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What type of loan can you finance a car purchase?

You can buy a car with several types of loans. Ideally, if you have saved a car or have 100% of the funds you need to buy it. If you don’t have to buy a car, you can choose from the following options:

Car Loan

Car Loan

Car loans are offered by banks and non-bank companies. This is a special purpose loan type. As such, it has a lower interest rate than a non-purpose loan, ie a classic consumer loan. The car is the property you are repaying from the start. You also pay statutory and accident insurance as well as service fees yourself. Calculate not only the annual interest rate, but also the total cost of the loan so you know how much extra you will pay. Credit-funded car can be depreciated from taxes.

Consumer loan

Consumer loan

How to choose the right way to finance a new car? Calculate the total cost of each type of loan and see how much extra you pay. 

A non-purpose consumer credit, sometimes also called credit for anything, is also a way to finance a car purchase. But note that the interest rate will be higher in this case than for the special-purpose loan. A car is your property that you repay to a bank or a non-bank company. You pay the statutory and accident insurance as well as service fees yourself. You should also calculate the total cost of the loan, not just the annual interest rate, to know how much you will pay.

Leasing

Leasing

The basic principle of the lease is that it is the property of the leasing company throughout the repayment period, until full repayment. Leasing often involves payment for statutory and accident insurance. In the case of leasing, it is necessary to pay down payment, which is relatively low today and is at a maximum of 20%. Firms and self-employed persons can recognize lease payments as a tax deductible expense.

Operating lease

Operating lease

Operational leasing differs from conventional leasing in that the car will be the property of the leasing company for the entire period of its use and you will not pay the full price. You only pay the difference between the purchase price of the car and its price when you stop using it, ie when the contract ends. The advantage of operative leasing is that it includes payments for MTPL and accident insurance, service fees and more. Don’t worry about anything. You just pay and drive.

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