Would you like to take out a loan with the vehicle as security? To buy a vehicle? As a dealer loan or financed by a third party? Or do you need a free installment loan, but personal creditworthiness causes problems?
With information “around vehicle loans” we would like to lead you on the track of the individually fitting loan.
Find out why the supposedly cheap dealer credit for buying a vehicle often turns out to be a “bad package”. In addition, how your paid vehicle gives you additional creditworthiness for lending. Finally, who accepts the Kfz letter for credit protection despite poor creditworthiness.
Credit with vehicle as security – vehicle purchase
By far the most common loan with the vehicle as security is taken up to purchase a vehicle. An independent study shows that almost half of all vehicles (new and used) are financed with the purchase. About 28 percent of all buyers of used vehicles use installment credit from the car dealership, and as much as 38 percent for new private vehicles. Overall, credit institutions granted every fourth installment loan against the background of vehicle financing.
Without trying to make any more figures, the trend of whom borrowers take out their car loans is particularly interesting. Debt financing for vehicle purchases has increased significantly. Although neither direct banks nor house banks offer interest-free loans, more and more car buyers are realizing the real savings potential. It is the cash payment discount of around 20 percent and not the interest-free financing offer.
Financing the loan with the vehicle as security to purchase the vehicle is worthwhile for the car dealer and the vehicle buyer. Instead of subsidizing interest rates, car dealerships prefer to give a higher discount. The reason for this is very simple. The car is from the yard. The dealership no longer has anything to do with any problems, including vehicle retrieval. The car buyer can also find the desired loan model from external loan providers.
Auto leveraged car – loan models
The classic installment loan, constant installments until the loan is repaid, is still the favorite of German drivers. The installment loan with constant installments is the standard loan, especially for used vehicles that are financed on an average of 50 months. Every borrower knows this loan offer from the house bank and loan comparisons on the Internet.
Nevertheless, classic installment credit is not everything that direct banks have to offer. Even if it is only a very small percentage, almost 2 percent of all drivers lease their vehicles privately. However, the leasing contract from an external financier does not result in any significant price reductions when buying a vehicle. It is different if vehicle buyers want to finance with small current rates and a high balloon rate.
The three-way financing (refinancing of the balloon rate and vehicle return guaranteed at a fixed price) is only offered by car dealers. But if you don’t want to return your car, you could alternatively use two-way financing from a direct bank. In this case, the amount of the first payment phase would be reduced by the balloon rate. Follow-up financing of the balloon rate would also be guaranteed.
Credit with the Kfz-Brief – quick liquidity for the self-employed
Obtaining a loan is not easy for borrowers in certain professions. Especially the self-employed in the early years have a hard time realizing liquid funds, for example to pay for the purchase of goods. The well-known problem has led pawn shops to a special loan offer in larger cities. Large pawnbrokers allow quick credit with vehicle as collateral.
The procedure is just as simple as the well-known pledge with small valuables. In contrast, only the loan amounts are significantly higher. The offer for typical summer vehicles is particularly popular. Instead of spending the winter in their own hall, the vehicle is safely parked in the pawnshop. You can work with the money. The often long journeys are disadvantageous, since the car loan from the pawnshop is only offered in large cities.
Private Lenders – Real Loan Loans
Another loan option with the vehicle as collateral is offered by loan brokerage portals for private loans. The loan with Kfz-Brief is accessible to both private borrowers, the self-employed and freelancers as security. Serious contacts could be Best Lender and Good Finance for the vehicle letter deposit. Both loan brokerage portals have a very good reputation.
The procedure to take out a loan with the vehicle as security from a private person is very simple. An official valuation agency determines the value of the vehicle. For example at DAT, the required valuation report costs around 150 – 200 USD. The real, current sales value of the vehicle and the loan value are thus fixed. The report is sent to the portal together with a transfer of ownership by way of security and the vehicle letter by letter.
The portal then unlocks an additional certificate. The certificate states that the sum stated in the valuation report secures the loan in real terms. It is advisable to take out credit with the vehicle as security, especially if creditworthiness problems warn investors to be cautious. Secured credit not only offers more lenders, but at the same time, credit protection also has a positive impact on interest rates.
The external financing of car purchases is becoming more and more popular. In this case, the car buyer does not save on the financing costs. Savings are made due to the noticeably higher negotiating room for shopping discounts for cash payers.
Taking out credit with the vehicle as security is nevertheless not a special offer for vehicle buyers. If the creditworthiness is weaker, the real credit protection via the Kfz letter can fulfill credit requests that go beyond personal credit rating limits.