With the car loan comparison from FOCUS Online you will find the cheapest car financing. You can also find out what is important when it comes to car loans.
Anyone who has decided to buy a car faces important decisions. This also includes the question of how the vehicle should be financed. It is often not possible to do this out of your own pocket. In order to nevertheless fulfill the dream of a new car, banks, dealers and manufacturers offer their customers various financing options.
With the credit bureau-neutral comparison from FOCUS Online, you can quickly and free of charge compare offers and find the right loan
In order to find the right package, you should carefully compare the financing offers. In the past, this was often a tedious and time-consuming job. Today there are smart car loan calculators on the Internet that give you a quick and non-binding overview of providers and conditions with just a few clicks of the mouse.
It’s definitely worth it – if only to have a better basis for negotiating a loan talk. With the loan comparison from FOCUS Online, you can find a suitable loan for your car financing quickly and neutrally.
Loan calculators make financing comparisons quick and easy. Just a few entries are enough:
After the data has been sent, you will be shown a hit list, which usually contains the provider, the amount of the installment and the annual percentage rate. Compare the different offers conscientiously and pay particular attention to the effective annual interest rate. You can start a new search at any time. In this way, you get a feeling for how, for example, different maturities affect the installment amount and the effective annual interest rate. If one of the offers meets your expectations, you can submit a non-binding request for conditions to the lender. The request for credit conditions is often Schufa-neutral, which means that condition requests have no influence on the Schufa score and are not visible to other banks.
A car loan is generally a earmarked installment loan for a private individual, which is taken out for the purchase of a new or used car. Motorcycles, mobile homes and caravans can also be financed for a specific purpose. The monthly rate is usually the same and is made up of interest and repayment.
The interest rate is also usually fixed for the entire term. Since the remaining debt is reduced over time by the repayment, the interest portion of the installment decreases, while the repayment portion increases accordingly. In practice, car buyers are primarily interested in one question: what rate has to be paid for how long and what are the associated costs?
Sample calculation: Assuming your family is expecting a new member and you are therefore looking for a more spacious car. You will find what you are looking for on an online car exchange. Purchase price for the dream car: 20,000 euros. You can spend 5,000 euros of this yourself. The rest is to be financed by a car loan from the house bank. The loan amount is therefore 15,000 euros. The bank reviews your request and is willing to grant you a loan for the required amount with a term of 48 months and an annual percentage rate of 3.5 percent. A monthly rate of 335 euros is calculated from the term and the interest rate. For you, this means that you have to pay a total of EUR 16,080 to the bank over the term of the loan (EUR 335 x 48 months). EUR 15,000 of this is for the repayment of the loan and EUR 1,080 for interest payments.
One of the great advantages of car loans is that the term and installment amount can be adapted to the individual wishes or financial circumstances of the borrower. For example, if you are able to pay a higher rate, this logically reduces both the term and the absolute interest payments. If, for example, the rate from the previous example is increased from 335 euros to 440 euros, the loan would be repaid after 36 months (instead of 48 months). Due to the faster repayment, less interest has to be paid overall. In the case study, the interest expense would be reduced from EUR 1,080 to EUR 840.
Term scenarios: 15,000 euros car loan, 3.5% APR
In principle, the amount of the installment can be freely agreed with the bank. However, in practice there are natural limits – both upwards and downwards. On the one hand, no bank will grant a car loan if there is a risk from the outset that the customer will not be able to meet his installment payments. For example, because his income is too low to service the debt.
Suppose a person has a net salary of 2,500 euros. His fixed costs such as rent, electricity, insurance and the like amount to a total of 1,500 euros per month. According to this, he still has funds of 1,000 euros available for free use. A credit rate of more than 500 euros would probably be too much of a good thing here. On the one hand, because the borrower also needs money to live on. On the other hand, because there is hardly any leeway left for unexpected expenses.
Borrowers are well advised not to push the rate to the limit of what is financially feasible. Because if, for unexpected reasons, he is in arrears with at least two consecutive installments in whole or in part and also does not comply with the reminders and the deadline set by the bank, then the bank has the right to terminate the loan extraordinarily. That would have very unpleasant consequences. On the one hand, because a loan termination is associated with a negative Schufa entry, which makes future borrowing more difficult. On the other hand, the outstanding loan amount would be due in one sum. The bank could then use the collateral deposited to settle the debt. Since this is usually the vehicle itself in the case of car loans – keyword: security transfer – the borrower would suddenly be without a car.
Note: In order not to get into the dilemma of late payment in the first place, the amount of the loan installment should be calculated sensibly in advance. Lower rates extend the term, which in turn increases the absolute interest burden, but that’s better than suddenly being left with debt and without a car.
On the other hand, the credit rate is also subject to lower limits. It makes no sense to finance a car beyond its useful life. In extreme cases, the customer then stutters off a loan for years, even though the financed vehicle is hardly worth anything or has possibly even ended up on the scrap heap. For this reason, banks usually do not offer car loans longer than 96 months, i.e. eight years.
The charm of a car loan also lies in the fact that it is sometimes significantly cheaper than a conventional installment loan. This has to do with the fact that in the case of car loans, the vehicle to be financed usually serves as security for the bank. The contractual instrument for this is the transfer of ownership. This legal construct is used to agree that the vehicle to be purchased remains in the customer’s (owner’s) possession and that he can also use it freely. However, the bank is the owner – until the loan has been paid off.
