Three ways to buy a car: choose the most profitable one. Where and how to get an auto loan for a car? The amount of loan payments may be added to
A car loan is a bank loan for the purchase of a car. There are loans, the conditions of which include the presence of a down payment, and also without it. Of course, the second option is more tempting.
Borrowed funds to buy a car
Loans are issued for cars of any brand; not everywhere they can approve funds for used cars and with high mileage. Car loans without a down payment are available from many financial institutions. The free online service https://zaimme.ru/ will help you choose a profitable loan that suits your capabilities. The convenience of applying for a loan is that you can submit an application through the website and receive an answer on your phone. Now you don’t have to knock on the doorsteps of all financial institutions to find out the conditions for obtaining credit funds and applying for them.
The better opportunity to take out a car loan from a bank rather than saving for a car for several years, 5 reasons and advantages:
- Availability of a car. Even if there is no money, a car loan allows you to get the right amount for the car you like. After completing the loan agreement, you can immediately get behind the wheel and drive in the direction you want;
- The cost of the car with the bank commission will need to be paid in five to seven years, but you will be the full owner of the car;
- Loyalty contributions and interest. Unlike basic loans, a car loan compares favorably. The interest rate in financial institutions under such a program is practically no different from a mortgage. There is a loan without a down payment, which makes it easier for ordinary citizens who do not have this amount at the time of registration. Therefore, you don’t have to search for the minimum amount;
- Prompt and simple registration. It is not necessary to go to a banking institution to approve and issue a car loan. The contract can be drawn up directly at the car dealership at the time of choosing a car. Each car sales showroom has partner banks that issue loans without leaving the pavilion. To apply, you must have with you: a passport, information and a receipt about the car and TIN. There are also term loans, the conditions are almost the same, but the interest rate is higher;
- Car insurance. Cars purchased on a loan must be insured under the CASCO program. This guarantees that in the event of an accident or serious damage to the vehicle, the insurance will cover the loan amount in favor of the banking institution and the debt will be removed from you. CASCO can cover even minor, cosmetic damage. Please check the details of the insurance program when applying for a loan at the salon;
- Affiliate programs and promotions. Often financial lending institutions offer additional conditions for obtaining facilitated lending. There is a buy-back program that guarantees the return of the car to the bank until the loan is fully repaid, in the event that it becomes clear that you are unable to repay the loan funds. The trade-in program includes the opportunity to transfer your personal old car to the bank as part of the loan repayment.
Features of lending
As with any banking transaction, be extremely vigilant and attentive when concluding a loan agreement. Read the loan agreement carefully, check all the terms and conditions. Of course, in the long run you will overpay for the car, this is a necessary condition, it is inevitable. But this is an opportunity to get a car now and exactly the model that you want and can pay for over time.
Not every person has the opportunity to buy a new car. Nowadays, you can choose an option no worse than new, but with mileage. But what should those who currently do not have enough money even for a used model do? A car loan will come to the rescue - an ideal compromise solution for those who do not have the entire amount at their disposal at once. Before taking out a car loan for a used car, you should analyze the many options offered by banks and find out the correct algorithm for completing the transaction, then the final costs will be minimal.
Issues discussed in the material:
Is it possible to get a car loan for a used car?
Let's say you firmly decided to buy a car for personal use, but even a loan for a new model turned out to be unaffordable. Car dealerships and banking organizations offer different credit programs every day, but interest and mandatory monthly payments amount to a significant amount for your wallet.
By choosing a reliable company, you can secure yourself a fairly good deal. By purchasing a used car on credit, you get a convenient means of transportation, and also guarantee yourself stability and small payments. Just choose the optimal loan program, and you will no longer have to travel on a crowded subway or bus.
But not every vehicle is available for purchase on credit. Used cars have fairly clear requirements for many parameters: weight, age, price and many others.
The following are eligible for the lending system:
- Domestic vehicles that have been in operation for no more than 5 years, as well as foreign ones no older than 10 years.
