The auto financing arises thanks to the reduced financial capabilities that force the majority of employees to face prudent choices in any type of purchase, they also impose to submit to some obligations in the event these expenses take on a certain amount.
These are represented by the need to access credit in order to take advantage of loans to support commitments that, depending on the needs, will fall on heterogeneous purposes having the common denominator the need for liquidity.
Among these, the most popular among the requests made by banks and financial institutions is the loan for the purchase of cars, whether new or used, also useful to avoid the impact that would have the only payment on the economy personal or family.
- How car financing is organized
- What is the difference between new or used car financing
- How to get a car loan without a paycheck
- 2019 car loan
- The car loan
- Financing for car purchase
- Buy a car with a car loan
How car financing is organized
It is opportune to specify that the auto loan is part of the case of loans aimed, that is, granted for a specific purpose and usually takes place through the direct mediation of the concessionaire or retailer.
The bureaucratic process of the necessary documentation, together with the sales contract, will be perfected directly at the dealer’s or seller’s premises that has an upstream agreement or agreement with specialized financial companies, which will verify the compliance of the data, verifying the previous debtor’s situation and the coexistence of the guarantees supporting the approval.
It must be considered that a request for auto financing, like other loans attributable to the debtor’s solvency, necessity of supporting documents to support its feasibility, ie the presence of a certain and documentable income source, such as to presuppose the certainty of return, or guarantees provided in-house or with third-party guarantees to protect the credit exposure.
Once the loan is granted, the issuing body will pay the full amount directly to the seller to cover the purchase, committing the buyer to the payment of constant installments, including interest and other additional charges, whose duration in the amortization plan provides, generally, an initial period, known as pre-amortization, in which there are no payments.
This vacatio rate is a discount for the buyer who will thus be able to amortize the ancillary costs related to insurance and car tax.
The buyer could also opt for the request for financing directly from a credit or financial institution of trust, in this case there will no longer be talk of auto financing but personal loan, clearly not finalized.
The choice could be dictated by the faculty to fully dispose of the amount granted, perhaps allocating part of the same to the insurance and tax coverage mentioned above, but implies a system of interest charges applied higher, unless you can access the credit through formulas preferential products such as the sale of the fifth.
In fact, since the latter is not finalized, it is the most convenient and flexible expedient, to which young workers in particular use for the purchase of a car, regardless of whether it is new or used, even more so if they are part of the public service sector. .
What is the difference between new or used car financing
The financing methods that can be provided by direct agreement of the dealer or retailer, change substantially if the purchase is aimed at used rather than new.
First of all, on the quantity of minimum payable which, clearly, in the case of used car loans, can not have a threshold that can be financed below a certain variable limit depending on the Eurotax price, ie the real market value that the vehicle represents, taking into account of the general conditions, year of matriculation, displacement, etc.
Obviously this represents a parameter of convenience, below which the financial company could not construct any profitable depreciation plan, the duration of which, moreover, will be reduced due to the amount of loan that can be disbursed.
In fact, in principle, a car loan will have a duration that ranges from a minimum of six months to a maximum of five years, and will be affected by the TAN, that is the annual nominal rate, as well as by the APR, namely the effective amount interest applied to the capital that is contained in the annual percentage rate of charge.
Although several advertising rewards have zero-interest auto loans, in reality they refer to only tan, charging the actual amount of the gain on the taeg, including the fee paid for brokering and dealing with the seller’s practices.
Unlike the case in which the latter, for commercial purposes or market logic, in particular in the sale of the new, also cancels by convention the same taeg, inviting the potential buyer towards the means intended for immediate sale.
How to get a car loan without a paycheck
The possibility of buying a used car without intermediation of a financial agreement with the dealer is possible, only if access is guaranteed by any form of reliable and documentable monthly income, be it salary or pension. It has also been seen that if you do not want to undergo the finalized loan, the personal loan, also in the form of a transfer of the fifth, is the most flexible and immediate formula to obtain the liquidity necessary for the formalization of the purchase. However, if you do not own a paycheck or pension slip, a credit or financial institution could grant auto financing only in the presence of different income, that is from self-employed or professional, or in the presence of guarantees placed by third parties with guarantees or guarantees. All this is articulated in the necessity of certainty of solvency or of attackable substances, which the debtor must be able to provide to protect the interest that any issuing entity claims for the risk of exposure to credit towards it.
