The purchase of auto financing is a loan of a finalized nature. Rates and conditions may vary depending on the rules of the lender. In general there is a tendency to apply higher rates to loans for the purchase of used cars, operations considered to be at greater risk of insolvency.
Car purchase with financing: the maxi installment option
When it comes to purchasing auto financing, the maxi installment option is called into question. What’s it about? In the possibility of buying a vehicle by paying an initial advance, proceeding with the payment of the installments and honoring the debt in a single final solution.
The maxi installment, particularly advantageous in the event of frequent car changes, allows the debtor to return the vehicle to the dealer before the natural expiration of the loan, thus closing the contract.
Car purchase financing: some concrete examples
To get the clearest ideas about auto financing purchase it is useful to make some specific examples.
Let’s start with the analysis of the credit product of Astro Finance, which allows, in the event of a request for $ 14,000 for the purchase of a used car, to dilute the installments in a 7-year amortization plan and to pay every month 209 $ (TAN and APR corresponding to 6.65 and 6.86%).
By keeping the request of the same amount firm, it is possible to analyze the loan, a Fiditalia product. In this case, again with a 7-year amortization plan, the monthly payment would be $ 223.26, with TAN and APR of 8.72 and 9.64%.
To give an example of financing for a new car we can consider the Compass proposal which, in the event of a request for $ 13,000, would provide for a monthly installment of $ 217.30 (TAN and APR of 9.90 and 10.95 %).
Purchase car financing rate 0: here’s how it works
The purchase car loan rate 0 provides a loan with the zeroing of the rate. This situation, in some cases, involves an increase in the APR. Only when both rates are zeroed can we speak of a real 0 rate.
Several car manufacturers, including Fiat and Volskwagen, offer zero rate loans with insurance charges included in the APR and monthly installments that rarely exceed $ 200.
Car purchase financing or leasing: what to choose?
In several cases, there is a choice between buying car financing or leasing. What is the best alternative (in the second case, remember, you pay installments for an asset that you do not own and that you can redeem at the end of the contract)? Leasing is a very advantageous option for freelancers and entrepreneurs.
These subjects, being holders of a VAT number, have the possibility of deducting from IRPEF up to 50% of the costs incurred for the installments and to change vehicles more easily.