- The price should be in the range from 500 thousand to 1.5 million rubles, the exact limit is set by each specific bank.
- Weight should not exceed 3.5 tons.
- Mileage: maximum 100,000 km for foreign and 50,000 km for Russian cars.
An integral part is the registration of a CASCO insurance policy.
Typically, transactions are carried out with car dealerships, and not with individuals. The bank cannot completely trust an individual; in this case, the risk of incorrectly assessing the condition and history of the vehicle is very high.
For reliability, you will have to pay an additional 5-10% of the cost; this markup on the market value is usually set by car dealerships.
This 10% is fully justified in the future, because when buying a product secondhand, you can never know exactly what surprise awaits you. By purchasing from trusted intermediaries, you will always be confident in the correctness of your choice.
Banks have absolutely standard requirements for borrowers planning to take out a used car on credit:
- The borrower must be at least 21 years old.
- With at least one year of work experience.
- At the same time, he must work in his last job for at least six months (some banks allow a period of 3 months of work experience).
- Availability of a passport of a citizen of the Russian Federation, as well as registration at the place where the loan was issued.
- Impeccable credit payment record.
It is much easier to obtain bank approval for drivers with extensive driving experience and a license issued at least 10 years ago. Young people and people of retirement age can rarely easily complete a transaction, the same applies to preferential lending with state support.
What documents are required to take out a car loan for a used car?
Next comes the time of submitting documents and completing all the necessary paperwork. The key factor here is the independent process of collecting and preparing the package - this is one of the main rules for processing such a loan.
As you know, the process of purchasing a new vehicle is greatly simplified by the fact that the competent completion of all required documentation rests on the shoulders of the sales showroom managers.
An approximate list of basic documents and certificates may look like this:
- purchase and sale agreement;
- passport confirming the technical condition of the machine;
- compulsory insurance policy;
- paper confirming the adequate establishment of the market price;
- a receipt indicating that the advance payment has been made.
It is mandatory to have a personal bank account to make non-cash payment transactions.
If the owner of the car involved in the transaction is a private person, then the bank has every right to ask about the existence of a previous purchase agreement, as well as all the necessary documents indicating payments made.
The process of organizing a purchase requires quite a lot of time; you should take care of collecting papers in advance. And in the case when there is neither the time nor the desire to do this on your own, it is better to contact a car dealership that specializes in this. In the future, the overpayment for such services will be justified.
Used car loan programs
- Interest-free car loan
Zero percent overpayment on a loan for a used vehicle and no monthly commission sounds a little suspicious, doesn’t it? But, most likely, you will not find any catch even if you read the contract very carefully. Even the size of the fee for collecting and processing a package of documents is not particularly surprising. Banks are ready to reveal the essence.
The situation looks like this: the borrower is given the opportunity to take out the vehicle in installments. That is, half of the amount is paid by the buyer as a down payment, and the second part, but minus its commission, is paid by the bank. Thus, the car dealership loses a little in monetary terms, but at the same time has an increased volume of cars sold. Until recently, the scheme looked like this. But these days, factoring operations have become obsolete due to the fact that salons already have enough clients, and due to the growing level of competition in the market, it is not possible to deliberately inflate prices.
But what is the secret? In the deliberately inflated price of a compulsory insurance policy. The bank has contracts with several insurance companies, which allows it to create the appearance of choice. Under such programs, the policy is issued at a higher price, and part of the profit goes to the bank. It is due to this that the margin on the lending itself is reimbursed.
- Buying a used car on credit without a down payment
Not all banks can afford to issue such loans without a mandatory down payment. Due to the fact that the scheme is quite risky, it requires an individual approach to each client.
This type of lending is classified as collateral. For the purchase of a Russian vehicle, rates of 5.5-12% are provided, taking into account all the benefits provided, and depending on the scheme of a particular bank, government subsidies may be provided. For example, at 10% per annum, after three years, buying a car for 300 thousand rubles will be 38,465 rubles more expensive.
