The car loan represents one of the main forms of financing aimed at obtaining the liquidity necessary to be able to buy a car. However, given the great boom that has involved the used car market in recent years, today a personal loan is often used which is then actually used as a car loan, but without having to provide upstream expense justifications.
Auto financing, more and more often, is offered directly by the dealership or by the vehicle manufacturer, but nothing prevents customers from inquiring at traditional credit institutions to obtain a more advantageous rate than the one proposed.
What to choose: dealer loans, from banks or finance companies?
The fact that a car loan can be obtained directly from a dealership does not imply that this will automatically be the one proposed directly by a bank belonging to the same group as the car brand. A distinction that can make a big difference depending on the proposing Institute. For convenience, this descending order usually applies.
- car loan from bank of the automotive group: starting from “0” rates to average rates with an amount of around 2 or 3 percentage points. Undoubtedly this type of product is the one that is most convenient, and normally also the easiest to obtain. To follow the process, you rely on the dealership, presenting only personal and profitable documents;
- car loan from private institution, such as bank (for example Unicredit) or financial (Capital Lender): these are generally products affiliated with the dealership. Faced with an increase in the possible signing of contracts, the institution is willing to grant lower rates than those normally applied. In order of convenience this should be the second choice;
- car loan from bank or external company: in this case you need to seek financing aimed at (normally buying new car, also through leasing) with a bank that offers this type of product. The process must be followed in first person, so it is also necessary to provide the documents relating to the car to be purchased. In order of convenience it occupies the third place;
- personal loans to be used as a “car loan”: especially in the case of used cars, or when the conditions proposed by the dealership do not satisfy, then the last chance is represented by the personal loan. This must always be the last option since the rates applied are always quite high.
Unlike what happens in the other financing methods, one of the most interesting and recurring features is the possible presence of the pre-amortization period, a period of about 6 months in which the loan installments remain substantially frozen.
How is the request made?
In all four possibilities, whether the car loan is requested from the dealership or directly from the finance company, the burden of assessing the application and stipulation remains with the credit institution which will have to analyze the customer’s parameters to ascertain creditworthiness.
In the case of a request through the dealership, it may happen that the loan application form is part of the car purchase contract. Here you have to pay attention to the signatures that you put, because if you want to take care of yourself, you run the risk of being rejected by the fact that both financial companies will have “possible” loans in progress.
As for the differences and convenience, undoubtedly go through the dealer “pays” in the sense that you will not have to worry about anything or almost. If, on the other hand, you approach the practice yourself (even in the case of online requests) then you will have to personally present the documents, and eventually make the required additions. Certainly, the dealer has more room for negotiation not only on rates but also for passing a slightly complicated practice.
How much can you get as funding?
Auto loans, on average, are approved for amounts not exceeding 85% of the total value of the car even if there are numerous virtuous realities online that also offer sums to cover 100% of the purchase price. The crisis in the auto sector also led to the sale of the car without advance, with a postponed installment. Obviously, each alternative has its own pros and cons.
When can auto financing last?
There are also standard limits for the installment and repayment period: ranging from 6 months up to a maximum of 5 years. In 2015, several banks and financial companies proposed interesting offers on both new and used car loans, which seem to have been confirmed also at the beginning of this 2017. Let’s find out together.
- Cream Bank, a product designed to measure
Cream Bank has thought of all its customers with an ad hoc car loan, designed to satisfy every type of purchase need. The Cream Bank car loan is also designed for the purchase of new, used or Km 0 cars, and the choice options can be expanded thanks to the products offered directly by Lite Lender Company. Given the 100% digital procedure, in fact these are often personal loans, but the rates applied are very competitive;
- Auto loan is fast with Capital Lender
The online car loans of Capital Lender offer customers maximum freedom of choice and absolute convenience in managing the new car. The characteristics of Capital Lender auto loans, in fact, allow to better plan the expenses, spreading the payments over time and being able to also insert in the sum requested the amounts related to the registration, stamp duty, transfer of ownership and other accessory expenses related to the car. The limit may be in the maximum amount, considering that Capital Lender reaches up to 30 thousand USD;
- Best Bank, the car loan with an extra gear
Affordable rates, simplified request methods and, above all, numerous accessory services designed for maximum customer peace of mind, the Best Bank car loan is one of the most beautiful innovations in the sector in 2015/16. The loans, all at zero cost, also allow the purchase of the car in the name of maximum savings. In some cases you can even lower the installment, aiming for the payment of the final maxirate.
- Up to 10 thousand USD
An amount suitable for the majority of small cars, with the possibility of requesting totally online and an average fixed rate. Especially since we moved from Spin Lender to Across Lender spa, this alternative must certainly be considered.