The pros and cons of buying a new car on credit is a very important topic for the future buyer. Coming big deal, which will have to be paid for over the next few years, so you should evaluate your financial opportunities and prospects for the future. Car loans are offered by dozens of banks, so their conditions vary, but in general, such programs have long stood out in separate species loans. What are the pros and cons of buying a car on credit?

Features of car lending as a banking service

A car loan is a targeted consumer loan that is issued for the purchase of a new or used car in a dealership or from private sellers. It may be offered at a bank or car dealership that maintains a partnership with a lending institution.

To receive such a loan, the client must pay part of the amount for the car and confirm his solvency to the bank. How profitable would such a deal be? The main pros and cons of a new car on credit:

• All the pros and cons of buying a new car on credit are covered by the opportunity not to wait many months until the amount needed to receive a loan accumulates, but to immediately go and buy the car you like. Banks help save a lot of time, and for many families, car loans remain the only option for purchasing a new car. Even an initial fee today is not mandatory: a number of banks are ready to provide loans without an advance payment.

• Important pros and cons of a car loan relate to interest rates: this type lending refers to secured loans, since the purchased car turns into mortgaged property. Because of this, car loan rates are lower than for regular consumer programs: for example, at Sberbank, car loans can be issued at 13.5%, and consumer loans at 18%. IN commercial banks this gap may be larger.

On the other hand, this partly reduces the owner’s freedom: until the end of the payment period, the car cannot be resold or exchanged; the title must remain in storage at the bank. Some organizations require compliance with service rules; CASCO insurance is required almost everywhere. The pros and cons of buying a new car in this case compensate for each other, and the owner still faces additional costs.

• Important pros and cons of buying a new car on credit relate to the loan process itself. To receive a large sum to purchase a car, the borrower will have to collect income certificates and documents confirming registration and employment. The more documents confirming your trustworthiness you can submit, the greater the likelihood of receiving a positive answer. This is not very convenient for the borrower, but compliance with all requirements leads to lower rates.
• The pros and cons of buying a car on credit also relate to the terms of the loan. Most often, a car loan is a long-term loan, for example, in Sberbank the amount is provided for 5 years, and in VTB24 - for 6. On the one hand, this is an opportunity to reduce monthly fee and make credit more accessible to clients; on the other hand, obtaining a long-term loan leads to significant overpayment. True, because long term it may seem unnoticeable, because the money will have to be spent gradually.
• A car loan for used cars, the pros and cons of which can take a long time to list, also has its own characteristics. The age of cars is limited: even foreign cars should not be older than 10 years, and for domestic cars the period is even shorter. It is recommended to buy them only in showrooms; most banks do not allow lending for transactions with private sellers. A used car has to be insured under CASCO insurance, which also leads to significant expenses.

Thus, if you consider a car loan from all sides, you can find very significant pros and cons. However a large number of of loans of this type indicates that such loan programs work quite effectively and are in demand.

Buying a car on credit has its pros and cons, but in any case it remains an effective tool for financial assistance. Until recently, Russia even had a program of preferential car loans, which was additionally financed by the state.

Different types of car loans: advantages and disadvantages

Today there are several options for purchasing a car on credit: the pros and cons of specific programs can be assessed directly at banks and car dealerships. Borrowers are offered the following options:

1. Express car loan: pros and cons are based on the fact that you do not need to submit documents on solvency, and the application is processed very quickly. The main disadvantage is the high interest rate, but such loans can save the borrower’s time.
2. Loans without a down payment are another opportunity to buy a car on credit: the borrower can evaluate the pros and cons himself. There is no need to save money before going to the salon; you can get by with minimal one-time expenses. However, in return you will have to pay more interest, and the loan term may be shortened.
3. There is also a riskier solution - a loan without CASCO insurance. The car is also collateral, but the borrower bears full responsibility for it in the event of an accident. If the car gets into an accident due to the fault of the driver, you will have to repair it at your own expense and continue to repay the loan; in addition, the bank may require you to pay off the loan ahead of schedule.

Is it worth buying a car on credit? The borrower should evaluate the pros and cons of such a decision long before going to the bank. Only after this can the conditions offered by the credit programs, and apply for loans. Right choice loan will allow you to quickly and without problems pay it off, receiving full ownership new car.