2019 car loan: request the best Auto Loan
The purchase of a car is often an important step because it represents, regardless of the quality of the vehicle acquired, a financial commitment whose sustainability is often subject to the use of a car loan or personal loans. The possibilities with which an individual can have access to credit is subject to the admissibility of some fundamental requirements, not only in relation to the purpose for which it should be granted, but above all for the solvency that the same subject must prove to be able to support. So whether it is a finalized loan or a simple personal loan, the issuing institution is a bank or a financial institution, will demand a series of prerogatives to protect the risk to which it is exposed when granting the requested credit. In the case of a car purchase it is essential to evaluate which strategy is preferable to adopt, since the simple minimum percentage variation of the applied interest rates could mean at the end of the amortization period of the auto loan for the purchase of the car, substantial disbursements .
The car loan
Assumed that every dealership or car dealer have specific agreements with financial groups specialized in micro credit, it will not be difficult at the time of the choice of the vehicle, that a payment of the purchase through a car loan is proposed. In this specific case it is the same dealer or concessionaire to make the request with the financial agreement, taking the burden of providing all the documentation that in turn must be requested from the buyer. Consequently, attached to the contract of sale, will be identity documents and income documentation or paycheck, pension slip or tax return, in case the car loan is required by self-employed or self-employed. The financial receipted acknowledgment of the value of the documents presented, certifying the debit capacity possibly supported by bank statements or endorsement signatures, grants the credit by refounding the seller for the entire amount that can be financed. This will develop an amortization plan in constant installments of a duration not exceeding sixty months, calculated on the basis of the relevant annual rate or annual rate and taeg, ie the annual percentage rate effective. These two parameters may affect the share of interest that will actually be paid, so that even if a zero TAN is advertised, it should always be referred to the APR, which is the calculation coefficient within which each financial unit is included. the ancillary costs and charges of a loan, such as stamps, taxes and miscellaneous fees.
Financing for car purchase
The financing for car purchase is therefore in effect a car loan, but with the essential and binding prerogative of being finalized, ie its existence is related to the conclusion of a contractual agreement between the dealer and the buyer. If a convenience with a credit or financial institution of trust emerged in the comparison between the interest rates, the buyer could decide to purchase a car with a personal loan. The substantial difference lies in the fact that since it is not finalized, so it does not need any justification to be granted if not the debtor’s ability to put it back, it is certainly more flexible and immediate, in particular if you are already a client of the chosen institution or have a crystalline debtor history. In the car loan that you should therefore define better personal loan, the amount requested will remain in the availability of the debtor who in addition to being able to buy the car, will be able to meet all the related expenses, namely insurance and stamp duty. It goes without saying that with the personal loan can be required a figure higher than the real value of the vehicle, whether new or used, a factor that instead is binding in the case of financing. This assumption does not benefit the loan compared to the loan, even if this has slightly higher rates, just in the sale of the used. In this case, the evaluation parameters of the credit or financial institution that is, are completely revised according to the actual market value of the vehicle, that is, the quotation emerging from the Eurotax list depending on the year of matriculation, displacement, etc. This means that, in the event that the value is small and therefore does not justify a convenience for a low credit, the loan may not pass or be granted on the basis of a short amortization plan, in any case never less than six months. For this reason, direct access to personal credit is the most successful formula in the purchase of a used car, particularly if represented by the assignment of the fifth salary or pension.
Buy a car with a car loan without a paycheck
The personal auto loan, unlike the loan, could also be aimed at those who are not in possession of paychecks, so they can not prove their monthly income. This has often been noted to be the basis on which any credit granting body is counting, in order to protect its guarantee to return within the agreed time of the agreed sums. However, there is an aspect to be underlined, however, in the phase of evaluation of a personal loan, credit or financial institutions take into account, namely the presentation of documentation useful to demonstrate any income capacity that can support the request of necessary sums. All this essentially translates into the presentation of the tax return in cases where the personal car loan applicant is a self-employed person or a professional, with the presentation of the Cud from which any type of income can be found. Additional forms of guarantee could be summarized in the presentation of statements from which they are credited with a certain frequency for the activity performed, or the availability of personal property as real guarantees. Also the presence of a guarantor that endorses the debt or is subject to income with the co-certification of accounts with the debtor, is a protection that could be useful to the bank or financial, which justify these claims with the risk of granting credit to individuals at risk , which may prove to be insolvent.