Is it difficult for you to purchase a new car? Fortunately, there are financing options that can come in handy for driving away from the car dealer with a good feeling. Buying an installment car is one of those options.
The disadvantage: if you can only pay a small amount each month, it can take a long time before you have paid off your car. By the time your car is fully paid off, it may be so old that you will not get it resold.
A popular alternative to payment is ‘private lease’ driving. You then drive a new car for a fixed amount per month, and if you are tired of the car, choose another.
Some car buying tips with payment
As soon as you do not have enough budget yourself, you can still decide to buy a car on payment. There are a few rules and a procedure attached to this. Not all car dealers are the same and they use various regulations.
First of all you have to remember that borrowing money also costs money. This rule also applies to the purchase of an installment car. Below are some car buying tips when you want to buy with installment:
- Make a household book and determine what you have left over each month
- Determine your maximum extra monthly costs
- Determine how long it takes before you can pay off
- Discuss your new purchase with friends and family
- Collect the necessary papers (recent payslip, driver’s license, proof of housing costs, etc.)
Once you have clarified the above issues, you can take the next step. Before you enter into a form of car financing, it is important that you are 100% sure that you will not have any financial problems in the near future. A negative BKR registration is far from welcome.
What are the payment costs?
Car dealers can have different payment arrangements. Buying a car on installment means that you will be reimbursed the total price of the car over a period of a few months.
An additional interest rate is added. The payment period depends on the price of the car and your monthly amount of money.
Do you want to buy a new or second-hand car by installment? Then assume an average repayment term of approximately 60 months. The interest rate is thus between 10-20%. The APR then comes to around 5%.
A test at the BKR in Tiel is often a formality here; You can also request this yourself.
Do you want no bkr check to be done? Then you will end up with the less controlled dealers. Remember that the BKR is there to protect you from getting into financial trouble.
If you have an old car that you can pledge, this is an alternative to getting extra money.
Buy cheap car on installment without interest or deposit
Do you want to buy a cheap car on installment without interest or down payment, and that for a maximum total amount of 15,000 euros? Nowadays that is possible at various dealers.
It is then usually the case that you have to repay the total price of the car in its entirety after 12 months. The car dealer will also ask you to include your current car as collateral in the contract. This way you can even get on the road without taking out a loan. Always read the terms and conditions of the contract.
In the unlikely event that you do not receive the full payment, your old car will be taken and sold to cover the car loan. As soon as you are 100% sure that you will have enough budget in house in 12 months to be able to pay off the car, it may be worthwhile taking out this loan form.
There are enough dealers who do not require an advance or other form of down payment through this construction. If the monthly costs are a bit too high for you, you can consider a second-hand car. Your local garage in the neighborhood can offer a solution here.
If you are in doubt about the structure of this financing, you can consider choosing a private lease occasion. You never become the owner of the car yourself and have little to worry about repair costs or other concerns. In this form you can also drive a new car more easily.
Add extra money
If you are just a few hundred euros short of buying a car, you can consider taking out a mini loan. These can go up to 1500 euros nowadays and close that gap.
This min loan has a short term, so it is crucial that you have an income within a few months with which you can pay off the min loan.
A common scenario is when you have already passed your monthly salary at the end of the month. You can then spend this form of consumer credit in the last week without getting caught up.