“Use now, pay later” is the slogan of many credit companies rushing to “make their clients happy.” But are such offers as profitable as they seem at first glance?

Owning a car ceased to be a luxury more than a decade ago. And lending played a huge role in this.

About 40% of cars in Russia are purchased on credit, and the prospects for this service are incredible: in Europe today 60% of cars are already purchased in installments, and in America the figures have exceeded 80%.

But, upon crossing the threshold of a car dealership, everyone is faced with a huge number of impressive offers: a loan without a down payment, assignment of a car loan, consumer lending...

Imagining myself behind the wheel new car, we rarely think about the fact that buying it on credit will be about a third more expensive than paying in cash. What other pitfalls of a car loan are hidden behind the “sweet” promises of lenders?

When making a purchase on credit, the client and the bank enter into several agreements at once: a purchase and sale agreement with a car dealership, an insurance agreement with an insurance company, a pledge of a car and, in fact, a loan agreement.

Naturally, there is a lot of information that is worth familiarizing yourself with. And the main nuances are usually indicated in incredibly small print.

The most controversial features of a car loan arise when applying for an interest-free loan. In this case, the bank charges a fabulous amount for insurance, most of which is the income of the lender.

Never rush to apply for a loan: once you receive copies of documents in your hands, take a few days to familiarize yourself with them. Re-read the entire text at least three times before signing the contract.

Often important points are hidden between 5-10 formalities: this is done on purpose so as not to focus the client’s attention. It is best if a knowledgeable lawyer comes to help you obtain a loan.

This is how the psyche works: when it seems that the product is already in hand, one is ready to make any concessions in order to become its sole owner. This is a simple technique that lenders use.

Car dealerships inform you about the pitfalls of a car loan after you have decided on the model, prepared the documents and are already mentally “starting your own swallow”.

So, why they will 100% charge you a pretty penny:

• commission when opening an account (standard from 5 thousand rubles);
• interest for maintaining an account (up to 0.5% monthly);
• fine for early repayment(up to 2% of the amount);
• penalties for late payments (from 5%);
• fixed fee for insurance.

How to avoid getting hooked

You can really benefit from lending! In order to circumvent the disadvantages of a car loan and have minimal damage, you need to adhere to several rules.

There are probably few people in the world who would not want to have their own car, so as not to depend on anyone and to feel the full freedom of their movement. Despite the fact that almost no one will be surprised by the presence of a car, nevertheless, not everyone manages to buy it right away and not always.

Therefore, many who want to purchase a used or new car face the problem of choosing what better loan or car loan? To make such a decision, you need to understand the main pros and cons of providing these types of lending.

Is it better to have a loan or a car loan: the pros and cons of a car loan

A car loan is targeted loan for the purchase of a car, in which the purchased car acts as collateral for the loan. From one point of view, secured loans are considered the safest for the bank’s internal risks, which can certainly influence the reduction of interest rates on them, compared to simple loans. Car loans are provided on average at 12-13% per year.

If you look at this situation from the other side, then everyone understands that the borrower cannot in full dispose of this car until the total payment is made credit debt organization that is the mortgagee in such a situation. When applying for car loans, there are much fewer requirements for the package of documents provided by the borrower than, for example, with consumer lending.

Upon closer examination of the issue: ? - it is necessary to take into account that the main disadvantage of a car loan is the requirement to obtain CASCO insurance, the amount of which can be 7-12% of the cost of the purchased car. It is necessary to insure it every year until the loan debt is fully repaid. In general, if you consider only the cost of the loan, then a car loan will cost more than consumer loan. But, at the same time, the borrower purchases a fully insured car, which is also important, especially when it has not yet been paid off. In our market you can also find a car loan that has no interest.

Is it better to have a loan or a car loan: the pros and cons of a loan

You can also receive money through programs consumer lending. This type of loan is a type of unsecured loan, which can be secured by a third party guarantee. Receive today credit funds on average, it is possible in the range of 18-22% per annum. In case of registration consumer loans The requirements for the package of documents provided by the borrower are more stringent than for car loans.

