So it's time to buy a car! New or used, it honestly doesn't matter, because either way it's an important purchase. And it makes sense to be interested in buying a car with promissory notes (installments), because for most of us financial difficulties are a daily reality, especially now.
In addition, the Banks have not yet opened the lending taps while the financing criteria remain strict. So, how to finance your car purchase? Let's see your options.
Buying a car with promissory notes & without a bank: Is it possible?
Today in the car market, things seem to be divided. About 1 in 2 buys a car with cash.
However, if you do not belong to this category, it makes sense to be interested in buying a car with installments, ideally without involving a bank.
And indeed, there is a chance that a dealer will give you the possibility to buy a car with promissory notes.
In this case he himself plays the role of the bank. In other words, he assumes the risk, as he must pay the amount of the value of the car immediately to the dealer, while you will pay him over time, so he must have a lot of liquidity.
There is no rule, however the most likely to get a car with bonds is in the used sector and in the countryside, where the conditions are different (fewer sales, etc.).
What to look out for when you put bills without a bank?
Just because you don't mess with banks, doesn't mean everything is rosy.
In case you find a company that offers this possibility (1-2 are left on the market) or a dealer, you should keep the following in mind:
- The interest you will pay through promissory notes may be double the bank interest. If, for example, the interest rate through bank lending is 6.5%, through promissory notes you can pay interest up to 13%.
- The purchase of the car with promissory notes is done in two ways: either through a private agreement, or through a contract. In the second case, you incur additional costs, as a notary is required.
- You should be very careful in the terms of the contract, such as e.g. in which cases you can request a change of terms or what happens if you delay a payment. And of course you forget the "we'll figure it out" with the merchant...
What options are there in buying a car on installments (with bank mediation)?
Taking notes from the car dealer can be risky (for the dealer and for you). Therefore, there are other traditional and tried and tested solutions that you can consider.
#1 Buying a car with a bank loan
Making a car your own through a bank loan remains very high in preferences. So, you buy the car and then pay your loan installments normally.
All authorized car dealers provide loans and all dealerships work with a bank. When we say bank we mean all the well-known Greek banks (Eurobank, Alpha Bank, National Bank, Piraeus Bank, Optima Bank and Attica Bank).
#2 Buying a car through "car bank"
"Car banks", as they are called in market slang, are the banks that deal exclusively with the purchase of cars. These are Volkswagen Bank, BMW Bank and Leasys (formerly FCA Capital).
2 Examples of loans to buy a car
#1 Eurobank car loan
Eurobank gives you the possibility to buy the car or machine you want by choosing a fixed or variable interest rate.
For example, for new cars the interest rate is set at 9.50%.
If we assume that for a second-hand car you get a loan of 10,000 euros, the nominal interest rate is 10% and you choose repayment in 60 months, then your installment comes to 215.43 euros.
You can repay the loan in equal or unequal installments every 1, 2 or 3 months.
#2 National car loan
National Bank charges an interest rate depending on the borrower's contribution. For example, for a loan amount of 15,000 euros and a 40% down payment from you for the purchase of a new car, the total interest rate is 3.60%.
In other words, you will pay an installment of 273.37 euros per month for 5 years. In comparison, if for the same amount the advance you will give is 20%-30%, the interest rate rises to 4.55% and your installment to 279.70 euros, again for 5 years.
What should you watch out for with car loans?
Caution and caution again!!! In no case do special conditions apply with regard to financing from banks, either "traditional" or "automotive banks".
This means that all the usual banking criteria apply for the car loan to be approved. Therefore, if the bank decides that it should not give you a loan... you painted it.
For example, it is not certain that if you ask for a loan from Volskwagen Bank for the purchase of a Volkswagen car, it will not be checked whether you are a bad borrower.
📌 Those who have entered the "Katseli law" or have arranged bad loans, are generally excluded from bank lending. And of course those who are in the "black", as it has prevailed to say, Teiresia.
From there it's up to the merchant. In the market you will find dealers who offer competitive financing packages and give you the possibility to acquire a car with up to 0% down payment and/or with up to 72 months for repayment.
If you want to request a consumer loan to buy a car, we are here! At insurancemarket.gr you compare free loans from the biggest banks, choose which one suits you and when you're ready, go and apply.
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