In this case, the bank practically forces its client to take out an insurance policy from one of its partners; its price can vary from 30 to 60 thousand.
It turns out that in the absence of an initial contribution, you need to be prepared to overpay for CASCO registration.
- Repurchase of car loan debt
This program involves making payments in small amounts throughout the entire loan period, and the majority of the remaining balance must be repaid in the very last month. These funds can be obtained both from a re-loan and from the sale of a car. In the future, this car can only be sold through a dealer, who will carry out both maintenance and any service.
The loan term under such an agreement is 3 years or less; it can only be taken from official dealer companies. In the first month you will need to pay 10% of the total cost, and in the last month - up to 55% of the total amount. In such transactions, there are very strict and limited requirements for mileage and depreciation of cars. This algorithm will be convenient for those who can afford to change their car every 2-3 years.
Buying a used car on credit with bad credit
Not all banks are willing to work with borrowers with a bad credit history, but you can still choose several options. For such cases, special lending conditions are provided, these may include increased interest rates and a fairly large down payment. Before deciding on the best option, you should carefully study all the market offers.
- Without CASCO insurance
For drivers with decent experience, CASCO registration is not necessary. But this does not apply to all brands, and also implies a shorter payment period and a lower cost of the car. However, the down payment can be quite large. As in any other case, there will be quite a lot of requirements for the borrower.
- Without income certificates
With this scheme, all possible risks of the bank will be covered by increased interest on the loan. Additional, more specific insurance policies can also be issued, for example, life insurance for the driver. For purchases with the provision of only a passport and SNILS, a mandatory check will be carried out using intrabank scoring systems. It will be much easier to get one additional certificate and not overpay for the loan.
What else do you need to know to get a profitable car loan for a used car?
After analyzing all the options offered by banks, you need to determine where it is more profitable for you to take out a car loan for a used car. Next comes the crucial moment of registration.
The sequence of actions should be as follows:
- The first step is to decide what kind of car you want to buy.
- It is necessary to study the documentation requirements of the selected bank in more detail.
- Now it’s time to collect a complete package of papers and submit it for review (passport, personal income tax certificate preferably in two copies, technical passport, etc.)
- It is necessary to provide a vehicle assessment certificate issued by an official assessment organization.
- In case of a positive response from the bank, it is necessary to make an insurance policy and start signing the purchase and sale agreement.
- The loan money is first transferred to the borrower, and then from his account it is sent to the salon or individual responsible for the sale.
- The last stage is the transfer of the vehicle for personal use to the new owner.
Purchasing a used car is a rather complicated process, but it is also quite profitable. Within 2-3 years such a purchase will be fully justified.
Buying a completely new car cannot boast of such benefits, since in just a couple of years its market price will be significantly reduced. This is precisely the reason to take it as a used one.
Where is the best place to get a loan for a used car?
The most profitable option would be to register with your bank, where the client already has a personal account or salary card. Usually, special conditions are provided for regular customers and good interest rates are offered. Of course, you should not immediately dismiss other organizations; perhaps the bank whose regular client you are does not work according to the chosen scheme, or the desired transport does not fit within the restrictions.
From time to time people wonder how they can get a car loan from Sberbank. Unfortunately, since 2014, the most famous bank in the country has not provided such a service, but there are several other options: a secured consumer loan or refinancing of loans previously issued at other financial institutions.
