5 golden rules for new car financing
If you decide to buy a new car, you usually have to pay for it by financing. New car financing is offered by different agencies. They are available, for example, from the traditional branch banks, but also from the direct banks.
In addition, most dealers work with a financing partner, with whom the financing can be concluded directly with the vehicle purchase. To ensure that new vehicle financing remains manageable, some rules should be taken into account at the end of the contract.
Many banks are currently offering cheap loans with a term of three years. Interest rates of less than three percent are on offerings from Best Bank and Cream bank. Even if interest rates are not exactly a risk, there are many sources of error when financing a new car. Basically, there are considerable differences between the car loans offered.
For example, it is always important to pay attention to your own income. In addition, the other conditions that arise in addition to the interest should be kept in mind.
Keep an eye on the household budget
When financing is concluded, your own household budget should be the number one decision-maker. So it is important to take into account which credit rate you can afford. The car will ultimately also depend on this. It is important to have solid financing that can be managed in the long term.
The possible down payment should always be checked based on the household payment. The down payment decides on the remaining loan amount. The affordable loan rate can finally be determined on the basis of the monthly surplus in the household budget. An emergency reserve must also be deducted from the general surplus.
Keep an eye on effective interest rates
Another important criterion is the effective interest rate. The banks basically work with differently high interest rates. In order to find really cheap financing, it is important that several loan offers are obtained.
Interest rates that are advertised in advertising are by no means sufficient. Only a concrete offer can clarify the true cost of credit. In the majority of cases, interest is calculated on the basis of creditworthiness. The decisive factor is the effective interest rate, which includes all costs and interest premiums.
Consider special auto loans
In addition to installment loans, most banks also offer special auto loans. They are particularly recommended as the interest rates here are usually below the level of installment loans. Interest rates are particularly low when the bank demands the car as collateral.
Capital Lender and the Lite Lender, for example, work with such designs. The deposited vehicle registration document is taken as security. Once the financing has been completed, the owner of the vehicle registration certificate is handed back to the owner.
The right credit query
The form of the credit inquiry is also decisive. They can avoid decisive disadvantages. The bank should only report a condition query to the credit bureau. On the other hand, a credit request should not be made.
A distinction is made between the two inquiries at the credit bureau. Although this also records the conditions query, this can only be viewed by consumers. The entry is not visible to banks or savings banks. Since the condition information cannot be viewed, it does not affect other credit inquiries.
Finally check the total costs
For every car loan, the total cost should be checked. A final comparison is crucial here. If consumers opt for the car loan from the bank, they can finally act as a cash payer at the dealer and thus negotiate one or the other discount.
In most cases, this makes the car cheaper. On the other hand, discounts are rare for dealer loans.