Car loans are one of the most demanded services offered by banks. Many are attracted by the opportunity to buy a car on credit and immediately get behind the wheel, paying not very large amounts monthly for several years. A loan, of course, is less profitable than purchasing with your own accumulated funds, but the market for such offers is vast enough to choose the least costly option.
Subtleties of car loans
If you know some of the nuances of obtaining and providing car loans, you can choose the most profitable way to buy a car. A loan can be obtained directly at a car dealership or at a bank. To begin with, you need to inquire about the conditions for obtaining a targeted loan for the purchase of a car in several banks and find out in which of them you can get money at the lowest interest. In banks, for a loan, you will need to provide a larger number of documents and wait a little longer for a positive decision than in a salon, but in some cases this can result in savings of 2-3%.
In the salon, you can receive a decision on granting a loan with a minimum set of documents within a day. As a rule, each salon has representative offices of several banks, so you will also have the opportunity to choose among these credit organizations. When registering, you should carefully read the contract and find out if it does not include any one-time bank charges or extortionate insurance amounts. By the way, besides them, when buying a new car, the bank will oblige you to conclude a CASCO auto insurance agreement, payments under which can be 5-7% of the cost of the car annually.
To avoid applying for CASCO, you can take a regular consumer loan for the maximum amount that the bank can offer you, and the funds that you will lack for purchasing a car can be obtained in the form of a car loan.
What cars to buy on credit
Even if you want to borrow a used car in the hope of saving money on such a purchase, it is not a fact that it will be really profitable. Firstly, the interest on such a loan will be higher, since the likelihood of its profitable resale in case of your insolvency is very low, in contrast to the resale of a new car. Secondly, you will also have to pay higher interest on insurance programs. Therefore, in some cases, it is more profitable to get a loan for a large amount and buy a new car.
Many banks work with car dealers in partnership programs that allow them to offer low rates to those wishing to get loans for those brands of cars that participate in such programs. The choice of well-known brands is large enough, so you will have the opportunity, for example, by paying an initial payment, to get a loan for the remaining amount at an interest rate lower than 10%.
