For most of us buying a car is still associated with a large investment. Whether you really need one or you just want to treat yourself, which car you buy and how you want to finance it should be well thought of.
When choosing your car and financing it, your financial situation should always be a determining factor. Do you have any savings you would like to use? Do you already own a car that you would want to sell? If so, how much is this car still worth? Determine clearly how much money you have available.
In this blog article we will introduce you to the most common types of financing:
- Credit at the bank
- Credit at the car dealer
You have saved enough to afford your dream car? Did you take into account the costs of insurance, tax, maintenance and fuel? Great, you’ll be able to finance your car without any help. However, make sure that you always keep a reserve of savings that you can use in case of an emergency.
Car loan at the bank
If you do not have enough money to fully self-finance your car, or if you do not want to spend your savings on a car, then a bank loan might be the right way for you to finance it. (In addition, it is probably the most commonly used method of car financing). In view of the currently low interest rates, a loan for the purchase of a new car can be a good solution.
Discover the current special conditions for a car loan at Banque Raiffeisen here.
Car loan at the car dealer
Another possibility is to make a loan at your car dealer. These beckon with attractive rates, sometimes even of 0%. At first glance, of course, this is a very attractive option. But is it really the best and cheapest way of financing? You should never forget: there is no such thing as a free credit. The interest that you do not pay for this loan will be borne by the car dealer. Conversely, this means that the car dealer will limit the term to keep its costs low. This will increase your monthly installments. In addition, this car dealer's concession may result in giving you less or no extras for free. So you should always evaluate the pros and cons in order to determine the option least expensive for you - no interest fees or free extras. Maybe you will find that the 0% loan is not necessarily the most financially interesting solution.