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

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

2. What opportunities exist for car financing
  • House bank classic consumer loan
  • Special car loan offer as installment credit
  • Installment agreement at the dealer
  • Three-way financing
  • 0 financing car
  • Vehicle leasing

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?

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?

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

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

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

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:

  • salary
  • 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. 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.

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