The advantage of a consumer loan is the ability to spend money at your own discretion. Easier to complete registration non-targeted loan cash, especially if the consumer wants to purchase a car from a private person or on the market. This is easier due to the fact that the terms of a car loan may have restrictions on the choice of a future car using certain requirements: the age of the car, its type, technical condition and etc.

Better loan or car loan: conclusions

Drawing final conclusions about Which is better: a loan or a car loan?, you need to understand that when purchasing an inexpensive, used car that costs about 150,000 rubles, it is easier and simpler to get a consumer loan. In this case there is no need to make compulsory insurance CASCO, and there is an opportunity to independently manage the funds received when choosing a car and its full possession immediately at the time of purchase.

When purchasing a car that costs more than 250,000 rubles, it is more profitable to apply for a car loan and pay for CASCO than to receive a consumer loan that costs several percent less. No one knows what can happen to the car during the loan period, but obligations to repay the loan debt still remain and must be fulfilled.

All or at least, many people want to have a car. This desire is spurred on by the neighbor’s purchase of a brand new foreign car. Seeing this makes me want to go to a car dealership. But there is nothing to do there without money. Where can I get them? Here the thought of a loan involuntarily comes to mind.

Of course, there is another option - to save money and fulfill your dream. But sometimes it is very difficult to save a large sum, and you want to buy the car you want as soon as possible.

If you already have a car in your garage, then there is always a reason to worry about purchasing a new high-status foreign car. The way out of this situation again lies in obtaining a loan. There are many on the market now credit offers, here we will talk about car loans and consumer lending. Which one should you choose?

What is the difference

So, we have 2 options for a cash loan:

• car loan;
• consumer loan.

The differences between these credit products very significant. If you take out a car loan, then its purpose is precisely defined - to buy a car. You will not be able to buy anything else when receiving this loan - in this case, the funds are allocated specifically for the purchase of a car.

But if you take out a consumer loan, then with the money you receive you can buy not only an “iron horse,” but also a washing machine, a TV, and whatever your heart desires.

We have decided on the purpose, now it’s time to decide on the concept:

• Car loan is a cash loan issued to citizens to purchase a car. There is one very important feature- the purchased car will remain in collateral with the creditor until the debtor is fully paid.
• Consumer loan implies the issuance Money for the purchase of any useful household item. With this money you can buy the same car. In this case, the purchase will not have to be pledged to the bank.

Note! If it turns out that, having received a consumer loan, for some reason you cannot repay the debt to the bank, then bankers will not have the right to confiscate your vehicle for the purpose of its subsequent sale. But in the case of a car loan, everything is quite the opposite: if there are no payments, the bank will take the car from you and sell it to cover the costs associated with issuing funds to the debtor.

In order not to make a mistake and make a worthy choice, you need to be aware of issues related to the pros and cons of these types of lending. Only by analyzing the situation can you choose the ideal option. This is exactly what we will do now.

Car loan - advantages and disadvantages

This loan product is very popular today. But to get a car loan you need to have initial capital. Depending on the conditions of various banking organizations, you will have to initially pay up to 30% of the total amount.

Don't forget about the need to have funds for insurance - it will cost you about 10%.

Almost all car loan programs include car insurance. You shouldn’t be surprised by this, because in this case the car becomes a guarantor of payment borrowed money. The vehicle will be pledged to the credit institution until full payment by the debtor. By the way, he (the debtor) will not be able to sell his car without the bank’s consent until the debt is paid in full. The car cannot only be sold, but also exchanged or given away.

Taking into account all the pros and cons of credit products, it will be easier to make a choice. When concluding a car loan agreement, you must take into account that the car should only be purchased at a car dealership.

In addition, the following requirements apply to a car with a car loan:

• the car being financed must be “younger” than 5 years old;
• acceptable technical condition;
• body geometry must be in accordance with the standard;
• import of foreign cars into the country must be carried out without violating the legislation of our country;
• The steering wheel must be on the left.

