The car loan with final rate is a very popular financing model among consumers, which is mainly offered by car banks. Just like with many other loans that are rather superfluous or useless, common sense is also required for a car loan with a closing rate.
Final car loan – lots of car for little money
What are the advantages for consumers if they take out a car loan with a final installment instead of normal car financing, which is perfectly legitimate? The question is easy to answer. With a car loan with a closing rate, you can finance a lot of car for a relatively small rate. This means that this financing model primarily appeals to consumers who want to finance a car that they cannot actually afford.
Because when it comes to the purchase of a car, most consumers are shown their limits by the monthly installments, because the normal server cannot afford to finance because the installments would exceed his monthly budget. That was a blatant example, but it could go on and on. The fact is that many people can afford more cars than they can afford through the final installment car loan.
The monthly charge is limited, because at the end of the contract there is the final installment, which can then be financed for a correspondingly long time or you give the car back to the dealer and amaze the neighborhood that you have a new car again moves.
The car loan with the final installment is expensive
In terms of interest rates, this financing model is significantly more expensive than traditional financing, which is sometimes even offered as zero percent financing without interest. However, this fact is completely neglected by consumers who take out a car loan with a final installment because they have simply changed their priorities.
If you want to save money when a car is to be financed, you do not use the most expensive financing option, but obtain a cheap loan from a direct bank and then go to the dealer like a cash payer. If you can negotiate well, you can get the cost of the interest back from the discount on the vehicle price. That is clever and sensible.
The car loan with a final installment is of course also a sensible alternative for people who need a car, but really have to make do with a small budget, such as single mothers who have to take their children to daycare or trainees and students.
Take credit with your mind
When it comes to car financing, everyone who buys a car and finances the purchase price should use their brains. The car is a means of transportation and not a prestige object and if it does, then you should be able to pay for it in cash. If you have to finance, you should always buy the car to match your income and not let your neighbors impress you. The clever saying also applies here: “You can’t have everything”. That is why it makes sense to think in advance when buying a car, how much car you can afford, how high the monthly rate can be, and at which dealer it is cheapest to buy the car that meets the requirements in terms of appearance and price buy there.