Advantageous offers from other banks:
Bank | Program | Bid | Amount, rub. | An initial fee | Payment term |
Credit Europe Bank | Autoexpress | 11-29% | 100 000 – 1 500 000 | From 10% | From 1 year to 5 years |
Bank Center-Invest | Passenger vehicles | 15-17% | Not limited | From 20% | Up to 5 years |
Metcombank | AutoFresh | 17-20% | 90 000 – 4 900 000 | From 15% | From 6 months to 6 years |
Zenith | For a used car | 18-100% | 90 000 – 2 400 000 | From 30% | From 1 year to 7 years |
Sethelem | Affiliate used (classic) | 19-22% | 100 000 – 8 000 000 | From 30% | From 2 to 5 years |
VTB 24 | AutoExpress | 20-26% | 100 000 – 1 500 000 | From 20% | From 1 year to 5 years |
UniCredit Bank | Used vehicle | 20-31% | 100 000 – 2 000 000 | From 15% | From 1 year to 5 years |
TransCapitalBank | Standard (used) | 20-24% | 75 000 – 5 000 000 | From 30% | From 1 year to 5 years |
Ak Bars Bank | Maximum (used) | 17-22% | 100 000 – 3 000 000 | From 30% | From 1 year to 5 years |
Bank "Saint-Petersburg | Mileage (with CASCO) | 21-23% | 60 000 – 1 500 000 | From 15% | From 1 year to 5 years |
Rosselkhozbank | Used vehicle | 21-100% | 100 000 – 3 000 000 | From 25% | From 1 month to 5 years |
Before you immediately rush to choose a bank to take out a loan, you first need to find out what car loans are and what they contain.
In general, lending is divided into certain branches, and one of these branches is car lending. This type of loan is targeted, because it is issued only for a specific purpose: purchasing a vehicle. But this is not the only thing you need to know before you go to choose a bank. For example, a future borrower should be aware of the following:
- The interest rate on car loans is significantly lower than on consumer loans.
- The loan term is much shorter, most often the loan is issued for a period of up to 5 years.
- A car loan requires down payments (unless, of course, you choose a loan program that excludes the obligation to pay).
- As part of a car loan, the purchased vehicle is registered as collateral for the loan.
- The maximum amount issued for a car loan is significantly higher than the amount provided for a consumer loan.
- A car loan involves several special programs that can satisfy most of the needs of the population.
- You don't need a guarantor.
- Since your car is collateral for the loan, banks are more accepting of late payments.
Loan collateral is a material asset that is officially owned by the borrower and has monetary value. This benefit is registered as collateral and in the event of failure to pay monthly obligatory payments to the bank on the loan, the bank has the right to put the collateral up for sale in order to pay off your debt to it.
But in order to get a car loan in your name, you must meet the following requirements that banks assign to borrowers:
- You are over 21 years old, but not older than 65 years old.
- You have an official permanent place of work for six months.
- Your financial condition gives you the opportunity to repay the debt to the bank without serious damage to your financial situation.
- If your credit history is good, you will be given a car loan on good terms. If your credit history is bad, then there is a chance that the terms of the loan will change for you.
The future borrower has two options where to apply for a car loan: to a bank or to a car dealership. Each of these options has its pros and cons, so before choosing a company, you need to study each option in detail.
If you decide to contact the bank directly, then the first thing you will need to do is choose it wisely. To do this, you need to check the selected organizations on the following points:
- Availability of an appropriate license to carry out car loans.
- Interest rate. If the rate is high, it means that you will end up paying the bank much more than the loan amount.
- What conditions determine the interest rate?
- What does the loan agreement contain? If this document does not disclose all aspects of lending, but only has clauses about the amount, term and interest, then this agreement is not suitable for you.
- The car loan agreement must include the terms of the loan. You need to study them and ask any questions you have.
- Also, the future borrower needs to know what penalties will be applied to him in case of late payment.
- Customer reviews of the financial company. If the reviews are mostly negative, then you should not choose this bank.
If, after checking, you have a positive impression of the bank, then you should contact them and find out more detailed information that will be useful to you when applying for a car loan. For example, the presence or absence of bonuses when buying a car, what may cause the interest rate to decrease or increase, what additional documents need to be brought and whether this is necessary, etc.
List of required documents
The specific list of documents depends directly on who is taking out a car loan: a legal entity, an individual entrepreneur or an individual.
For a legal entity:
- constituent documents;
- registration documents;
- financial statements for the last few years;
For an individual entrepreneur:
- registration documents;
- financial statements;
- application for a car loan.