To ensure that the customer cannot sell a vehicle assigned as security without the consent of the bank, the vehicle registration document (registration certificate II) is usually handed over to the lender. If everything goes according to plan, the security transfer ends with the repayment of the last installment and the customer receives the vehicle registration document back. If the borrower is unable to pay off the debt, the bank can sell the vehicle to use the proceeds of the sale to pay off the outstanding amount. It is also common practice for banks to oblige the customer to take out fully comprehensive insurance for the vehicle in the event of a security transfer. In this way, the institute protects itself against any accidental impairment.
With car loans, as with all loans, it is not the borrowing rate that matters, but the effective annual interest rate. While the debit interest only provides information about the nominal interest expense, the effective annual interest includes the actual interest costs and all other price-determining factors from the regular credit history, such as fees. It is therefore particularly suitable for comparing different loan offers with the same rate and term.
What consumers need to know: The effective annual interest rate specified in online loan comparisons or in advertising is not mandatory for the bank. This means that there may be no entitlement to it. Who gets a loan and on what terms depends on various factors. The following rules of thumb:
In addition to buying a car, manufacturers and dealers usually also offer consumers financing for the vehicle via special subsidiary or manufacturer banks. These offers convince at first glance with often exceptionally favorable conditions, such as zero percent financing. How is that possible? First of all, it should be noted that zero percent financing is usually a classic installment loan with a fixed term and installment amount, but without interest charges for the borrower. But zero interest does not automatically mean that the vehicle can actually be purchased cheaper. Because the loan is already subsidized due to the waiver of interest, the retailer usually does not grant any further benefits – for example in the form of a cash payment discount. For this reason, a bank loan can be cheaper than a dealer offer, no matter how attractive, despite higher interest rates.
Tip: Financing with a car loan gives the buyer the opportunity to buy in cash. For this purpose, cash payment discounts can be negotiated in advance, which significantly reduce the required financing amount. In this case, the car loan from the bank usually offers cost savings of several hundred to thousands of euros compared to zero percent financing from the dealer. Therefore the following tip: Find out from the retailer which discounts are possible. According to an evaluation by Car Future, cash payers in Germany currently receive an average discount of 19.7 percent on the top 30 models (as of August 2021).
Car dealerships often advertise with so-called balloon financing. While with classic car financing, constant installments are due every month until the payment is made, balloon financing is repaid in comparatively low ongoing installments (which reflect the wear and tear of the car) and a large final payment (balloon payment). This is based on the residual value of the vehicle and can therefore be very high. Because the current monthly installments are relatively low due to the final payment, this form of financing is particularly appealing to people who do not have such a high income but still want to afford a comparatively expensive car.
But beware: balloon financing has its pitfalls. The following example shows why: With a classic car loan of 15,000 euros, a term of 48 months and an effective annual interest rate of 3.5 percent, the monthly rate is 334.97 euros. In the case of balloon financing with a final installment of EUR 6,000, the customer only pays an installment of EUR 222.54 with the same effective interest rate and the same term. His monthly burden would therefore be around 110 euros less. But the end result is different. Because the final installment is not free. It has to be funded. Or to put it another way: interest is charged for the final installment, which is included in the current installments. As a result, the total burden for a balloon loan of EUR 16,459.40 is around EUR 381 higher than for a classic installment loan (EUR 16,078.74).
Three-way financing is similar to balloon credit. In addition to the components of the monthly installment and final payment, this purchase variant also includes a down payment at the beginning of the term. In principle, the total costs are usually higher here than with a classic installment loan. Nevertheless, the three-way loan is very popular. The reason for this are the three options at the end of the term, which give this form of financing its name:
Leasing: renting instead of buying?
In car leasing, unlike car financing, a vehicle is only rented for a certain period of time. The main advantage of car leasing is the temptingly low leasing rates, since you only pay for the use of the vehicle. You are also not tied to a specific car for years, but can switch to a new model after the leasing period has expired. But is it actually better or cheaper to lease a car instead of financing it? A tricky question, because obligations, restrictions and possible additional costs at the end of the term can quickly lead to nasty and expensive surprises.
>>Surf tip: Here you can find out what you should definitely consider when leasing a car.
Many consumers fear that they will not get a car loan due to a negative Schufa entry or a moderate Schufa score. It is true that banks have to carry out a credit check for car loans, which also includes a Schufa query by default. Loans without Credit Bureau are therefore not possible with reputable providers. This also applies to dealer financing. Here the Schufa query is carried out by the cooperating bank.
In the case of a negative entry (e.g. through an affidavit) no credit is usually granted. The situation is somewhat different with a moderate Schufa score. In this case, a loan rejection does not necessarily have to take place. The bank can still grant the loan, for example because there has been a trusting business relationship with the customer for years and there have never been any problems in the past.
Note: If you advertise on the Internet with loans without credit bureau or loans without a credit check, extreme caution is required. Behind it are often dubious providers who are out for rip-offs.
>>Surf tip: Here you can find out what you should definitely consider for a loan despite Credit bureau.
Car loans belong to the category of consumer loans and can therefore be terminated and repaid prematurely at any time without notice. However, the bank can demand a prepayment penalty for this. This is limited to one percent of the early repayment amount (or 0.5 percent if the remaining term is less than one year).
It is usually possible to adjust the monthly loan installment during the term. You can choose between an increase or decrease in rates. If you change the installment, the bank draws up a new loan agreement. The interest rates on your loan can therefore change.
As surveys show, most German consumers would prefer to finance their dream car entirely from their own resources. But very often the savings are not enough. A study by the Society for Consumer Research (GfK) has shown that in Germany almost every second new car and every third used car is fully or largely externally financed. One of the classics is vehicle financing via a bank loan. Another way is via the dealers, who also compete for customers with attractive complete packages. The same applies here: carefully weigh up the various financing models. Which variant is the best or cheapest differs from individual case to individual case.
