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A car loan is often the only option when we dream of a new vehicle, but with scanty savings we cannot afford it. Is it worth using this form of financing? How can you tell which bank offers the best conditions? What can help us when we want to take out a car loan?
Not so long ago, most Poles could only dream of a new car straight from the showroom. Today the situation is completely different – more and more drivers are allowing themselves a new car, taking out a loan for it. Every year, thanks to this method, Poles buy about 1/4 million cars.
Car loan – an alternative way of financing
If you are among a huge group of people who need a new car but are held back on a budget – you might consider taking out a loan. Of course, you can get by by investing in a cheaper, older model or by buying the car on the secondary market.
Unfortunately, we risk an avalanche of additional expenses for constant repairs and new parts. We don’t really know what exactly we are buying, and it’s often a pig in a poke – especially when we decide to buy a second-hand car.
Currently, there are several forms of alternative financing for the purchase of completely new cars on the market – enough to replace leasing , traditional cash loans or a dedicated car loan .
There is no doubt that the multitude of options significantly increases the chances of buying a new and under warranty car. Before you decide to buy a specific car, take a moment to familiarize yourself with the various financing methods. First things first – did you know that some of them are offered directly by dealers?
Car loan – at a bank or at a dealer?
At the bank, you can take out a traditional cash loan or a specialized car loan . It differs in that you have to indicate the precise purpose for which you borrow funds, and even specify a specific model that the bank will most likely treat as a loan collateral.
It may be that until repayment, the financial institution will co-own your car. Sometimes the assignment of rights under the AC policy will serve as collateral.
Why is a car loan profitable?
Banks are then quite flexible when it comes to setting the repayment schedule, and also offer a fairly low interest rate. The second option is the car loan straight from the dealer. Some car concerns have their own financial institutions that deal with this. Such a loan is a very convenient option – dealers have their own contracts with financial institutions, and they offer very personalized loan terms.
With minimal formalities and simplified procedures, you can buy your dream model or one of the proposals of your favorite brand. It is worth adding that some dealers also offer one-year loans without interest, which allow you to break the price of the car into two equal parts.
The biggest advantage of buying a car on credit from a dealer is that it speeds up and significantly simplifies the entire process. So – a car loan at a bank or at a dealer? You have to answer this question for yourself. It all depends on whether you want speed or on more favorable terms (usually a specialized loan at a bank turns out to be the cheapest solution).
