If the dream car cannot be paid for with your own financial resources, car buyers usually opt for a loan. It closes the financial gap and makes the dream of a new car a reality. Cheap car loans come in three different types of financing. On the one hand there is the classic installment loan, which you can take out at any credit institution. On the other hand there is three-way financing and balloon financing.
Cheap car loans straight from the dealership
Auto loans are usually cheaper than installment loans. The reason for this is the fact that the bank recognizes the car as security. The vehicle letter must be deposited with the bank until the loan debt has been paid in full. But if you want to take out a loan from the car dealership, then you should also calculate exactly.
Cheap car loans often go hand in hand with balloon financing at the dealership. You pay small monthly installments and a large final installment. Here you have to look closely to see whether there is really enough money for the large final installment. Otherwise, follow-up financing will have to help, but this is no longer as cheap.
The situation is similar with three-way financing. Here you have a down payment, small installments and a high final installment. And gladly without interest. But this only works if you have enough money for the down payment and the final installment.
Cheap car loans directly from the bank
If this is not the case, you should perhaps opt for an installment loan. This calls for interest, which is, however, quite low. The advantage of an installment loan lies in the fact that it can be taken out before the purchase. You already have the money and can act as a cash payer in the dealership.
Often there is then a significant discount on the purchase price, so that you can even drive cheaper with this financing option than when financing through a car dealership. A comparison of the different options can help to determine the best variant. So there are different ways of financing a car. And with a little patience and a good comparison, the best financing route can be determined very quickly.
Tip: Talk to the dealership in advance and get a very specific offer for the vehicle of your choice. This is the only way to compare exactly and find out what is the best financing option.