For an individual:
- a copy of the passport of a citizen of the Russian Federation;
- a copy of the driver's license (if the car will be driven by several people, then copies of the licenses of all drivers are needed);
- a copy of the work book. She will confirm the availability of official wages. Before you give a copy to the bank, it must be certified by your employer;
Procedure for obtaining a loan
It is also very important to know exactly how to apply for a car loan, or rather, the entire procedure for applying for a car loan. This process basically takes place in 8 stages:
- Collect the necessary documents.
- Write an application for a car loan on the website of the selected organization in an online form.
- Submit the necessary documents to the bank.
- Wait for the results of checking the submitted documents.
- Conclude a purchase and sale agreement with the seller of the vehicle.
- Make a down payment if required by the loan program you have chosen.
- Conclude a CASCO insurance agreement and/or a life insurance agreement, if required by the bank.
- Conclude the necessary agreements with the selected bank (register the car as collateral and conclude a loan agreement).
Application approval
What does every borrower strive for when applying for a loan? It is for the approval of this very application. Moreover, approval depends on the following factors:
- Good credit history.
- The future borrower has a confirmed high and official salary.
- The borrower has been working in one place for a long time.
Basically, bank employees look at these 3 points when deciding whether to issue a car loan. Of course, if you have a bad credit history or don't earn much money, or you haven't been in your last job that long, you can still get your application approved, but the terms of your loan may change slightly. Exactly how they will change depends on the bank you choose.
Features of a car loan at a bank
Car loans from a bank have their own distinctive features, for example:
- You will be required to pay a fee to open your account.
- Monthly payments include interest for maintaining this account.
- Availability of various lending programs.
- Participation in various drawings, bonus programs, etc. is possible.
- Availability of additional lending conditions - insurance agreement.
- Registration of the purchased item.
- The future borrower must be over 21 years of age.
- Interest rates are slightly lower.
- Availability of additional fees in case of early repayment of the loan.
- The loan is most often issued for 5 years.
- Since the car is collateral, the original PTS is stored in the bank itself.
Loan through a car dealership
Another option to buy a car on credit is to apply for a car loan at a car dealership. But you need to remember that the car dealership in this case will not act as a credit institution; it is only an intermediary between the borrower and the bank.
In principle, applying for a car loan at a car dealership is not very different from applying for a loan at a bank, but, nevertheless, the first option has its own characteristics and nuances. In order to take out a car loan at a car dealership, you will need to present the necessary documents to the dealership and submit an application.
What documents will be required?
The list of required documents is similar to the documents that need to be submitted to the bank.
- a copy of the passport of a citizen of the Russian Federation;
- a copy of the driver's license (if the car will be driven by several people, then copies of the licenses of all drivers are needed);
- a copy of the work book. She will confirm the availability of official wages. Before you give a copy to the bank, it must be certified by your employer;
- income certificate (if required by the program you choose);
- a copy of the passport of a citizen of the Russian Federation of the spouse (if available);
- application for a car loan.
Procedure for obtaining a loan
The only thing that can be changed when choosing a car dealership instead of a bank is the procedure for applying for a car loan. If you decide to take out a loan from a car dealership, then you will need to complete the following points:
- Collect the required papers.
- Select a car dealership and a specific model of future property.
- Apply for a car loan.
- Wait for the application to be reviewed and a decision made.
- Draw up an insurance contract (if required).
- Conclude a purchase and sale agreement with a car dealership.
- Make a down payment.
Application approval
Even if the borrower applies for a car loan at a car dealership, he is also interested in receiving approval for his application. In order to receive a positive response, the borrower must give the impression of a reliable person, for this it is necessary:
- Confirm your official salary, which must be appropriate, taking into account debt repayment and family support.
- Work officially in one place for some time (usually six months).
- Have a good credit history.
Features of a loan at a car dealership
As mentioned above, applying for a car loan at a car dealership has its own individual nuances, which can be called features. For example, if the borrower takes out a loan at a car dealership, then:
- The processing time for an application by a car dealership is much shorter (unless you use the express loan program).
- At car dealerships, the requirements for borrowers are more lenient.
