It’s difficult to consider buying a car as a cheap expense. It often requires investing quite a lot of financial funds. In order to fulfill a dream of having one’s own four wheels, the Clients often take credits. The most common is a car credit, specially dedicated to this purpose. It is quite likely that after analyzing available cash credits, it turns out that the latter is better.
Car credit is a special-purpose credit.
The money from this credit can only be spent for buying a car. It is because the car is the purpose of such an investition, it is its collateral. If the investor stopped paying the installments, bank could assert its claims to the car. Practically speaking, the car is not the property of the owner until the last installment is paid. This is how the Client gains preferential conditions of the credit – because of the car as the collateral, bank can offer lower interest rate as well as significantly lower commission.
The car credit is especially dedicated to those Clients who decide to buy a car from the showroom. It is because the car dealers often have profitable deals with banks. In order to encourage the Clients to buy a car in their showroom, they are able to offer significantly more attractive credit conditions. Moreover, while buying a car in this way, a driver can be given some additional offer. The most common refers to cheaper AC insurance policy. While taking a car credit in the showroom, one can expect a simplified credit procedure. The above-mentioned dealer may be of some help.
It is definitely more difficult to get a car credit if one wants to buy an old car. One can’t count on the dealer’s help simply because there are no old cars in the showrooms. The car credits are available rather in a car consignment. However, investors may face certain restrictions. The car may not be 10 years old when one pays the last installment. While taking a car credit, one also has to buy the additional AC insurance which is connected to a lot of formalities. Taking everything into account, wouldn’t a cash credit be more profitable?
Cash credit for buying a car
Contrary to car credit, the cash credit can be spent in many ways, not necessary for a car. One of the advantages is that there are less formalities. Also, the money can be spent for any car, regardless of its age and condition. When there is something left of the money after buying a car, we can spend them for other things. Car credit, on the other hand, is taken for a very specific car model. All in all, the cash credit can be spent for any purpose. Bank will take no interest in what kind of car one will buy. Also, buying AC insurance is not obligatory. As was indicated before, banks have this requirement while giving a car credit to their clients. It is always better to take bigger credit for buying the car, especially when it is a used one. Therefore, we will have some cash to spend for possible repairs, re-registering or buying an insurance.
Thus, car credit is a good solution when one wants to purchase a new vehicle from the showroom. While one wants to have bigger choice while deciding on a car, a cash credit will be a significantly better option. Of course, the potential costs have to be analyzed.