Car loan: financing opportunity for your car
The car gets no more TÜV? Or has offspring announced and the sports car must finally be replaced by a family carriage? High time to look for a new mobile pedestal. But new cars are expensive. Hardly anyone pays the cash. An alternative method of financing can be a car loan.
Where do you get a car loan?
- What to look for in car loan?
- Which runtime is right?
A car loan is an alternative financing method for the purchase of new and used vehicles or for costly repairs of the own car. The difference to a conventional installment loan consists of three main features:
Car loans in comparison
Direct to car loan comparison
|earmarking||A car loan is earmarked, ie it is intended exclusively for financing in the motor vehicle sector|
|Security purposes||The financed vehicle serves as security for the lender|
|paying out||The loan installments are usually not paid to the borrower, but directly to the seller of the vehicle|
Unlike leasing contracts , the big advantage of car loans is that car dealers often give hefty discounts when buying by credit. In some circumstances, such a rebate may even offset the cost of the loan, making car loan one of the best financing methods for buying a car.
The choice of the lender
There are several contact points for completing a car loan. In addition to the possibility to conclude a private contract with friends or relatives , also branch or direct banks give car loans, as well as offers usually also the car dealer the opportunity to conclude a loan agreement directly with him.
As collateral for the loan, the motor vehicle letter is usually deposited with the lender. The so-called chattel transfer serves as protection against default and allows the lender to sell the car if the borrower can no longer service the installments . With payment of the last installment, the owner of the car also gets the car letter back. At the same time, the assignment as a lender allows lenders to lend at very favorable conditions, since the risk of default is very low.
When lending a car loan, lenders demand certain collateral. In addition to the payroll as proof of a regular income, questionnaires for private expenses must also be filled in, as a rule, a query is also made at the Schufa . Only in rare cases is such a request waived.
No chance without full insurance …
In addition, banks usually require proof of comprehensive insurance for the approval of the application. But even if a comprehensive insurance is not a prerequisite for the granting of the loan, the conclusion of such insurance is advisable. Because if there is a claim , the credit can be replaced by the payment of insurance, which significantly reduces the risk of falling into debt.
Like any other loan, the conditions for a car loan can differ dramatically. Therefore, you should not fall back on the next best financing option when buying a car , but check exactly where and on what terms you apply for the loan. Important is a transparent presentation of the conditions and costs. The following points should be clarified:
- Amount of the deposit
- Amount of monthly installments
- Term of the loan
- Fees and interest (nominal interest, effective interest)
- Loan amount and total costs
Only after considering all these points can a statement be made about how attractive a car loan actually is. Because many offers that seem cheap at first glance, on closer inspection with hidden costs.
Limit the duration
As far as the term of the loan is concerned, it should be chosen to match the lifetime of the vehicle and in no case exceed it. Usually, a car loan should not be paid for more than seven, but a maximum of ten years.
Of course, there is also the possibility of termination or early repayment of a car loan. It may even make sense to borrow a new and cheaper loan to replace an old loan. In such a case, of course, one has to take into account that the processing fee for the loan is not repaid.
By a legal regulation a termination during the fixed interest period / loan term is possible at the earliest after three months and then with a notice period of three months.
A premature termination of the contract is also permitted to the lender if the installments are not paid on a regular basis. However, after two written reminders , the borrower must be given the opportunity to settle his debts for three months.