Both commercial banks and lending institutions, which are closed to automobile manufacturers, grant the loan with car as collateral on different terms. Both bring their own advantages and disadvantages, which must be weighed against each other. In terms of the type of transaction, the car loan of a commercial bank largely corresponds to a normal installment loan, but with lower interest rates due to the additional security. The borrowing rates may well be 2-4% lower than a non-earmarked installment loan. After the purchase of the vehicle, the vehicle is simply handed over the car letter and then paid off the loan over the agreed period. After the loan has been repaid in full, the vehicle owners receive the vehicle letter back and become the owner of the vehicle.
The advantage over Autobankesh lies above all in the fact that customers can negotiate discounts and bonuses with the dealer, if they pay the purchase price completely in cash. As a result, the price can be noticeably reduced with appropriate negotiation skills. In addition, the borrower remains independent as far as the choice of vehicle is concerned. So he is not bound to the models of a particular brand or manufacturer in the selection.
Loan with car as security from the car bank
Even automotive banks offer certain advantages, with which you to win the favor of the customers. Not infrequently, the financing is also part of the overall marketing strategy, and the often convincing by very low interest rates. In addition, with the Autobank usually also the so-called final installment financing can be claimed. A closing rate is a particularly high rate that matures towards the end of the term. One advantage is that the normal rates are very low over the entire term. However, there is still an additional down payment at the beginning of the term. In principle, there are three ways to settle the final installment.
The rate can be paid quite normally and the car loan can be repaid as collateral. The ownership of the vehicle then passes directly to the owner. This is also the cheapest option in terms of interest rates. Often this rate is too high to be paid directly. In this case, the rate itself can be further funded, which, however, increases the term and borrowing costs. The third possibility provides for a return of the vehicle, if this has been agreed with the dealer at the time of purchase. The final installment will be completely canceled and the customer can choose a new vehicle directly for it.