- The interest rate on the loan is higher than that of the bank (this is due to the fact that the car dealership is only an intermediary between the bank and the borrowers, so it is important for the car dealership to get a share of the profit for itself). On average, borrowers at car dealerships overpay by about 20 - 40% per year.
- The choice of banking organizations is smaller, since you can only choose those banks with which the car dealership works.
- The maximum amount issued directly depends on your financial situation.
- Car dealerships issue loans for an average of 3 years.
- A car dealership can issue a loan to a person between 18 and 35 years old.
- Convenience of obtaining a loan and purchasing a car.
- Opportunity to receive discounts and bonuses from the car dealership.
- If you want to add additional equipment to your car, its cost can be included in the loan amount.
Loan for a new car
If you are planning to buy a new vehicle using a car loan, then you need to know the following: in order to buy a new car profitably, you need to enter into an agreement for the shortest possible time and immediately pay about 50% of the debt as a down payment.
In our country, it is possible to receive benefits for the purchase of vehicles. Read about the conditions and rules for receiving it on our website.
Used car loan
You will find details on our website.
If you do not need a new car and want to purchase a used car, then you need to know that the following conditions apply to such vehicles:
- a domestic used car should not be older than 5 years;
- there are restrictions on the mileage of a car;
- a foreign car must not be older than 10 years.
Also, when purchasing a used car on credit, the borrower cannot refuse to pay the down payment.
How to get a loan with bad credit history?
If you are a borrower with a bad credit history, then you should know that the terms of your loan will most likely change, for example:
- you will not be able to refuse to pay the down payment;
- the interest rate will be higher;
- The loan term may be reduced or increased.
If you are denied a loan from a bank, then you should contact car dealerships or car pawn shops.
Who doesn't dream of owning a car? At the moment, it is very difficult to do without it, since the busy rhythm of life forces us to travel long distances every day, travel on several public transports, waste time, money and our own strength. However, most Russians are not able to purchase a car with cash. Therefore, absolutely all banks and car dealerships provide the opportunity to take out a car on credit. This option is used by almost every future car owner, because in this case there is no need to immediately part with a large sum: it is enough to make a certain monthly contribution, previously agreed upon by the bank.
Taking out a car loan secured by a car: what is needed for this
So, you've thought carefully about what kind of car you can afford to get without too much damage to your own pocket. If you are serious about becoming the happy owner of a new or used car, you don’t need to collect too many documents to apply for a loan. Everything is quite simple and can be done quickly.
What documents will you need to take out a car loan? Basic:
- passport of a citizen of the Russian Federation (with permanent registration)
- driver license
True, some banks also require copy of work book with a certificate of solvency in the form 2-NDFL(it is taken from the employer. Keep in mind that the monthly loan payment should not be more than 40% of your official salary).
In some cases, the bank requires you to provide other types of documents, which is purely individual and depends on the specific bank and your personal data.
Are you planning to take out a car loan without a down payment? This service is in wide demand, since not all car enthusiasts have the opportunity or desire to make a one-time payment of 20% of the cost of the car. Banks provide similar services, but there are certain nuances that we will now look at. Firstly, the interest rate on a car loan may be higher than with the first payment. Accordingly, you will have to overpay. Secondly, the bank will take a more thorough approach to getting to know you and your credit history in order to make sure that its risk is minimal. This means you will spend an order of magnitude more time and effort.
Almost all banks offer the opportunity to take out a loan secured by a car. This option is the most optimal for both parties: if you take out a car loan and violate the terms of the agreement, that is, you make late payments for a long time, the car becomes the property of the bank, and after its sale, all funds spent will return back to the lender’s cash desk. If everything goes well and your loan is repaid on time, the bank will not have the right to claim the car.
We offer you to use a unique service: send an application to 30 banks, approval within 24 hours!
How to get a car loan from a car dealership?
