worth mentioning that banks often develop auto lending programs together with car dealers — because both parties are interested in sales, and therefore create offers, to meet the needs of potential buyers as much as possible.
Features of car loans
You can get a loan for the car in two ways — pushing back from the desired model of the car, or focusing on the favorable offer of the bank. In the first case, the credit is easiest to issue directly at the auto show, and often it is there that are offered quite popular now express credits, which require a minimum of time and documents. As a rule, only a passport and driver’s license is enough for such credit — and the car is yours. However, such ease of receipt has its own cons – a less favorable interest rate – for example, 2% higher than the usual offers issued in the bank.
For the purchase of domestic cars, the state offers subsidies and compensates 2/3 of the refinancing rate (approximately 5.3%). So instead of the usual rate of 12 -15% you can save and overpay just 8 -13%.
Any auto loan (aside from principal and interest) includes several more important expenses:
– Account opening fee (single or lifetime of service) – Multiple types Insurance (mainly CASCO + life insurance) – Installation of the alarm on the purchased car –
Registration of the car in traffic police department your bank manager, as depending on the conditions and methods of obtaining additional expenses may vary.
Processing process and required documents
The terms for which banks issue a loan varies from year to 7 years, and the interest rate depends directly on this. However, some banks specifically hold the interest rate regardless of maturity, which immediately makes them attractive to customers.
You can get a loan both in cash and immediately by transfer to the car dealer’s account.
However, banks often make their demands on lendable cars, and that needs to be taken into account, too. Someone does not provide loans for the purchase of used cars, others ignore the Russian car industry.
Most important for the bank, as always, the financial viability of the client and its reliability. Among the mandatory documents are a passport and a driver’s license, but many credit organizations offering better terms are more serious about checking potential customers, requiring more 2NDFL certificate (sometimes a copy of the work book), a certificate of income, a copy of the agreement with the car dealership and an invoice for the car.
In addition to financial documents, banks also pay attention to driver’s licenses. For example, a bank can refuse a newbie customer without driving experience who wants to buy a very expensive car.
features of insurance
car bought on credit is your money-back pledge to the bank, so the most important point in getting a car loan is insurance. As a rule, banks put stringent insurance requirements and the life of the borrower, and the car itself for the duration of the loan. This is done to ensure that in the case of insurance (car theft, accident with non-recoverable damage) both the bank and the consumer have guarantees.
In an insurance case, the insurance company transfers money to the bank, and only after that the loan is considered repaid. As long as the insurance has not covered the loan, the customer must pay the money in full.
There are two types of insurance: CASCO and OSAGO. OSAGO is Compulsory Motor Liability Insurance, which covers only a number of insurance cases, but is largely unreliable for beginners.
CASCO is insurance against any accidents, including theft. CASCO is considered the ideal insurance for those who don’t want any problems, so it costs more – up to 10% of the full cost of the car. Most banks require registration of this insurance, but there are also a small number of those who have enough OSAGO. It is important to take into account that such banks require a large amount of down payment — usually from 30% of the price of the machine.
Car credit is perhaps one of the most justified types of lending, because the machine is an expensive and sometimes unlifting purchase, but often really necessary. If you have properly dealt with the conditions of the bank and the nuances of payments and insurance, the machine will not become you a burden, but will only justify its benefit to the joy of you and your family.