Only a few car buyers finance their new car from own funds. As a rule, a loan is used. The auto-financing is carried out as a installment loan, three-way financing or balloon financing. For all forms of financing, the bank sees the vehicle as collateral.
Cheap car loan through the bank
When comparing the offers, the car banks should be taken into account. VW, BMW or Mercedes are usually cheaper than a loan at the bank. But that only applies to high interest rates of normal banks. Otherwise, the cash payment can be realized through a separate bank loan and discounts are often possible with the car dealer.
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The three-way financing is realized by making the choice between purchase, further financing or return of the vehicle after the down payment and after the financing expires.
For balloon financing, the monthly installments are low and the down payment as well. For a high final rate is due. The installment financing makes sense if the vehicle is to be kept after expiration of the loan.
Comparison of the cheapest offers
Currently, the car loan of Barclays Bank is the best and cheapest alternative. Here, an effective annual interest rate of 2.79 percent is offered. Processing fees are not incurred.
The worst results in a recent comparison, the Santander Consumer Bank from. Here, an effective annual interest rate of 7.95 percent is used.
The annual percentage rate for these providers is currently between 4.29 and 5.95 percent. Processing fees are not incurred here.