Car loan with down payment and final payment common method of vehicle financing

Car loan with down payment and final payment common method of vehicle financing

Anyone who buys a car for private use rarely pays the full purchase price immediately – regardless of whether it's a new or used car. Partial professional use is another element of financing: for this, you can get reimbursement from your employer or tax breaks from the tax office. Overall, the triad of down payment, car loan over a few months and final payment remains a popular approach.

Balancing monthly installments and one-time payments

With the car loan with down payment, the term plays a major role. From this depends on how many euros are due to the bank for each of the agreed months.

The car loan with down payment does not generally fall under the designation balloon loan. This word refers to loan financing with final installment. It has – similar to the one with the down payment – already a considerable order of magnitude: so like a balloon.

Another term for this type of car loan is: three-way financing. It refers to the three pillars of down payment, credit phase and final installment. The car loan with down payment is also suitable for a leasing solution: At the division of the car price between the two one-time payments. One borrowing over perhaps 36 or 60 months changes thereby nothing.

Three-way financing at a glance:

But it is clear: Without Schufa nothing runs: This is the information file that tells the lender whether you have paid your bills and installments so far correctly. There are ways to circumvent a negative Schufa information – more on this below

Advantages and points to consider for this car loan

The car loan with down payment over the best possible individual term has advantages. However, there are aspects that you must not lose sight of. The biggest advantage of this option for car purchase or leasing is the low rates that are due over the agreed months of term. But of course you don't get these euros for free, they occur elsewhere in such a financing option: with the high down payment and the large final installment respectively.

This type of car loan is recommended if you have enough money for a good down payment, but can only make small installments for the bank over the months from your regular income. The closing date for this car loan with down payment you may put on a date when a savings contract comes to pay out. Possibly you finance this car in such a way that you, as a freelancer or entrepreneur, can count on larger income after a successful project completion. With this money you then pay the euros for the possibly larger final bill.

There is also the possibility of arranging a follow-up car loan with the lender for this car loan with down payment. Or to sell the vehicle at the end of the leasing contract. To settle the remaining debt with it. But with the latter caution is required. This end point of the car loan with down payment requires you to include the loss of value of the car and possibly accidental damage. Your reputation with Schufa also plays a role in the options available to you.

Car loan from the dealer – or from the bank?

To the car loan with down payment is always the question: With which lender I take this car loan? Finally, the amount of the down payment plays a big role in the whole financing concept up to the final installment.


The higher the down payment, the lower the interest over the months during the term of the loan. Or you pay off the financing faster with larger regular amounts or a smaller final installment.

All these considerations around the car also arise when buying via the leasing model. It is particularly convenient for you if you take out a car loan with a down payment directly from the car manufacturer or its sales outlets. The possibility of comparing credit conditions of different providers on your euro-load, you give away, however, thereby. This also applies if you choose the leasing variant. A contact is of course the local bank where you have your current account and perhaps various savings contracts.

Search for special car loan lenders

It is always worth comparing with the other municipal financial institutions in your catchment area. Finally, for your car loan with down payment, you can find providers who specialize in particular fields. These banks exist for car loans just as they do for real estate financing, for example. It is worthwhile to visit comparison portals on the Internet for this once. Finally, with the car loan you make a financial commitment for many months.

This is important

If the car dealer or the manufacturer offers you the car loan through their banks, they also earn money on the loan costs. On the other hand, if you take out the car loan through the manufacturer or the dealer, your chances of getting discounts increase. They become even greater if you also take out car insurance at the car dealership. Despite all the excitement about the new car, don't lose sight of the details of the financing: the amount of the car loan, the months of the term, the interest rates, the "fine print"! Only that together shows you how many euros the car loan with down payment really costs you.

The foreign loan is always a solution

The car loan with down payment is possible even if the Schufa information is not so favorable. In this case, you probably have problems with one or the other bank – locally and on the Internet – to get a car loan with down payment. However, this Schufa information may be outdated. Does not reflect your current financial capacity. Then you request a correction from Schufa – and this is done when you prove that you meet the requirements for a car loan. Then the car loan is also possible again in Germany.


A variant to get the car loan with down payment always exists abroad. The financing is usually only in an order of magnitude between about 3.500 and 7.500 euros possible. The offered term then gladly extends over 40 months – that's more than three years! This can be done quickly and easily online – but keep in mind that these conditions incur considerable interest – and the final installment is still waiting to be paid at the end of the day.

A last possibility to get a car loan with down payment even with currently bad information about the own finances still exists. You deposit the car title at the bank, which gives you the necessary euros.

This is important

By way of explanation, whoever holds the car title is the owner of the vehicle. If you do not pay the installments due for the car over the months, the bank takes the car to secure its own claims. This option for the car loan with down payment also applies to the leasing variant.

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