Cheap car loans a loan makes you a cash payer

Cheap car loans a loan makes you a cash payer

Car loan: better cards when buying a carThe car loan is probably the most common form of financing, since very few people have the financial means to pay for a new car out of their own pocket. That is why most buyers either choose a credit offer directly from the car dealer or take out an installment loan with an independent bank.

What to consider when financing a car?

As with any other installment loan, it is important to compare the effective interest rate for car loans. The annual percentage rate of charge takes into account the costs associated with the car loan. Because a favorable interest rate is of no use if all kinds of fees are added afterwards. Although some costs are also charged extra here. Thus, commitment interest or the account maintenance fee, can lead to an additional financial expense. The debit interest rate, on the other hand, does not include any fees. Is therefore only insufficiently meaningful in the comparison of different offers.

Pay attention with the auto-financing besides to a realistic credit sum. So there may be additional costs to the actual purchase amount of the car. If you decide, for example, for a special equipment, still buy winter tires or other accessories is necessary, also increases the necessary loan amount to finance the new car.

Pay for the car in full with car financing and save a lot of money

Who acts as a cash payer at the car dealer with the help of a car loan, can negotiate discounts. So it is worth separating the loan from the car purchase. Because most car dealers reward cash purchases with high discounts and particularly favorable extras. 10 to 15 percent discounts are possible, plus optional extras at a bargain price. So strengthen your negotiating position by taking out a car loan.

Editorial tip

Especially if the car loan includes a higher sum, a residual debt insurance can be worthwhile. This is when you can no longer meet the installment payments, for example, because of unemployment, or. Assumes the residual debt if something should happen to you and thus protects your family from financial obligations arising from the loan.

Low rates – expensive car financing

Especially with a car financing there is the model of the so-called balloon financing. Comparatively small installments are paid, but a high final installment is due at the end of the contract period. The vehicle is used as collateral.

Advantages has this form of car loan for people who, for example, want to buy new vehicles in short intervals. You can then sell the vehicle on the open market when the contract expires and use it to finance the final installment. However, this always carries the risk that the resale value is lower than expected. The big disadvantage is also the relatively high interest burden. Since the car loan is paid off only in very small installments, interest is omitted so longer on the majority of the loan amount. Compared to a normal installment loan, this car loan can therefore be more than twice as expensive.

Find a suitable car loan now

Especially in the current low-interest times, car loans are also very cheap to get. Use this circumstance and replace your old car by a new model. Use our loan calculator and find out which offer for the desired term and the desired loan amount offers top conditions!

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