You can finance a car in different ways. An often unknown solution for financing is car loan with final payment. For some car buyers, this type of vehicle financing can be very interesting because it offers a lot of flexibility in financial terms.
How can I finance with the final payment?
With a car loan with final payment, you can variably design your own monthly charges for the car loan. The contract is concluded in such a way that a loan for car financing is concluded for a certain loan amount. This loan agreement is concluded less a final payment, which in turn must then be made at the end of the term of the loan agreement. With this form of financing, the car buyer has to take out a smaller loan amount than would be the case with full financing.
This means that the monthly installments are lower than if the entire car price were fully financed. Especially if you expect a larger amount of money from a savings contract or similar after the loan contract has expired, the car loan with final payment can be a very good solution for buying a car, for example. Depending on the financial situation, this car loan can also be provided with a down payment on the vehicle. This form of financing can be realized with or without a down payment.
What are the options for the final payment?
If the car loan with final payment with regard to the installment payment is fulfilled and the remaining payment is due, there are various payment options for the borrower. On the one hand, the vehicle can be sold and the remaining payment can be repaid from the sales proceeds. The condition for this is that the vehicle is in optimal condition and the residual value can ultimately also cover the remaining payment. Follow-up financing with a subsequent loan is another way of continuing the car loan with the final payment and keeping the vehicle. Ultimately, of course, there is also the option of paying off the remaining payment in one sum and thus acquiring full ownership of the vehicle.
In general, this loan is a very flexible way to procure a vehicle with a relatively high value, but to keep your own rate burdens low. Many car dealerships now offer this credit in cooperation with their main bank. However, as a customer, you should make a thorough comparison for this auto finance. The most convenient solution for financing directly from the car dealership does not necessarily have to be the cheapest option of vehicle financing.
A comprehensive loan comparison is therefore important in order to finance the car as cheaply as possible. You should also check the market again when it comes to follow-up financing, because due to the great competition on the credit market, the conditions for car loans are changing very quickly today.