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.