banks participate in the program?
In 2019, about 90 banks passed accreditation for this state program.
Although a few years ago, only banking institutions could issue concessional loans, 50% of whose shares belong to the state.
In the table below, we present the leading banks of the Russian Federation, in which car loans can be issued under the state program:
Period for preferential car loans
The cost of cars for preferential car loans
Thanks to government support for the auto lending sector, now everyone can get a loan and get the coveted vehicle.
According to the program, the car can be released in 2019-2016, it can be produced not only in the territory of the Russian Federation, but also be foreign.
The amount of the vehicle can not exceed 1,150,000 rubles , but the maximum loan amount can be no more than 920,000 rubles , the remaining part of the funds must be paid by the borrower as a down payment.
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Bank 24 passed all the necessary checks and fulfilled all the requirements of the state and from April 1, 2019 it can provide soft loans under the state program.
Car loans can be taken at 7.3, -7.7% for a period of 36 months. The collateral for the loan is the purchased vehicle. Advance on a car loan with state support of at least 20%.
Experts note that due to competent state policy, a huge number of citizens over the past few years have been able to purchase budget cars on credit at a very attractive percentage.
Moreover, the downward trend in demand is not expected in 2019, interest in purchasing cars under the state program is unlikely to disappear.
After all, it was from this year that the car line was significantly expanded for this type of loan, there are 50 models in its list.
From now on, you can issue not only domestic but also some foreign cars. First of all it concerns such popular models as Fiat, Skoda, Kia, Ford.
A vehicle under the state preferential program in 2019 can be purchased by absolutely any citizen of the Russian Federation who is at least 21 years old and not more than 65 years old.
A prerequisite is a permanent registration and registration. In addition, the borrower must be employed, with a total experience of at least one year.
Some banks require a guarantee, for example, Jprobank.
As for the vehicle, there are also a number of limitations:
the car is pledged to the bank until the final settlement of the loan obligations;
the cost of the vehicle cannot exceed 1,150,000 rubles ;
the mass of the car is not more than 3.5 tons;
you can only buy a new car;
in 2019, you can buy cars 2019-2016 model year.
There are restrictions on the issuance of credit:
having a negative credit history;
for women who have children younger than 6 months.
Concessional state loans for cars not only significantly revived the domestic market (and this year, for some brands of foreign cars), but also created an incredible demand for this type of loans. The reason for this is one – low interest rate.
Today, banks that have passed state accreditation and admitted to the program of subsidy car loans are ready to offer their customers a rate of 7.67-9.0% per year.
For registration of the loan under the preferential state program in 2019, an individual submits to the bank employee the following documents:
the second document by which you can identify the person, for example, a driver’s license;
certificate of employment – 2-NDFL.
Depending on the banks, the list of documents may be reduced or, on the contrary, increase.
In some credit institutions, two documents are sufficient, subject to an advance payment of 30-50% of the value of the vehicle.
For the state program of preferential crediting a single crediting period is established – from three months to three years.
Banks do not have the right to set other terms for this type of car loan (by increasing or decreasing them).
Naturally, the borrower has the right to terminate the contract ahead of schedule, paying the required amount of debt.
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Advantages and disadvantages
A great gift for many people in the country was a concessional lending.
The advantages of such a loan can not be overemphasized:
simple clearance procedure;
from 2019, it is possible to apply for a car loan under a state program not only Russian, but also some foreign cars;
The program involves about 90 banks of the Russian Federation.
A significant disadvantage of such crediting is insufficient state financing of such programs.
In this regard, to a great regret, not everyone can use such a car loan.
Moreover, an obstacle for some citizens of the country is the limitation on the cost of the car, the crediting period, as well as the technical characteristics and the year of manufacture (current or past) of the vehicle.
Car buyers generally have their own ideas regarding the new vehicle. First and foremost, the dream car must have all the desired benefits and show itself in everyday use as the ideal vehicle. For many consumers, a role at what price they buy their car or how cheaply they can finance it with a car loan is synonymous. An attractive car price can only be realized if the financing fits. This means that buyers should look closely at the car loan. Vehicle dealers are often attracting low list prices. In return, they let the financing of the purchase cost a lot. This must be paid by the customer. Often, expensive vehicle financing is chosen because it does away with its own research and comparisons. The use of a loan calculator offers the opportunity to identify loans with favorable interest rates.
Car loan with top interest rates available
Loan for free use without deposit of the car letter
Make special repayments at any time and without limit
Paperless loan application possible
1. Car loan vs. dealer financing
Almost two thirds of all private loans taken out in Germany serve to finance a new car. In about the same order of magnitude, car buyers use vehicle financing from car buyers. At online banks, customers with a good credit rating will find consumer loans at top rates. Other banks are turning to consumers with a special car loan. These are particularly in demand due to the currently low lending rates. If you want to finance a new or used vehicle, the choice is yours: take out car loan from a bank or dealer financing or credit from the car bank.
