What is the Best way to Finance a Car?

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The imminent rise in VAT from 18% to 21% decreed by the Government, and it will enter into force on September 1; will affect a multitude of products, and among them, vehicles, which from next month will be, on average, 650 Euros more expensive.

Many people, therefore, are posed to overtake August the purchase of a car to avoid that rise. The total acquisition of car in August will prevent the increase in VAT, but will be paid a part in September, is taxed now at 21% rather than 18%.

A rise in tax will affect almost everyone who has decided now to acquire a vehicle. And it is that only 20% of the buyers of a car in Spain pay it in cash, compared with the 80% who decides to finance the purchase, according to data from the Federation of automobile dealers associations.

Options to finance car – Personal loans

At this point, it is important to know, therefore, what are the best options to finance the purchase of a car. Taking in that the default rate that supports the Spanish financial system stands at 8.95%, to just two-tenths of its all-time high, it is not surprising that entities have toughened their lending conditions.

However, they remain only personal loan market to finance the purchase of a vehicle and which offer affordable interest rates, although some partners carry the recruitment of a number of products.

The arrangement fee is 1.25% as well as the Commission for early repayment. This loan, however, offers a lack of start-up capital for six months. For an amount of 10,000 Euros for a term of 5 years back, the monthly pay is 196 Euros.

“Car loan” final quote of Bilbao Biscayan Kutxa, with an interest rate of 5.89%, does not require the hiring of any associated product. It offers a maximum of 60,000 Euros funding and you can hire at any branch of the entity. Basque box also offers the possibility of deferring the payment of 25% of the capital in the last contribution, so the monthly fee will be more affordable and the last can afford with the value of the sale of the vehicle. With an amount of 10,000 Euros for a term of 5 years, the monthly payment of this loan is 198 EUR the first year and 194 Euros the rest.

Alternatives to bank financing – financial dealers

In these moments, in which sales of cars in Spain continue to fall – in the first six months of the year accumulate a fall of 8.2% – manufacturers are very interested in improving their sales. A good choice, therefore, is the finance the purchase of the car at the dealership itself.

The concessionaire performs the operation through a financial which is usually owned by the manufacturer, with which to pursue the sale, is willing to take greater risks than a bank at the time of grant funding. The main advantage of the financing is that they are able to adapt to the consumer and their financing is characterized above all by the flexible lending.

The major automobile brands have own financially. Thus, for example, Volkswagen through Volkswagen Credit offers to finance up to 100% of the vehicle with the possibility of establishing the monthly fees that are best suited to the client. Also offers comprehensive solutions that include credit total protection, total loss insurance as well as auto insurance.

Also Seat, Seat Credit offers this comprehensive formula with funding that adapts to the needs of their customers. For its part, through the financing of Audi, Audi Credit, customers can choose to buy your car. It decides the amount of the monthly fee and the time that you want to finance the purchase, between 12 and 84 months. This financial also offers comprehensive solutions and is financed up to 100% of the value of the vehicle.

 Image courtesy of digitalart / FreeDigitalPhotos.net

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