A car loan is a realistic scenario for most consumers. Because hardly anyone is able to buy a vehicle, especially a new vehicle, without a loan. The question must therefore be clarified whether the car loan can be found on the Internet or whether a car loan is taken out through a dealer.
Find car loan on the Internet or finance it through the dealer?
As a borrower, you can use two different options for financing a car. It is possible to find a car loan on the internet that entitles the borrower to appear as a cash payer to the car dealer. This has the advantage that a so-called cash discount can be granted by the dealer, which presents itself as an additional price reduction and thus has a positive effect on the purchase price for the car.
In addition, you have the option of taking out the car loan through the dealer. That sounds easy at first because the dealer handles the loan. But it also has the disadvantage that on the one hand no cash discount is possible and on the other hand the dealer only has this one loan offer ready. It is therefore always recommended to find the car loan on the Internet and use it there.
We would like to explain in more detail why this variant is better.
Advantages of car loan on the Internet
The cash discount is a great advantage that shows when the car is financed over the Internet. The seller of the vehicle, usually a dealer or a private seller, gets his money directly and does not have to hope that financing will be found that ultimately fits and that can be accepted by the borrower. Because the car buyer takes care of the financing himself and provides the seller with the money for the purchase directly.
While there is generally no cash discount when buying a car privately, it is completely normal for the dealer to offer a cash discount when buying a car through a car dealership or a commercial dealer. This cash discount is intended to be an incentive to pay for the vehicle directly. The dealer is in a positive situation for him when it comes to financing in the form of a loan. But something can always go wrong with the financing via the loan, which then also has a negative effect on the dealer.
Another advantage of finding a car loan on the internet is that the borrower is free to choose which form of loan to use. There are many different auto loans that are offered by a wide variety of banks, savings banks, Volksbanken and Raiffeisenbanken. Even private financing of the car via the Internet is possible. And in certain circumstances, even funding for a bad Schufa.
The large selection of offers gives the borrower the opportunity to fulfill his or her loan request in the way that suits him best. Not only does he have to use one of the dealers' offers, he can freely decide which offer to use. When choosing the right loan, it makes sense to use a comparison calculator to make a relatively quick decision regarding the right loan offer.
What is the difference between a car loan and a normal installment loan?
When buying a car, it is always advisable to use financing that has a fixed earmarking. In this case it would be the classic car loan. In contrast to the normal installment loan, the car loan has the advantage that the banks provide relatively low interest rates with this type of loan. The risk is lower compared to a normal installment loan for the bank. It has the vehicle as security and can therefore also offer lower interest rates.
A similar scenario can be seen with real estate financing. These also generally have significantly lower interest rates than is the case with an installment loan. The reason for this is the purpose limitation and the fact that the bank has the property as security.
In the case of a car loan, however, it is imperative that part of the vehicle letter is deposited with the bank. And that over the entire term of the financing. This is necessary in order to be able to ensure that the vehicle is not sold during the financing through the car loan. Because only then is there security during the entire repayment phase and only then can the bank also offer the favorable interest rates.
When finding a car loan on the Internet, it must therefore be ensured that a special purpose-built car loan is really used and not a classic installment loan.
Why is it better to find car loan online?
There are more than 2.000 banks in Germany that offer a wide variety of financing options. Most of these banks also have a special car loan. The large selection of loans guarantees attractive offers. Direct banks in particular can score. The offers there are usually much more attractive than the banks that can be found on site. Because the offer on site is more limited than on the Internet and of course not as diverse.
The direct banks can only be found on the Internet, have no branches on site and can therefore offer significantly better conditions for the loan. Direct banks have lower costs within their bank and are happy to pass this savings on to customers. The interest rate differentials that can be achieved here are often around 2%. With a car loan that may have a volume of 30.000 euros or more, 2% is crucial. In the end, it is several hundred or even a thousand euros, which can be saved with a cheaper interest rate.
A systematic approach is required to find a suitable car loan on the Internet. The first thing to do is to check your own financial situation and see whether it is currently possible to borrow. A good credit rating must be available for this. Even if the car is safety, that's not enough. A decent income and a good Schufa should also be available.
In many cases, a surety is also requested. In this regard, too, preliminary preparations can be made in advance so that the borrowing is not unnecessarily extended. It is also necessary to check how much credit can be taken out. This is important in order to be able to choose the right car.
After the preliminary work, the car can be selected at the dealer. The question of the cash payer discount is important in order to be able to take this directly into account when financing. If a suitable car was found, the loan search can start.
A comparison calculator helps with the search. With it, suitable offers can be determined within a very short time, which fit the personal requirements and wishes. Once the loan has been found, it can be applied for online. Most of the time, it only takes a few days so that the purchase contract for the car can be signed quickly.
By the way: The part of the vehicle letter that must be deposited for the earmarked car loan can be submitted later. It is not necessary to submit this part directly with the application. Because normally you only get the vehicle letter when the vehicle is handed over and not when the contract is signed.
Financing a car with a car loan over the Internet is not only easy, but also cheap and fast. The range of suitable loans is very large on the Internet and should offer something suitable for everyone. With a comparison calculator, the offer can be restricted so that it exactly matches the wishes of the borrower.