It is the most common form of financing and is normally offered by banks, credit institutions or finance companies. You can get a loan of this type only if you are able to demonstrate a certain financial reliability and the ability to repay the debt in due time. Interest and additional costs may vary between financial institutions.
Hand signing documents
Remember that the institution will ask you to use one of the assets in your possession as a guarantee. Your assets will then be put at risk along this road.
Benefits: A loan can be obtained quite easily and the funds are made available almost immediately.
Disadvantages: The risks and interests could be very high.
- Request a loan from a friend or family member
Another option is to request a loan from a friend, family member or acquaintance, thus avoiding contacting a financial institution. In this case it is very important to discuss the loan in detail and put what was agreed in writing so as to avoid future discussions.
Advantages: You do not have to undergo any financial procedure and you have the possibility to return the loan more flexibly. Depending on the type of relationship that exists between you and the person offering you the loan, the interest may be very low or zero.
Disadvantages: There is a risk of endangering the family or friendship relationship.
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- Purchase for purchase
This method of financing consists mainly of purchasing the vehicle in installments. By signing a contract with the dealer, you agree to redeem the car within a set period. Meanwhile, you have the right to use the vehicle by paying in installments up to covering the entire cost of the vehicle. You will be officially registered as a usufructuary, as well as responsible for insurance and maintenance, while the dealer will legally be the owner until the last installment is paid. Once paid, the machine will officially become yours.
Advantages: Dealers often offer this alternative because it is very simple and fast. Payments can be flexible and the initial payment required is not very expensive.
Disadvantages: Considering the interest, the final price you will have to pay to buy the car could be very high. Furthermore, unlike a flexible loan, you will not be able to change your car with a newer model.
- A flexible loan
Some car manufacturers offer the possibility of obtaining a flexible loan. This solution is similar to the buy-to-buy, but with some differences. Unlike the previous method, when you complete the payment of the installments, you can choose whether to keep the car. You can return it or exchange it for a model of the same house by paying the difference.
People signing a loan
You could also get a discount for the purchase of a new model. This solution is normally offered for some specific models.
Advantages: At the end of the contract, you can change your mind about the car you would like to have. You have the advantage of dealing with a large car manufacturer.
Disadvantages: The terms of the contract could be less negotiable than those of a buy-in purchase.