Are you annoyed by a crowded bus? Does your team always leave your nose? Shopping bags almost crush you to the ground?

It’s a sunny weekend and your children are sitting in front of the TV? Just because you don’t have the money to buy a car doesn’t mean you have to give it up.

Take a car loan for your dream car

Car loan Fine Bank. Car loan  Interest rate 6.24 % APRC 9.27 % Commission 6.00 % Amount to be repaid USD 61,076.52 Installment 1 110.48 zł show me the details Ask for a loan Good Finance car loan Cash loan – offer for new customers  Interest rate 7.49 % APRC 9.46 % 3.50 % commission Amount to be repaid USD 61,299.67 Installment 1 114.54 zł show me the details Ask for a loan

Do you need a different offer?

Representative example:
The actual Annual Interest Rate (APRC) for the car loan offer is 9.37%. Contract duration: 55 years, total loan amount: USD 50,000.00.

The total cost of the liability paid in equal (annually) installments: USD 11,188.09, the total amount to be paid: USD 61,188.09. Repayment is in 660 equal (annuitant) installments. The calculation was made on March 30, 2020, on a representative example.

Car loan

A car loan is a targeted product. This means that the contract will contain information about what it is intended for and you will not be able to spend money on anything else. Before you get it, the bank will check your creditworthiness to make sure you can pay it back.

The bank must additionally protect itself. In the case of car loans two most common forms of security: securing the transfer of ownership and a registered pledge. Much more often, banks use the latter – it works similarly to a mortgage on a housing loan.

This means that the borrower can use the vehicle all the time, and the bank can satisfy its claims on the pledge – regardless of who owns the car.

The registered pledge is established on the basis of a contract concluded between the car owner and the creditor (bank). The security expires after the loan has been repaid.

Car leasing

Consumer leasing, because we will focus on such today, can be used if you do not run a business. It is basically a long-term car rental for which you pay a monthly fee, i.e. a leasing installment. If you pay them back on time, you have the right to buy the vehicle after the expiry of the leasing period.

Purchase is usually a fraction (from a few to several percent) of the value of the vehicle at the time of the conclusion of the contract. Then you take ownership of it. When driving a rented car, you can only worry about fuel and car wash – all the extra things are arranged for you by the lessor.

What should you choose – loan or leasing for a car?

In the case of leasing and credit, the value of the own contribution that you have to make is comparable. But if you have an accident or a car breakdown, you don’t have to pay for repairs. The lessor will take care of these things.

Also read: Pros and cons of long term rentals

The main difference is that when you take a loan, you are immediately a co-owner of the car. When leasing, you are only its user, and the car belongs to the lessor until it is bought back. So if the car is not yours, you can not change anything in its appearance and mechanics.

If you want to take a car loan, you need to settle more formalities (e.g. register a car or register it for a registered pledge). If you rent a car, the leasing company will do everything for you.

When you decide to lease, you must take into account that when you have problems paying back installments, the lessor will ask you to return the vehicle.

Do not miss: What is leaseback?

Credit is still more available today – many banks offer it, so it will be easier for you to choose an offer. Long-term rental is also associated with various restrictions (e.g. kilometer limit).

If you can only afford an older, used car, then credit will be the only solution. Only new or used briefly can be leased. However, if you need a new car for a year or two, you don’t drive too much and you are not worried that the car will not be completely yours, choose to lease.