Most new cars were financed by credit from car buyers. In this category of loan types, they often have the choice between these three options. A classic installment loan , a balloon or a three-way financing. Normally, a car loan is cheaper than normal installment loans. Of course, this has its background.
Car loan cheaper than a standard loan
The banks or one of the The Duke and the Dauphine investor, unlike the normal consumer credit, has the security to confiscate the vehicle. As soon as the customer is in arrears with the installment of his loan, the banks have the right to collect the car and most of the time he deducts the residual value of the outstanding amount.
The group-owned Autobanken of VW, BMW or Mercedes often offer an even cheaper bank loan at a new car purchase. But do not fall for it: Anyone who believes that he has properly taken care of a bank loan, then does not know that as a cash payer often a few more percent discount discount bar are.
In today’s market, there are many offers. Among others, from the savings bank to special online loans such as Auxmoney. In addition to one of the usual installment loans from the bank, the Autobank also offers the balloon financing or the so-called three-way financing. We show him a direct comparison to understand the different types of car loans.
The famous installment loan is a favorable condition
The free-way financing is split. The car buyer pays a certain part of the vehicle’s value and after the financing expires, which should normally be over after three or four years, the customer’s choice is whether to buy the car and continue to finance or return it. This financing is very similar to leasing.
Also with the balloon financing the buyer pays a fixed sum. Compared to the other rates, these are very low. But at the end of the repayment period, after about three years, a high final installment will be due. Also called balloon.
Anyone who has the direct idea to want to keep his car anyway, should get a normal loan with installment financing . In the installment financing, they pay the same amount every month and in the end, they own the vehicle.