Loan for a new car – Is it worth it?

If you are about to buy a vehicle and are wondering if car financing is worth it or not, in this article you will find answers to some of the most frequently asked questions about this topic.

Financing the purchase of a car is becoming an increasingly sought-after alternative. The range of proposals available from dealers, car dealers, and credit institutions is very varied and the car manufacturers themselves advertise their cars, proposing different solutions: payment in installments, long-term rental.

But what is the reason for this broadcast and, especially, is car financing convenient or not? Also, what are the advantages of car leasing?

Is It Worth Applying For A Car Loan?

Given the number of Italians who, in recent years, due to the economic crisis and the difficulty of finding a permanent employment contract, have resorted to credit institutions, banks, and financial institutions to obtain loans of various kinds and for goods of most diversified, certainly increased. Also, don’t forget to check the honest loans review before making a decision.

If the acquisition of a property is at the top of the ranking, even the car and motorcycle sector undoubtedly plays an important role, given that, in principle, 80% of buyers choose to defer payment for the car, resorting to a loan, while only 20% are willing to pay the full amount at this time.

Car financing: when is a good choice?

In general, it is convenient to use a used car loan:

  • when liquidity is currently limited;
  • when you don’t want to affect the available family budget too much;
  • the loan is offered together with a series of discounts at the list price or with optional included.

These are just some of how a car loan might be convenient, but of course, it all depends on the specific condition of the lender as well as the type of product requested and the lender’s policy.

What are the disadvantages?

If the loan solves the liquidity problem and eases the bill to be paid at the time of purchase, it must be said that these advantages bring with them some economic implications to consider.

As with any type of loan, even if the amount of installments is initially lower, in time you will find that you pay for your car, much more than the list price.

Also, remember that if at any time you have the liquidity to pay off your debt, you will be required to pay a penalty, which varies depending on the terms of the contract. Before you commit to a car loan, therefore, carefully evaluate the computer in hand, if it is really for you.

Zero rate car loan

In itself, the promise of an interest-free loan seems attractive, but finding such an opportunity can be a daunting task.

Buying a car without a starting budget available, and hoping for a zero-interest loan, may seem like too much, even if some ads on the web attract attention, without a shadow of a doubt, trying to get us at the dealership to close a deal.

There are many banks, but also car dealers who advertise the purchase of new models, with the formula of a truly sensational loan/financing: without interest, you pay only the amount of the desired car.

Leaving aside the skepticism, one wonders where the problem is, given that both the bank and the dealer would gain nothing. It is better to consider the hypothesis of buying a car with promotional financing: to find a total elimination of interest is pure utopia.