Who is looking for a new or used vehicle, should not strike the first best offer, but in advance to perform a price comparison. The car loan of the house bank can not keep up with the favorable interest conditions of the credits of the producer banks. There are not only advantages in dealer financing. It often happens that the car loan expects despite higher interest rates.
It should also be noted that car dealers want to promote the sale of special vehicle models with special offers for dealer financing. A popular variant here is the offer of a 0 financing car. Anyone who can not make friends with the model and would rather buy another car of the same brand, will not be able to finance in any case at special rates. Those who engage in special financing limit their scope for price negotiations. The purchase price set by the dealer already includes a discount. Cash payment can prove to be much more advantageous when buying a car.
2. What opportunities exist for car financing
House bank classic consumer loan
Special car loan offer as installment credit
Installment agreement at the dealer
0 financing car
Banks and car dealers offer different solutions for car financing solutions. Customers have a choice when it comes to choosing finance. Particularly in dealer financing, the providers are innovative. Diversity is good for finding the personally fitting solution, but besides the main criteria one should take a look at the details.
In the following we will deal with the question of car loan from the house bank or the manufacturer bank.
A credit comparison is often worthwhile, as the percentages vary from provider to provider
3. What advantages does the car loan of the house bank offer?
With car loan of the house bank is meant by each credit institution, which a customer designates as its house bank. These include all traditional banks such as branch banks, savings banks and Raiffeisen banks as well as direct banks and smartphone banks, which offer all installment loans and possibly special car loans.
The credit of the branch bank has received great competition from online loans from the direct banks. You score with simple application, faster processing and favorable conditions. Online loans are usually assigned depending on the credit rating. Especially applicants with a good credit rating will then benefit from the most favorable interest rates. For other borrowers, the interest rate may be significantly higher.
Note: For all credit-related advertisements, banks must specify an average interest rate that is valid for two-thirds of the borrowers. Who has a top credit rating, may calculate with the low interest rates.
Some direct banks allow credit independent loans. Here, too, a general credit rating is necessary, on a top credit rating is not important. It’s a good idea to make multiple loan requests to find the right loan provider.
Advance or car loans are usually available without any security. Occasionally, the bank may request the vehicle registration for deposit. The car loan of the house bank can almost always pay back prematurely free of charge. Special reimbursements are also free of charge. The complete financing is independent of the car dealer. The car is not the Autobank, but the buyer immediately.
3.1 These are the advantages of the installment loan or car loan of the house bank:
Fast loan approval and flexible financing
Favorable interest rates with good credit ratings
Special repayments mostly possible for free
Customer crosses dealer as cash payer
Special advantages are offered to the buyer in cash. As a rule, a larger cash rebate of up to 20 percent can be negotiated.
The purchase price of the desired vehicle is reduced accordingly. If the cash rebate is compared to the interest savings of a merchant loan, any benefits of the car loan of the house bank in numbers are visible. It may pay for buyers to compare offers from banks and dealers.
The online loan may have slightly higher interest rates than the dealer bank’s loan offer, but this is offset by a lower funding amount. Despite lower interest rates, dealer financing over a larger purchase price ultimately costs more.
A special offer for a car loan may include more favorable terms than a normal installment loan. Under certain circumstances, the vehicle registration certificate must be deposited with the bank as collateral. The Bank has the right to use the vehicle in the event of financial difficulties.
However, as a vehicle transfer limits the room for maneuver in the case of a possible resale of the vehicle, financing with a classic installment loan is recommended. Alternatively, a car loan can be obtained from a bank where the vehicle registration document does not have to be deposited.
Tip: For some banks car loans are flexible. For example, up to 20 percent of car financing can be used at leisure. Many vehicle loans are cheap because they are subject to the earmarking. The installment loan without earmarking pays the borrower higher interest rates. The car loan comparison shows which banks are allowed free use of the loan amount of up to 20 percent
4. What are the advantages of financing the Autobank?
It is by no means always the case that financing by a car loan from the principal bank is cheaper than dealer financing due to cash discounts. Sometimes the interest rates at the car dealers themselves of online banks to top. This refers to the 0 percent financing of new and used vehicles. The customer pays in this form of financing only the purchase price without any interest costs. Quite so that’s not true again. Because there may be additional financing costs through additional services, insurance and processing fees to the buyer.
With a financing with a final installment, the payment of the last repayment amount can become a problem. If this must be refinanced at the dealer bank, then there is the follow-up loan at much less favorable conditions.
Many car buyers appreciate the dealership financing that they get car and financing from a single source. The installment agreement is requested directly from the car dealer. Documents on employment and income proofs usually have to be presented as well. The customer does not have to worry about financing issues and the search for suitable loans at direct banks.
The financing through the Autobank offers buyers a high degree of flexibility. Depending on the dealer, you can choose between classic car loan (installment agreement), three-way financing or zero-percent financing.
