Banks most often finance the purchase of new cars, which in themselves are the best collateral for loan repayment. In their case, the problem of price compliance with the real value of the car is also eliminated. Therefore, new cars can be credited on more favorable terms, i.e. using a lower commission and a reduced nominal interest rate. Let’s check, however, were crediting the purchase of a new and used car will be the most advantageous.
In the Good Finance car loan ranking in March, we assumed that a married couple who has one child is interested in buying a new or used car. Customers do not have other loans or credit cards, and their total income from an employment contract of indefinite duration is USD 3,946 net.
Financing the purchase of a new car
At the same time, we assumed that our example family is interested in buying a car whose price in the salon is USD 60,000. However, borrowers only need 48,000. USD loan, which they intend to repay within 5 years. The rest of the price of the car will be covered by them from the accumulated savings.
Taking into account the above assumptions and assuming that the criterion for assessing banks’ offers is the amount of the monthly loan installment, E-Money together with Good Credit becomes the leaders of the statement. These banks offer the lowest installment, amounting to USD 950.03.
Financing the purchase of a used car
Our example borrowers are also considering the option of buying a used car – a year of production 2009. Similarly to the above case, the loan amount is USD 48,000 and the price of the car is USD 60,000.
At the head of the list, the twin offers of E-Money and Good Credit have again come out. In both cases, the monthly installment is USD 1,020.07. The second position, with an installment of USD 1,027.28, was Good Lender Bank, which, as in the case of a new car loan, will not charge a commission for granting the obligation.
The installments of the loans they propose are USD 1,032.40 and USD 1,043.16, respectively.
New or used? The difference in the total cost of credit can help answer this question. In the case of the winning E-Money and Good Credit offers, crediting the purchase of a used car will be exactly USD 3,962.31 more expensive than financing the purchase of a car from the salon.