Buying a new or used car is not such an easy task. After all, it's not just a matter of choosing the right vehicle from the large number on offer. It is also important to always keep the financial side in mind. Because a vehicle, above all in the mint condition, is not available for few euro. Several tens of thousands of euros are due if the mobile undercarriage should be new or at least as good as new. A lot of money, which most car buyers do not have and take a loan for a passenger car to help them.
What offers the car dealer?
You usually buy your new car from a car dealer. In addition to the vehicle, it also provides you with a repair service, comprehensive warranty services, and various financing options. However, you also have the option to pay for the vehicle in cash. If you do this, often high discounts beckon, which can be seen as a reward for the cash purchase.
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If, on the other hand, you decide to take out a loan for a car, the dealer will offer you three different options, all of which you should have explained to you in detail.
Option one is the classic installment loan, also called full financing, where you have neither a down payment nor a large final payment. Rather, consistently large installments are waiting for you, which will accompany you for the next few years. How high the installments will be and how long the term will be depends on the purchase amount of the vehicle you have selected. Never calculate too tightly here, so that the installment loan does not bring you into financial difficulties.
Option two is the so-called balloon financing. Do you want to use this for a loan for a passenger car. Then you either have a large down payment and monthly installments, monthly installments and a large remaining balance, or a down payment, monthly installments, and a large remaining balance. Depending on how you want to design this credit option.
Option three is leasing, which is offered not only to corporate customers, but also to individual customers. With leasing, the vehicle is merely rented by you. You pay a monthly installment, but this does not ensure that you have paid for the vehicle at the end of the term. At the end of the term, the vehicle belongs to the car dealer, who takes it back from you. You can choose a new car for it and think about what financing you want to apply then.
What does the bank offer?
If you want to benefit from the cash discount, then you must either have enough money saved or use a loan for a car from the bank. We recommend you an installment loan or a special car loan. Both variants provide you with exactly the money you need for the car purchase.
It is important that you calculate in advance exactly how much money you can save through the cash discount. If this discount is not eaten by the interest that is due for the installment loan or car loan at the bank, then this option is worthwhile. Otherwise, you should use the offers of the dealer, who can optimally adapt them to your car purchase.
By the way: If you want to take out a loan for a car, the dealer or the bank will retain the vehicle registration certificate as collateral. The purchased vehicle is always considered collateral in such a case, so you do not have to provide any other collateral. Just make sure that your Schufa is positive and the income is sufficiently high, so that your credit desire and thus the purchase of a vehicle can be realized.