A loan with the vehicle registration document as security is primarily a classic car loan. When buying a vehicle, very few manage to raise the purchase amount only from the savings. You make a representative down payment and finance the rest as an installment loan.
The car dealer often helps with the financing. His offers of interest sound tempting and he does practically all the paperwork. Nevertheless, his offer is not always the cheapest. How it works better and how the vehicle registration document can be used, that’s what the following is about.
Credit with the vehicle letter from the dealer – it is not uncommon for the big end to come at the end
The loan with the vehicle registration document as security is mainly used when buying a car. In addition to beautiful cars, dealers often present a wide range of different financing options. At first glance, the offers seem unbeatably cheap. Especially with new cars, the car banks overturn with interest-free loan offers. Balloon loans are often offered. Your structure is simple. The buyer makes a down payment, usually it is at least 10 percent of the purchase price.
In addition, particularly favorable installments and low interest rates are offered for the first to one year. Even zero percent interest rate offers are not uncommon for the first 12 months. The final installment is due at the end of the contract. The saying “thick end” could not be used more appropriately. The closing rate often corresponds to the total residual value of the vehicle and is due in one sum. The down payment and the installments only corresponded to the real loss in value and are now used up.
Debt financing is the cheaper alternative
Anyone who enters the dealership as a cash payer in the present will get better offers – not just zero percent financing. Discounts on cash payments and free extras of around 20 percent of the purchase price can currently be negotiated. If you book the financing through the car dealership, you are giving away a large part of these discounts. The dealer is often asked to pay by the finance bank. It bears its share of the dumping interest. His interest in granting other benefits is correspondingly lower.
Anyone who studies the online bank offers for the loan with the vehicle registration document as security will be surprised. The interest rates are extremely cheap, financing terms, up to 84 months, ensure small installments until the end. The “big end” is waited for in vain. The calculator proves: In the overall balance, including additional possible discounts, the vehicle purchase is significantly cheaper.
Turn the interest rate screw through loan collateral
If the vehicle is paid for later, the Brief can still be used as security for other financing projects. Collateral through real assets is not only a way to lower interest rates when buying a vehicle. The loan with the vehicle registration document as security has a positive effect on many loan offers.