Cheap car loan

A cheap car loan can be obtained from a vehicle dealer and his car bank as well as from a commercial bank. Both forms of financing have their advantages, whereby the more favorable form of financing depends on the particularities of the individual case. for an assessment

Car financing through the dealer

Car financing through the dealer

A nominally cheap credit for the car is possible with every new car purchase through the dealer’s car bank. However, since dealers share in the financing costs of the manufacturer banks, they grant buyers in connection with vehicle financing little or no discounts on the vehicle price, so that taking into account the possible discount, car financing through an independent commercial bank is often cheaper.

This in turn does not apply to models where a dealer offers unique special conditions up to interest-free financing. These are almost always vehicle models with poor sales figures or vehicles that will soon be replaced by a new model generation.

As a result, the particularly cheaply financed cars can only be sold later than used cars with above-average losses. They are therefore particularly suitable for vehicle buyers if the car is later to be passed on within the family or to be driven by the original buyer until the end of its life.

Car finance through a commercial bank

Car finance through a commercial bank

Many commercial banks offer car loans at a reduced rate compared to their standard loans, so that they are competitive with the banks of vehicle manufacturers. Another reason for inexpensive vehicle loans is the increased credit security. A car buyer grants the bank financing the car the right to sell the vehicle if the loan is not repaid as agreed and also deposits the registration certificate part II.

In addition to this, the bank insures itself against unwanted vehicle losses due to theft or accident by requiring car buyers to provide proof of comprehensive insurance. Taking into account the possible discounts from the car dealer, financing through a commercial bank proves to be a cheap car loan for all vehicle models not associated with special conditions at the manufacturer’s bank.

Loans with flexible uses

Loans with flexible uses

In addition to the full financing of the car value, both dealers and banks offer flexible forms of credit. Three-way financing is particularly popular with vehicle buyers, in which the car buyer initially finances the difference between the purchase price and the vehicle value to be expected at the end of the contract. At the end of the contract term, he decides whether to return the car or pay the residual value.

If he wants to purchase the car permanently, he can raise the additional purchase price from savings that have been made in the meantime or apply for renewed financing. The three-way financing or balloon financing was initially developed by car banks and is now also offered by commercial banks as a special form of vehicle financing.

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