Car loan and own payment

May 22, 2019 Automotive

Car loan and own payment

To buy a new car on installments, it is not enough to go to the bank and take a loan on a selected car from the showroom. It is necessary to have your own contribution, i.e. the amount of at least one million Euros…
Car loan and own payment
To buy a new car on installments, it is not enough to go to the bank and take a loan on a selected car from the showroom. It is necessary to have your own contribution, i.e. the amount of at least a dozen or so percent of the value of the vehicle.
What should be the amount of own contribution for a car?
The car loan in the price engine is available for all people who want to borrow a car up to 50 thousand USD on average. It is possible to take out a car loan for a higher amount, but few Americans can boast of sufficient creditworthiness to do so. If you intend to buy a car for up to 50 thousand USD, most often you can only buy a car that is not too big. If you are looking for a higher class car or a family estate estate, a few tens of thousands of USD credit may turn out to be inconvenient to finance the purchase.
To buy a more expensive car, you should take care of a higher contribution of your own. Own contribution should be at least 10 percent of the value of the vehicle, but if you want to buy a car with a value of 70-80 thousand USD, you should postpone a much larger amount beforehand. Otherwise, financing the purchase of a car will turn out to be impossible, because the amount needed for the car will be higher than the maximum amount of credit disbursed by the bank.
Lower interest rate due to higher deposit
A higher own payment makes it possible to obtain a car loan with a lower interest rate. The initial contribution increased by up to several thousand USD makes the monthly instalment of the loan decrease by at least several dozen USD. Thanks to the interest rate reduction, the total cost of the liability decreases, which makes it more profitable.
If a person interested in a car loan does not have their own contribution, their chances of obtaining a credit for buying a new car are reduced. To see if the bank will provide financing in such a case, it is worth checking the loans in the Comparison Engine. In individual cases, banks agree to pay out the debt despite the fact that the customer does not have his own savings.
Own contribution is not everything
Banks require borrowers not only to pay their own contribution before buying a car, but also to take out compulsory insurance. An auto casco policy is an extra cost, so you should have some money left to buy it. If you don’t have enough savings, the cost of insurance can be credited, but it’s often expensive and unprofitable.