Anarecinos Uncategorized Car loan – a popular variant of car financing

Car loan – a popular variant of car financing



If you want to finance your car, today there are various financing options available. It is not always clear at first glance which method of financing is best suited to finance the new or a used vehicle in each case. Therefore, we would like to highlight the following in particular the car loan, but also introduce you to some other financing alternatives and their advantages and disadvantages.

Car Loan: Banks and automobile clubs as lenders

Car Loan: Banks and automobile clubs as lenders

A car loan is always spoken when it comes to a special offer of the banks, namely an installment loan, which can be used explicitly for auto financing. Meanwhile, in addition to the banks and various automobile clubs offer such a car loan, which is in almost all cases, the type of credit is a classic installment loan. The process of car loans is almost always the case that the loan seeker initially makes a loan application. In particular, he must provide the following information so that the appropriate loan can be made available:

  • Desired loan amount
  • Duration or desired amount of the monthly rate
  • details of income
  • Permission to obtain the credit record information

In addition, the loan seeker must of course also provide some personal information so that the loan application can be processed. In most cases it is the case with the car loan that the vehicle to be financed also serves as collateral for the loan. For this purpose, the transfer of ownership of the car is agreed in most cases. This means that the car buyer remains the immediate owner of the vehicle and can use the car as normal in road traffic. However, the lender is legally the owner of the vehicle until full repayment of the car loan. Otherwise, the further course of the car loan as a normal installment loan, which can be used for many other purposes. Specifically, this means that the borrower regularly pays the monthly installments negotiated with the lender during the agreed term.

Worth knowing: Car loan as a popular financing alternative

Car loan is now one of the most widely used financing alternatives when it comes to car financing. Car loans today are provided not only by banks, but also increasingly by automobile clubs.

The classic installment loan as a possible alternative

The classic installment loan as a possible alternative

An alternative to the car loan of banks and automobile clubs is the classic installment loan. This differs from the car loan, however, in principle only in one point, namely that the installment loan is not limited in terms of the possible use. With the installment loan, for example, you have the option of financing the purchase of a new stereo system, a living room furniture or your next vacation trip. However, if you want to finance the purchase of a vehicle anyway with the loan amount provided, this extended use of the classic installment loan will not be important to you. Therefore, the comparison between installment loan and car loan is mainly about the fact that you contrast the numerous offers of the banks. The first step is to use a loan calculator to find an overview of the cheapest offers. However, in the second step, you should use the opportunity to have an individual credit comparison done, which we are pleased to offer you.

Installment agreement with the car dealer as a financing solution

In addition to the car loan, it is mainly the installment agreement at the car dealer itself, which is most often used to finance a new or used car. At first glance, such a installment agreement, which is met with the car dealer, but usually runs on the connected Autobank, often cheaper than the car loan to be. This is above all the fact that the car dealers and Autobanken very often advertise with extremely favorable conditions. In the meantime, so-called zero-percent financing is even more common, but also installment agreements at interest rates of two or three percent are quite common.

In addition to the car loan, it is mainly the installment agreement at the car dealer itself, which is most often used to finance a new or used car. At first glance, such a installment agreement, which is met with the car dealer, but usually runs on the connected Autobank, often cheaper than the car loan to be. This is above all the fact that the car dealers and Autobanken very often advertise with extremely favorable conditions. In the meantime, so-called zero-percent financing is even more common, but also installment agreements at interest rates of two or three percent are quite common.

Despite these often very favorable conditions, it may nevertheless be that the car loan of the bank in the sum is cheaper than such a installment payment agreement with the dealer. This is possible due to the so-called cash discount, which is still available today to almost all buyers of a new car at the dealer. Up to 20% may be such a discount if you are a cash adviser at the merchant. Of course, this is only possible on the condition that you avail yourself of external financing, for example through the car loan of a bank. On the other hand, if you were to opt for dealer financing, you could of course no longer act as a cash payer with the former car dealer.

When comparing car loan and installment payment agreement with the dealer, the main purpose is to factor in the possible cash discount and then to compare once again whether the dealer loan, which appears to be cheaper on the basis of the nominal interest conditions, actually represents a saving in comparison with the car loan.

Worth knowing: Three-way financing with moderate rates as an advantage

Contrary to popular belief, three-way financing as a possible alternative to car loan is not such that there are particularly favorable terms. Instead, it is almost exclusively the moderate credit rate that makes consumers choose balloon financing.

Car loan without credit record: is that possible?

Car loan without credit record: is that possible?

Again and again the question arises in the most diverse financing areas on the part of some consumers whether the respective credit is also offered without credit record. This question naturally arises, in particular, for persons who have a negative credit record entry, and therefore may not get a standard car loan from the bank or automobile club. In fact, almost all types of loans are now offered in a variant as loans without credit record. For example, we have specialized in such loans and can offer you a detailed individual credit comparison also in the field of car loan without credit record free of charge.

In principle, if you have a negative entry in the credit record, this is not a problem because we work together with numerous banks and can therefore assure you of a car loan even if your credit record can not be described as “clean”. It is only important that you have a sufficient income and are habitually resident or resident in Germany.

Conclusion on car loan: often the best solution

Although there are some financing alternatives to car loans on the one hand, on the other hand, when comparing them in practice, car loans from banks or automobile clubs are still, in many cases, the cheapest solution for the person looking for a loan. For example, in direct comparison with installment financing through the merchant, the cash advances must be taken into account, which can only be claimed if the financing is provided by means of a car loan or at least a normal installment loan from the bank. Even compared to the three-way financing of the car loan is purely considered in terms of cost in many.