If you believe the statistics, then every second new car on the road was financed by a car loan. No wonder, considering what you have to pay for a new car or a young used vehicle these days. In this context, tens of thousands of USD are quickly called up, which most consumers have not saved.
However, since there are enough options around a loan for a car that is provided with low-interest rates and have quite attractive repayment modalities, it is no longer tragic when financing has to be drawn on. The only question is which financing is the best? The offer from the car dealership or the car loan or installment loan from the bank?
What can the dealership do?
In most cases, car dealers offer a car loan that matches the car. After all, they know that most car buyers have not saved up the financial resources that are actually needed for the purchase.
There are three different financing options, each with a loan option. It is therefore not possible to make a selection with regard to the lending bank and the interest that is formed around the loan.
In addition to balloon financing, three-way financing and leasing are also offered. Which way is most suitable for you depends on what you expect from the loan for a car. If you decide to lease, you only rent the vehicle, pay a leasing fee and have to return the vehicle to the dealer after the end of the contract.
With balloon financing, you have many small monthly installments and a final large final installment. The situation is similar with three-way financing. Only, in the end, you have the choice of what to do with the large final installment. You either trade in the vehicle and buy a new one, or you pay the large final installment or take out another loan for this, which splits the large final installment down into small individual installments. Here you should carefully consider which path you want to take since each path has its advantages and disadvantages.
What do the independent banks offer?
Before you sign a financing contract with the dealership, you should get an overview of what the banks in our beautiful country have in store for a car. Because while you only get one loan offer at the car dealership, you are spoiled for choice at the independent banks and can choose a very cheap loan from a variety of offers.
In order to get a first rough overview, we recommend that you carry out a loan comparison. Simply use a loan calculator, which you can find here on the Internet. Enter the key data for the loan for a car and click on calculate. The best loan offers are then displayed in real-time. You can then refine these by requesting one or two offers directly from the banks. However, be careful not to make too many direct inquiries to the banks. This could have a negative impact on your creditworthiness in the short term. Therefore, always use the loan calculator for an initial overview, since it searches without your personal data and you, therefore, leave no “traces”.
By the way: If you use a loan from a bank, you have the advantage that you can appear as a cash payer when buying a car. In all likelihood, this will bring you a good cash discount, which means that you will have to spend less money on the purchase of the vehicle.
Is it worth asking the house bank?
The house bank can also offer worthwhile offers around a loan for a car. Especially if you are known as a good customer who always pays on time, the house bank will be very interested in providing you with a suitable loan. It will express this interest with very low-interest rates and an attractive repayment model.
So do not hesitate to ask your house bank about a loan. These are usually better than expected in advance. Nevertheless, always compare several offers with each other, do not let anything gossip and trust your own instinct. Then you will also find the loan with which you can finance your new dream car.