Under this name, the car loan is a special loan that is specifically intended for borrowers to finance a car with this loan. Every car manufacturer has its own banks that offer cheap car loans. In addition, there are manufacturer- independent car financiers such as the Fine Bank, which has created its own portal with carcredit.de, where there are car loans for new and used cars.
Car loan from the car bank
The manufacturer banks offer car loans at particularly low interest rates in order to boost vehicle sales. The interest on these loans is in most cases significantly lower than that of conventional installment loans, so that many consumers request their car loan from the car bank directly from the dealer without having to do a large amount of recalculation.
The low interest rate for these car loans is only possible because the manufacturer and the car dealer subsidize the interest rate. As a result, the car dealer is not very willing to give a large discount on the vehicle price. If you really want to make a bargain as a car buyer, you have to be meticulous when planning your car purchase.
The cheap car loan from the car bank is not always the cheapest option if you add up the bottom line. As I said, the customer usually has to forego a discount due to the low interest rates.
On the other hand, if you take the trouble and compare different loan offers from other banks and then take out a particularly cheap loan for the car from a third-party bank, you can save a lot of money on the bottom line because you come to the car dealer as a cash payer and have good chances as such Negotiate discount. If the bottom line is that the total costs are lower, you have done everything right.
What to look for in car loans
In addition to the question of how to get a car loan at the cheapest cost, there is of course also the question of how the term should be designed so that the rate is then affordable. Therefore, consumers should calculate what they can and cannot afford before buying a car. A car loan in particular is usually an installment that can be felt when it is debited. In addition to the installments, it should also be borne in mind that it is not just about paying the installments for the car, but that the car only makes sense if it can also be maintained. There are additional costs for taxes and insurance as well as regular petrol or diesel. There must also be money for this.
With a tight budget, traders offer the option of a special type of financing called final installment or three-way financing. With the final installment, it can be achieved that the monthly charge during the contract period is significantly lower. However, the final installment financing always bears the total credit costs, which are then correspondingly higher.
If the credit rating is not sufficient
Since the car loan is usually a slightly higher loan amount, the banks expect the customer to be creditworthy. If the income situation is weak or there are problems with Credit Bureau information, it will not be easily possible to finance a car. Often, customers then have to include a guarantor in the contract who is creditworthy and who undertakes a joint and several guarantee to pay the installments instead of the borrower in the event of an emergency.
Anyone entering into such a guarantee obligation should know that this guarantee is regarded as a contingent obligation and can of course weaken its own creditworthiness as a result.