And now directly about the positive and negative sides of car loans.

pros

1. Interest on a car loan is several times lower than on a consumer loan.
2. You can get a car very quickly - often on the day of signing the loan agreement.
3. In this case, no types of collateral will be required, since the purchased car will be the guarantor of loan repayment.
4. You can participate in the trade-in program. It allows you to exchange your old car for a new one with an appropriate surcharge. In some cases banking organizations provide additional bonuses in the form of interest reduction.
5. Many banks are quite tolerant of customers who have used car lending services and are tolerant of late payments.
6. This program provides various benefits. Discounts can reach 10%. Part of the losses of banking organizations is borne by the state.
7. Car sellers offer significant discounts to buyers who purchase a car with a car loan.
8. There are a lot of car loan programs, and car dealerships, as a rule, provide the opportunity to choose.
9. But the main advantage is the speed with which you can buy a car. Everything happens without unnecessary running around and standing in lines.

Minuses

1. You have to make a down payment. You won’t be able to do without it, since almost all banking organizations require you to deposit a certain amount initially.
2. Your car will be held as collateral by the credit institution until the loan amount is paid in full. If the debtor does not make payments, then the bank has the right, by a court decision, to take the car for debts.
3. The car must be insured with CASCO. But the costs of this insurance are quite significant, they can reach up to 10% of the cost of the vehicle. And if the car you buy is expensive, then the amount of overpayment will be quite significant. Car dealerships may offer a loan for insurance, but the interest on this loan will be much higher than the interest rate on a car loan.
4. Sometimes, with a car loan you can only buy a certain model of car. And it’s not at all a fact that the car you would like to buy will be on this list.
5. It is not profitable to repay this type of loan ahead of schedule. The fact is that banks in this case provide a certain commission.

Consumer credit - pros and cons

Similar loans are issued by banks and other financial institutions to buy the most different goods. Usually the amount issued does not exceed 1 million rubles. Such a loan can be issued for the purchase of a specific item, in which case it becomes targeted. But non-targeted loans are also practiced - when using them, the debtor, when drawing up documents, is not obliged to indicate for what purposes he needs the funds.

These types of loans are issued to employed citizens over 18 years of age who have worked in their last place of employment for at least six months.

Here are the documents you will need when applying for a consumer loan:

• a copy of the work book;
• passport;
• 2-NDFL;
• military ID.

If the debtor takes an amount not exceeding 400,000 rubles, then it is quite possible to get by with only a set of these documents. If much more is required large sum, then banking organizations may require the provision of collateral or a guarantor, and a list necessary documents in this case it will be much larger. If in relation to the client credit organisation will accept positive decision, then the debtor will be able to receive the money in cash at the bank office. Money can be transferred to his account in any bank or to a card.

Advantages of a consumer loan

1. The consumer has the right to purchase any car - it can be brand new or used.
2. You can buy a car from a private owner, and in this case trade is appropriate, and you can buy a car cheaper.
3. The cost of buying a car is significantly reduced, since there is no need to take out insurance.
4. The car will not be pledged to the lender. You can dispose vehicle at its own discretion - the bank will not take it away from you.
5. The car can be sold or donated.
6. There are no fees for early loan repayment. This means that you will be able to repay the loan ahead of schedule if the opportunity arises, and you will not incur additional expenses.

Flaws

1. Interest rates higher for car loans. The overpayment can be quite significant.
2. Cars are expensive, so it takes a lot of money to buy them. However, our banks are in no hurry to provide significant amounts of consumer lending. There is also a high chance of getting rejected. The risk group includes citizens with low wages and those who have made late payments in the past.
3. The big disadvantage is the need for guarantors. Of course, you can do without collateral, but the interest in this case will be higher.
4. Getting a consumer loan is quite difficult - it will take a lot of time to process it.

Which type of loan is more profitable?

It is impossible to answer this question unequivocally - in some cases a car loan may be more profitable, in others it is preferable to take out a consumer loan.

