Investing in a car can pay off, because it is a great helper when we want to get from point A to point B, but it also gives us a chance to get a better-ranked job or just go out on a trip with my girlfriend . A big obstacle for many of us is still the high price, which can exceed hundreds of thousands of dollars. Does it make sense to reach for a loan or should we finance the vehicle from our own resources? What are the other options?
Cash in the form of own resources
After graduating from high school or college, graduates have almost no money to afford their own car, but thanks to the fact that their parents started building savings years ago their own car is not such a problem. Although these savings should rarely be used for housing.
Do you have a large enough amount to hand for the means of transport? Great, just choose the brand, type and still the same day you leave in your own. The advantage is that you immediately become the owner of the car without being burdened with any credit or leasing. Unfortunately, not everyone has the amount to afford something like that from his own pocket.
Have you looked for a sting that you simply have to have but don’t even have a dollar on your account? Banks and non-banking companies provide so-called non-purpose loans that you can use for anything you want, including a new car crash.
Of course, a bank loan is more profitable, but to get it, prepare yourself for proper “lustration”. The application can be submitted online or directly at the branch. What should a potential client meet to lend to him?
- have a correct payment history without an entry in the debtors register
- have a steady income that can be evidenced by your bank statement or pay slips
- not be in probationary or notice period
- an employment contract of indefinite duration is an advantage
- high enough income
- absence of loans from other companies
- without execution or insolvency
Indeed, the bank must protect itself from any client who is not 100% sure that it will be able to meet its obligations. On the other hand, look forward to a pleasant interest rate with an acceptable APR and a fixed installment that you can occasionally suspend in case of problems. It is also no harm to insure yourself if you are unable to repay the loan for health reasons or if you lose your job.
As a rule, non-banking companies will lend you some of the indentations in the registers, but rely on the fact that in the end you will pay a much larger amount.
Both bank houses and non-banking companies offer special-purpose loans to their clients, so-called “car loans”. Its negotiation is very fast even online, in just a few minutes. New and used cars or commercial vehicles can be financed. The advantage is that you can arrange such a loan directly from the vehicle dealer or directly in the bazaar. The disadvantage is that the technical card must be left to the company for pledge and if necessary ask for its submission, for example for MOT.
In this case, the client assumes all responsibility for the vehicle. It is necessary to deal with the repair, maintenance and possible damage of the car, which could lead to a decrease in its market value. This form of financing is primarily intended for entrepreneurs and self-employed. It is rather a type of lease and does not belong to its users during the repayment period. The owner of the car is a leasing company, but as a tenant you can usually get the leased property into ownership if all the terms of the leasing contract are met.
It is designed for non-business persons and, as with financial leasing, the car is the property of the company that provides this service. Negotiation is very easy and without great demands on the client. You simply pay for using the car, so it’s about renting a car. Usually after two years, the lease is terminated and you have the option to take another vehicle into use if you meet the conditions such as mileage or purchase the vehicle.
If you use the car very suddenly and do not want to pay for expensive MTPL and car insurance can be used so-called carsharing or rent a car in specialized rentals.
Is it better to buy a new car or a used one? We leave this to each of you, because everyone has different demands and financial possibilities.