When it comes to buying a car, many people will encounter similar confusion. Should I buy a car with full payment or buy a car with a loan? Which way is more suitable for you if you take a loan to buy a car? How should we reasonably arrange a car loan?
Full payment or loan to buy a car
At present, the car loan interest rates in the auto market are maintained at an annual interest rate of 6%-10%, which is much higher than that of home purchase loans and provident fund loans. Although the interest rate of car loan is higher, it has the following advantages:
Taking a loan to buy a car can reduce losses due to inflation. In recent years, domestic prices have continued to rise, and the currency has depreciated more seriously. If you use a loan to buy a car, this part of the loss can be borne by financial institutions.
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Cars are consumer goods, and taking a loan to buy a car can reduce losses due to depreciation. A new car is not a house and lacks investment properties.
As a consumer product, the depreciation rate of a car is about 20% for one year. The longer the time, the greater the depreciation rate.
If you pay 150,000 yuan to buy a car at one time, you will only have 70,000 yuan left after three years. So it’s better to owe the bank first and use the funds to invest to make money.
Buying a car with a loan will not affect your cash flow. It costs a lot of money to buy a car. Paying it off at one time may affect your liquidity, which means that you may not have enough money to buy other things for a period of time. I need something.
However, since there is no loan interest and there are discounts when purchasing a full car, the overall cost of purchasing a car is lower, and it also has certain advantages:
The full car purchase will enjoy a car purchase discount, the discount range is generally 20,000-50,000 yuan, depending on the total price of the car.
In general, higher-priced cars have higher total discounts, and lower-priced cars have lower discounts. This part of the concession, the loan to buy a car is often not available.
There are more optional models for full car purchases. As long as you are within the budget, you can freely choose the model and configuration, while the choice of car model is generally limited to a loan to buy a car.
The full purchase of the car has the right to dispose of it freely, and the car can be sold at any time and exchanged for cash.
As for car loan, because the vehicle is mortgaged in the financial institution of the loan as collateral, it is necessary to pay off the car loan in advance when the car is sold to release the mortgage.
The full-payment car purchase will not be required to have additional harsh terms. The car loan purchase may require a one-time payment of full insurance and other insurance for the corresponding number of years according to your loan period.
Therefore, it is more appropriate to buy a car in full for the ability to pay in full, without a large capital demand within 1 to 2 years, and without a suitable investment and financial tool that yields higher returns than car loan interest and costs. Instead, you can choose to take out a loan to buy a car.
How to get car loan {Video}
How to choose a loan method
When you decide to buy a car with a loan, how to choose a suitable one among the dazzling car loan products and financial institutions that provide car loan services, you must first understand the loan method of car loan.
Bank car loan:
- Applying for a loan from a bank is the most traditional way to buy a car with a loan, and the loan term is up to 5 years.
- If you buy a car for your own use, you can apply for a loan of up to 80% of the car price. If it is commercial, only 70% of the price of the car purchased can be loaned.
- The loan interest rate will fluctuate up and down on the basis of the current benchmark loan interest rate announced by the People’s Bank of.
- Compared with other loan methods, the interest rate of bank auto loans is low, but the process of applying for a loan takes more time and effort.
- In order to control risks, banks usually take a long time to review and require you to submit a lot of information.
Car purchase by credit card installments:
- The auto finance service provided by the credit card issuing bank and the auto company.
- Depending on the product, the loan amount ranges from tens of thousands to hundreds of thousands of yuan, which can be repaid in 12, 18, and 24 installments.
- There is no interest, only a handling fee of 3.5%-10% of the installment amount is charged, and some promotional products even waive the handling fee.
- The down payment is generally greater than or equal to 30%-40% of the car price. Buying a car in installments with a credit card is easier to operate than a bank car loan.
- As long as you have good credit and stable income, there are generally no restrictions on household registration and property, and some banks can complete the approval within a few hours.
- But the biggest problem with credit card installment is that it will be limited by the loan amount.
Auto finance company loan:
- Applying for a car loan through an auto finance company is a common way in recent years. A number of auto finance companies have been established in India to provide car loan services, such as SAIC-GM, Chuangfu, Volkswagen, Ford, Toyota, Dyke and Hyundai.
- Usually, this kind of loan has the characteristics of low threshold, low down payment ratio, long loan time, flexible approval and fast speed.
- The minimum down payment for car purchase is 20%, and the loan term is 1 to 5 years. The loan repayment method of auto finance companies is more flexible.
- You can choose to use a part of the loan amount (usually no more than 25%) as a flexible balance payment, and make a one-time payment in the last month of the loan period without calculating the monthly payment amount.
- Can make your monthly payment significantly lower than that of traditional credit. When the contract expires, you also have a variety of options. settle the flexible balance in one go and get full ownership of the car; or apply for a 12-month secondary loan for the flexible balance; or with the assistance of the dealer.
- When a used car is replaced with a new one, the balance will be deducted from the discount of the old car.
Internet car loan:
- In recent years, Internet car loan has emerged along with the tide of Internet finance. Loan issuers are mainly Internet companies, which are faster and flexible in terms of loan methods.
- You can complete the various steps of the loan without leaving home, including understanding the application conditions of various types of loans, preparing application materials, and submitting loan applications, all can be completed efficiently on the Internet.
- The loan method is mainly based on credit unsecured loans, similar to credit card installment loans, but the loan interest rate is higher than that of banks.
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Conclusion
We’ve explained how to get a car loan in this article. If you find this post useful, please share it with your friends and family.