Let's consider several situations and discuss some nuances:

• Let's say you've collected almost all the money you need to buy your dream, and you're missing a small amount. In this case, it is preferable to take out a consumer loan, because you really don’t want to pledge the car to the bank when almost all the money has been collected to purchase it. If you don’t have enough money, it’s better to use a car loan.
• If you feel that your financial position unstable, and you can lose your job at any time, it is also better to get a consumer loan. In this case, you can easily sell the car, which cannot be done when choosing a car loan, when the bank will sell the car. As a rule, banks sell cars at a price significantly lower than the market price.
• If you do not expect to own the car for a long time and think that you will sell it before repaying the loan, it is wiser to take out a consumer loan, because with a car loan the car remains pledged to the lender.
• If you qualify for the state car loan program, it is better to take out a car loan. This way you will get a very good discount. In addition, you can count on the government to pay off part of your debt.
• If your financial situation is stable, if you have chosen an expensive car, then take out a car loan. Statistics say that owners of expensive cars still apply for CASCO insurance.

Of course, the above cannot be called an axiom. We can only advise you to contact several shops and banks to clarify their credit conditions. Compare not only overpayments, but also the entire cost of the loan. Options with low interest rates, as a rule, are fraught with pitfalls in the form of extra costs for opening an account, etc.

In the previous topic, I talked about what it is, what are the main characteristic features of this form of bank lending, and now I want to dwell separately on all the pros and cons that it carries car loan. I will try to be as objective as possible and take everything into account important points, but if I forget something, correct me. So, the main pros and cons of a car loan.

Pros of a car loan.

1. The opportunity to have a car without having money for it. Perhaps this is the most important advantage, which, in principle, banks focus on in their advertising campaigns. A person immediately receives all the benefits of using a car, paying its cost gradually over several years. In many cases, a person using a car loan does not buy the car for which he has enough money, but the one he wants.

2. Profitable terms lending. In most cases, a car loan involves quite a lot, compared to many other bank programs. Interest rates on car loans are close to those on .

3. Simple registration procedure. Very often you can get a loan for a car directly at a car dealership: many banks practice such forms of cooperation. But even if you contact a bank, applying for a car loan in most cases will not take much time: the package of documents is minimal, and the borrower is verified using special scoring algorithms.

4. Insurance protection comprehensive insurance A car purchased on credit is insured against many risks under the motor insurance program in favor of the bank. Thus, if an insured event occurs that leads to the complete loss of the car, Insurance Company will pay compensation, at the expense of which the loan will be repaid. Repairing minor and medium damage to the car will also be covered by insurance.

Disadvantages of a car loan.

1. Significant increase in car prices. If you repay a car loan according to the planned schedule, for example, over 5 years, then the increase in purchase price can be 50 percent or more without taking into account comprehensive insurance, and even more with it. At the same time, the car itself will become cheaper, even from the moment it leaves the dealership. the price will fall by 10 percent.

2. Additional burden on personal or family budget. Like any loan, a car loan is issued on a paid basis and involves regular payment of interest, commissions, and insurance payments. Simultaneously additional expenses The car itself also requires: fuel, garage/parking, washing, accessories and components, etc. Thus, when buying a car on credit, the total burden will increase very significantly.

3. Impossibility of selling a car until the loan is fully repaid. If a car owner wants to change his “iron horse” or sell it for some reason, he will not be able to do this in the usual way until he has fully paid off the car loan. But even if it is possible to persuade the buyer to deposit money in advance, and then wait until the bank removes the seizure from the car, he will still gain significantly less money than he spent (not only the reduction in price of the car itself due to wear and tear will play a role, but also additional payments, paid to the bank).

4. Mandatory insurance comprehensive insurance Not every motorist wants to insure his car under the motor insurance program, but in the case of a car loan, this will have to be done in mandatory. Moreover, the car will be insured in favor of the bank, and not the car owner, and even in the insurance company specified by the bank, and the conditions in it will not necessarily be favorable. The cost of comprehensive insurance reaches 10% or even more of the cost of the car, which is very significant.

Here, perhaps, are all the main pros and cons of car loans. Personally, in my opinion, the disadvantages are more significant. I would not buy a car on credit, and I do not recommend doing this, except for one case: when the car is necessary for business and with the help of it a person can earn more than he will pay the bank in interest and other payments.

A good alternative to a car loan is a competent one, which allows you to independently accumulate funds to buy a car and buy it at a profit for yourself, and not for the bank.

Stay tuned and level up financial literacy. See you again!