Car loan with down payment and final installment

When it comes to purchasing a new car, many car buyers are concerned with financing the vehicle. Either the necessary financial means for the vehicle purchase are not available or one simply does not want to attack existing savings for the purchase of a vehicle. The car loan with down payment and final installment is a special type of car financing that keeps the current burden of loans very low.

How does this funding work?

How does this funding work?

The car loan with down payment and final installment provides that car financing is basically split into three parts. On the one hand, you make a down payment with this form of financing, which can reduce the subsequent loan amount individually. The remaining loan amount is then divided into monthly installments and a final installment.

This loan is particularly recommended if, on the one hand, sufficient funds are available for the down payment and, on the other hand, the current installments should be low.

Due to the down payment and the payment of a final installment, the loan amount, and thus the installments, are significantly reduced compared to full financing. The monthly charges for the installments are relatively low for car loans with down payments and final installments.

How is the final installment financing going?

How is the final installment financing going?

If the car loan has been concluded with a down payment and a final installment regarding the installment payments, the car buyer has various options for financing the final installment. One variant is to pay the final installment in one sum, for example if savings contracts expire or other special payments of a larger size are due. The vehicle can also be sold in order to pay the final installment with the sales proceeds.

However, one should plan for possible losses in value due to signs of use or possible accidents as early as in the course of the financing. A used vehicle does not always achieve the desired sales price. Ultimately, the final installment can also be paid through follow-up financing. In this case, you should pay attention to favorable credit terms.

Who is this type of financing suitable for?

Who is this type of financing suitable for?

Whenever sufficient funds are available for a down payment of a vehicle, but these are not sufficient for the purchase of a used car or simply a higher-value vehicle is to be purchased, the car loan with down payment and final installment is well suited. The down payment and final installment also keep the cost of the financing loan low, because the lower the loan requirement, the cheaper the price. The final installment remains flexible and if the financial means for the final installment are not sufficient in one sum, there are still alternatives of the sale or follow-up financing.

However, with this form of financing it is important to have a good comparison of the conditions of different providers. The dealership or the cooperating financing bank of the dealership should not be considered as the only contractual partner. An optimal loan can only be achieved with a good comparison.

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