With the development of lending, even large, expensive purchases have become available. For example, cars. But in order not to get confused in the variety of offers for car loans, you need to understand this issue in detail and study the conditions in more than one bank. Only then will you be able to choose the most profitable option for yourself.
It is worth mentioning that banks often develop car loan programs together with car dealers - after all, both parties are interested in sales, and therefore create offers that best meet the needs of potential buyers.
Features of car loans
You can get a loan for a car in two ways - starting from the desired car model, or focusing on the bank's advantageous offer. In the first case, the easiest way to get a loan is directly at a car dealership, and it is often there that express loans, which are quite popular now, are offered, which require a minimum of time and documents. As a rule, for such a loan, only a passport and a driver's license are enough - and the car is yours. However, this ease of obtaining has its drawbacks - a less favorable interest rate - for example, 2% higher than usual offers issued in a bank.
For the purchase of domestic cars, the state offers subsidies and compensates for 2/3 of the refinancing rate (approximately 5.3%). Thus, instead of the usual 12-15% rate, you can save and overpay only 8-13%.
Any car loan (in addition to the principal and interest) includes several more important expenses:
- Commission for opening an account (one-time or for the entire service period) - Several types of insurance (mainly CASCO + life insurance) - Installing an alarm on the purchased car - Registration of a car with the traffic police
It is worth asking your bank manager for more details about the details of a car loan, as additional expenses may vary depending on the conditions and methods of obtaining.
Registration process and required documents
The terms for which banks issue a loan vary from a year to 7 years, and the interest rate directly depends on this. However, some banks deliberately hold the interest rate regardless of the maturity date, which immediately makes them attractive to customers.
You can get a loan both in cash and immediately by transferring to the dealer's account.
However, banks often put forward their requirements for lending cars, and this must also be taken into account. Some do not provide loans for the purchase of used cars, others ignore the Russian auto industry.
The most important thing for the bank, as always, is the financial solvency of the client and his reliability. Among the required documents are a passport and a driver's license, however, many credit organizations offering more favorable conditions are more serious about checking potential customers, demanding also a 2NDFL certificate (sometimes a copy of a work book), an income statement, a copy of an agreement with a car dealership and an invoice on the car.
Besides financial documents, banks also pay attention to driver's licenses. For example, a bank may refuse a novice customer with no driving experience who wants to buy a very expensive car.
Features of insurance
A car bought on credit is your guarantee of a refund to the bank, therefore the most important point in obtaining a car loan is insurance. As a rule, banks set strict requirements for insurance and the life of the borrower, and the car itself for the entire loan period. This is done so that in the event of an insured event (car theft, accident with irreparable damage), both the bank and the consumer have guarantees.
In case of an insured event, the insurance company transfers the money to the bank, and only after that the loan is considered repaid. Until the insurance has covered the loan, the client must pay the money in full.
There are two types of insurance: CASCO and OSAGO. OSAGO is Compulsory Motor Third Party Liability Insurance, which covers only a number of insured events, but is largely unreliable for beginners.
CASCO is a car insurance against any accidents, including theft. CASCO is considered the ideal insurance for those who do not want any problems, and therefore it costs more - up to 10% of the total cost of the car. Most banks require registration of this particular insurance, but there are also a small number of those who are satisfied with OSAGO. It is important to take into account that such banks require a large amount of an initial payment - usually from 30% of the price of the car.
A car loan is, perhaps, one of the most justified types of lending, because a car is an expensive and sometimes unaffordable purchase, but at the same time it is often really necessary. If you have correctly figured out the terms of the bank and the nuances of payments and insurance, the car will not become a burden for you, but will only justify its benefits to the delight of you and your family.