If you have decided on the desired brand of car, and intend to contact the car dealership directly to apply for a car loan, to save nerves and time, prepare for a conversation with representatives of various banks. Better yet, leave a request in advance through the loan selection service. In this case, the professionals will choose the optimal loan terms for you, and you will only have to decide on the option that you consider more preferable.
At the car dealership you will be offered to take out a loan to purchase a car of two types. So, you can take out a loan for a used car or give preference to a new car.
When you buy a used car, you can never be sure of its quality, because the driving style of the previous owner will remain a secret.
It should be borne in mind that used cars are much more affordable in price, and the interest rates on them are usually the most favorable. But be careful and careful: be sure to make sure that the vehicle is in good working order and in good condition.
Where can I get a loan?
Remember: the stingy pays twice. You should not contact dubious organizations and small car dealerships to take out a car on credit. This is fraught with unpleasant consequences: from pitfalls in the form of increased interest rates or hidden fees, to possible fraud on the part of creditors. A car loan must be applied for in banks with a proven reputation and large, famous car dealerships (). Yes, a popular lender will charge high interest rates for their services, but this will guarantee your safety. You should not trust banks that are ready to give you money with one passport: most likely, bad intentions are hidden behind this. It is also advisable to check the car by VIN code - additional security measures will never be superfluous.
What to do if you decide to take out a car loan
If you decide to take out a car on credit, take it seriously and responsibly. Consider all the options offered and decide what is best for you: take out a loan secured by a vehicle title, apply for a loan secured by a car from a bank, or choose a loan for a car without proof of income. The amount that the bank will give you depends on the impression you make on creditors and the numbers indicated in the documents provided. Make sure that the technical condition corresponds to the declared characteristics (if you are going to buy a used car). Purchasing a first car is an important step for every person. Cars purchased with a car loan require careful attention and are subject to mandatory insurance. Some companies require full CASCO coverage, others allow you to make a choice at your own discretion. In this case, the car is considered collateral, and if it breaks down or becomes unusable, the insurance company will compensate the creditor bank for the damage. After you have received a car loan, do not forget to decide on a payment schedule, and remember: now you need to allocate a certain amount every month to pay for the long-awaited purchase.
Crises come and go, and our compatriots have long been accustomed to fluctuations in exchange rates and an unstable financial situation. Every year, a new young generation builds families, opens businesses, maneuvers in conditions of inflation and defaults - but no one has canceled the classic “we must go.” There is no money, piggy banks are no consolation, and I desperately need a car. What to do, what to do? In search of a chance to own four wheels, thousands of people head to the welcoming doors of lending departments. How to take out a car loan wisely and not get hooked on “eternal retribution”? Several important points will help save time, money and nerves of the potential future owner.
At any car dealership, the client is offered various conditions for car loans.
First of all, it is worth remembering: no salon as a legal entity can provide you with a loan or installment plan for the product offered. A car loan can only be issued by a bank, but don’t worry - several representatives of various banks will still compete for your attention, offering to fill out a request right on the spot and assuring the client that their terms are favorable. There can be no guarantees whether the request will be approved by the bank within a certain period of time, but you can try your luck with several at the same time. Managers will help you draw up and sign all the necessary papers right on the spot.
So if you come to a car dealership with the firm intention of not leaving its walls without the treasured keys in your pocket, prepare in advance the most complete package of documents.
What you need to have with you so as not to run twice for documents
The list of papers required to purchase a car can vary from the minimum set - a passport with registration and license, to a certificate of income, Taxpayer Identification Number (TIN), pension certificate, certificate of state registration. registration, etc. Now many banks are ready to work with a minimum package for a solvent client.
Whatever option (installment plan or loan) you choose, be prepared for the fact that the down payment will include not only a certain percentage of the cost of the car (let’s say, exactly known to you in advance), but also the amount of down payments and commissions. When planning the event and the initial calculation, do not forget to plan ahead for a possible 15 percent of “unplanned” expenses.
How to correctly assess your capabilities and what commissions and fees you will face
This is where the analysis of the pitfalls typical of any process related to the banking system begins.