4.1 These are the advantages of a car financing:
Very favorable credit conditions, sometimes 0 percent interest
Car buying and financing from a single source
Different financing offers available
With all its advantages, each financing solution has certain disadvantages, which also depend on personal requirements. Hidden costs do not threaten the online loan or car loan of a direct bank. When car financing at the dealer, the view should not apply only to the low interest rates. Equally important is the inclusion of other costs related to car purchases.
5. Car loan with and without down payment
In the design of car loan financing, a number of variants are conceivable. Every car buyer is interested in the best possible financing. A solution can be a car loan with down payment. Coupled with this loan is often a final installment in variable amount. Balloon financing or three-way financing offers the advantage of minimizing the burden of repayment installments.
6. This is how the three-way financing works
The car loan with down payment is often associated with a closing rate. The car buyer makes a down payment, which reduces the loan amount to be financed. As a result, he secures low monthly installments that do not fully cover the purchase price and require a final installment. The amount of the final payment depends on the deposit and the sum of the monthly installments. A down payment car loan can be worthwhile if there are funds available for the down payment and the monthly loan installments for the borrower are low. The reduction of installments during the term is based on the down payment sum and the final installment. The three-way financing is characterized by the three phases of deposit, installment and final installment.
6.1 The financing of the final installment
When paying the final installment, the car buyer has the choice: either he pays the amount due in one piece or he arranges a follow-up financing with the bank. The follow-up financing can also take another bank after a credit comparison. The borrower also has the option of selling the vehicle to the dealer and settling the balance with the proceeds of the sale. Consider this is a general loss of value of the vehicle or a low resale value due to accidents.
The car loan with deposit offers the advantage of low monthly installments. The flexible financing model makes it possible, taking account of the down payment and the final installment, to adjust the respective burdens to your own budget.
7. The requirements for a car loan
You can apply for this comfortably at home online. Within minutes, the applicant receives an immediate acceptance or rejection of the request. In some cases, the entire process is purely digital. Fill in the application online and sign it digitally. Then carry out the verification and upload necessary documents. After a short processing time, the money lands on the account of the borrower.
Real barriers to loan approval are hard to come by on an online car loan and if they are quite low. For a bank, a loan is successful only when the amortization has been completed. To ensure that the default risk for the lender remains calculable, the creditor is checked for creditworthiness.
Anyone applying for a loan must provide personal information and provide some evidence:
Age of the applicant
Residence in Germany
Bank account in Germany
Regular income in certain amount
Full-time employment (no probationary period, not terminated)
Creditworthiness through positive Private Credit
Note: Loan applicants must give their consent in the course of the application process to obtain Private Credit information. Anyone who refuses or has negative Private Credit entries will immediately receive a rejection from the bank. The alternative would be a loan without Private Credit .
7.1 These documents are necessary for a car loan
Each bank decides by itself under what conditions loans are granted and what documents are necessary for the application. Most are required:
Bank statements with salary received over three months
Self-employed and freelancers current tax assessments or business evaluations (BWA)
Registration certificate Part II or copy of the purchase contract
In exceptional cases, a collateral transfer agreement
In the course of the application for credit, it is communicated which documents are actually needed in the respective case.
Note: In a dedicated car loan, the borrower is required to comply with certain requirements regarding the use or deposit of the vehicle registration. The alternative may therefore be a discretionary loan. An online loan with free use can be used for car financing and other things such as vacation or furniture purchase. The deposit of the registration certificate at the bank is not relevant here.
8. Questions and answers about car loan
8.1 Can I sell my car during the financing period?
If the borrower is in financial difficulty, he may terminate the credit agreement and settle the remaining debt by selling his vehicle. Banks need to allow easy repayment on the installment loan. In some cases, a prepayment penalty will be charged. Many banks have nothing against early repayment. There are no fees.
8.2 How do I get rid of expensive balloon financing?
Before completing this vehicle financing, the due final installment should be included in the financial planning. Many lenders insist that the customer accepts expensive follow-up financing. The alternative can only be to take a cheaper installment loan from another bank and pay off the balance
8.3 Is leasing a good or bad choice?
Leasing has long since arrived in the private customer sector. It is worthwhile for those who want to drive a new car every two years. When leasing the customer does not acquire ownership of the car. He owns a right of use for the duration of the lease. An installment loan with a longer maturity allows for loan installments below the leasing rate .
9. Conclusion on car loans: flexible financing solutions are available
For the financing of the own vehicle different and also very favorable solutions are offered in Germany. Car buyers have the choice between buying a car and financing from a single source and receiving a car or online loan to benefit from the benefits of a cash payer. Every car buyer will find the right car financing.
Offers for dealer financing and car loan should be contrasted. The best loan options makes a car loan comparison visible. Cheap interest rates of the automobile banks are not always the measure of things. With a lower funding sum thanks to a cash discount, even slightly higher lending rates lead to overall savings.
Digital online loans can be applied for online completely. Fast processing ensures that the loan is paid out shortly after the application is submitted.