Nowadays, a car has become a necessity for almost everyone. First, it makes traveling both long and short distances easier, you'll be able to buy more things because they're easier to carry, and you'll save time instead of waiting for other means of transportation. Second, a personal car provides a certain independence. You will be able to go anywhere when you want without depending on the schedule of other means of transport. At the same time, in case of emergency it will be much easier for you to offer help.
But the truth is that a car involves a major investment, both as a purchase and from the point of view of the procedures to put it into circulation. And after this point a car involves certain regular expenses in the form of fuel costs.
One way you can use to purchase a car is by applying for a car financing program through credit. That way, you'll be able to have a car at your disposal even if you haven't raised all the money for it.
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- Car finance - what is car finance and what information you need to check before
- The advantages of car financing through credit
- Disadvantages of car loan financing
1. Car finance - what is car finance and what information you need to check before
The first time it would be good to check what car financing means and what is the best option for you. There are several offers on the market for credit financing for a car, some more advantageous than others, but you have to pay attention to all the details.
What is the total amount you have to pay
You should check what are the advantages of car finance offers from different companies. For example, there are companies that offer the possibility of obtaining a loan without a down payment. If you choose an offer that involves depositing an advance on the part, check if there is a minimum that you must meet. The most important thing is the interest rate. Calculate the total amount you will pay until the end of the loan, so you can see which offer is more advantageous.
Check the annual effective interest
In addition to interest and possibly a down payment, there are other expenses that will arise along the way. The current effective interest rate (APR) is an indicator imposed by the European Union that helps show you what your costs are during a year when applying for a loan. This index can help you make the right choice regarding which credit offer to choose. Lenders are required by law to show you what the APR is for the loan being proposed.
Check if the car will be pawned
It would be a good idea to check what your rights are on the car you purchased on credit. Most companies that have car sales services have partnerships with various banks or companies to also offer the possibility of car financing through credit. To ensure that a person will pay the loan in full, the companies choose that the purchased automobile be pledged, that is, it cannot be sold to another person until after the loan is paid off. If you're not sure you'll keep the car for the duration of the contract or don't want to feel tied down, then you can choose an offer that allows you to sell the car when you want. Also, check all the rights and restrictions you have with the purchased car. 
The advantages of car financing through credit
- You will have the desired car in a very short time;
- You will be the owner of the car right from the start;
- It does not create a financial burden at the moment;
- You will be able to pay a monthly installment for the car for a period of time chosen by you;
- You have the possibility to pay off the loan faster;
- The car will automatically be CASCO insured;
- The monthly rate is fixed.
Disadvantages of car loan financing
- For several years you will have installments at the bank;
- You will pay more than the original price of the car by adding interest;
- You will have more fees to pay and there may be more monthly fees;
- If there are damages to the car, you will have to pay for them yourself;
- You may not be able to sell it until after the loan is over;
- The car will wear out and depreciate until you pay off the loan;
- In the event of a total loss accident and the car cannot be repaired, you will still have to pay off the loan.
If you want to purchase a car without having to wait until you collect all the necessary money, then there are several options you can use. If you want to be the owner of your car from the beginning, then you can check if you can apply for car financing through credit. There are certain advantages and disadvantages in using such a form, but the main advantage is that it helps you to purchase a car quite quickly and does not represent a big financial burden at the moment.
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