The simplest and most “transparent” method is installments. And indeed - 0% per annum, nothing extra, pay yourself in parts to the best of your ability and never know grief. Tempting? That’s right, but this method has two significant disadvantages that hit potential clients hard at the time of making a decision:
- An initial fee. It may vary, but on average it is 60% of the total purchase amount. Even if we are talking about purchasing an inexpensive car, the amount comes out to be quite a lot, and if you already have one on hand, what, other than the conditions of extreme urgency, prevents you from saving up a little more and, adding, making the purchase yourself without bank intermediation?
- ABOUT limited time. Depending on the cost of the car, it will range from 12 to 24 months. Break the remaining 40% of the cost of a good car into 12 payments - and the offer may not seem so tempting.
The credit option offers much more profitable options on these two points. Here the contributions will be smaller (approximately from 7 to 20% of the amount), and the payment terms can be extended to 5–7 years. But before you grab a pen and sign, carefully read the contract from cover to cover with inserts, small text and asterisks. It is advisable to do this with a pencil and a calculator at hand - before agreeing to a favorable annual rate, you need to carefully calculate all the commissions added to it.
An alternative to a car loan can be a consumer loan
The following may be added to the loan payment amount:
- one-time commission;
- loan grant fee;
- commission for cash services and monthly account maintenance;
- commission for servicing related accounts (for example, if, when opening an account in a new bank, you are offered a credit/deposit/savings card in addition to the main credit account);
- daily penalty for late monthly payment;
- in some cases - a fee for the possibility of early repayment of the loan;
- compulsory CASCO insurance;
- compulsory life and health insurance for the buyer.
Calculate the total overpayment amount– how many times will the final cost of the car exceed the original one and do you agree to this? Calculate everything, including the possibility of “surprises” popping up after a year or two - they will not be pleasant.
It is important to remember: until the loan amount is fully repaid, the car you buy belongs to the bank. The purchase serves as collateral for the loan and can be taken away by a court decision and sold by the bank at auction.
How to get a used car on a car loan
Clients are not always even aware of this possibility. But yes, it’s quite possible to get a used car cheaply, and at an annual interest rate at that. This option has a number of significant advantages and disadvantages.
One of the advantages is that a loan for a used car will be the cheapest in terms of initial costs. And the price tag is reduced, and the contribution is small. With the same pencil, calculator and careful calculation of possible disadvantages, read the contract.
Of the obvious risks - the car may not be in the best condition. Test drive and diagnostics at a service station are provided in exceptional cases; Most likely, you will be offered a visual inspection in a closed, guarded parking lot of the bank. Consequences of an accident, unobvious internal damage and small parts - like any used purchase, a car cannot be presented with an ideal background.
In addition, the car is not always located directly under the bank. The client may be offered paid participation in an auction, as a result of which the cost of the lot turns out to be obviously higher than the initially reduced amount.
And then - we are still talking about a loan, which means that mandatory insurance and down payments from the previous section remain an important part of the calculation.
Before signing a loan agreement, you need to calculate all costs
What are the alternatives?
If you initially considered the installment plan option and have a starting amount on hand, instead of a car loan, you can take out a car loan from the bank. It can also be carried out as a loan for repairs or a mortgage - the main thing is to decide where to get the necessary money for the purchase.
It is not so easy to get a large amount - you will certainly need income declarations and a willingness to repay the money, taking into account possibly higher interest rates than those offered for a car loan.
So what is the benefit of this option?
- Insurance. When making a purchase with “pure” money, no one will force you to purchase additional mandatory insurance included in the terms of the contract.
- Ownership. Whatever happens, the initially desired car will belong to you and only you from the first days of purchase.
However, if the urgency of the question “I want to take a car” is the cornerstone of making a purchase, there is little starting capital, and you want to get behind the wheel the sooner the better, a bank loan in a few hours can solve a problem that previously seemed impossible. The main thing is to remember: attentiveness is the consumer’s lifeline, and the most important thing is always hidden in the insidious lines of small handwriting.
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