Car loans Advantages and Disadvantages

Posted on Oct 22, 2000 08:15:27 AM

Thanks to any car loan, not even the most secured citizen can make even the recent luxury means of transportation.
The main advantage of auto loan is certainly an opportunity to buy a car once, at a fraction of the cost, and the rest to pay over time. In this case, the initial payment is usually 20-30% of the cost of the car, despite the sometimes fabulous hype. The remaining amount paid by the bank, which you then paid back with interest.

The loan is beneficial if, for purchases you do not have large sums of money. Taking a big loan to buy a car, you really win: because if you saved their money, then the inflationary losses likely would have exceeded the cost of mortgage payments. However, if in future the bank suddenly reduce interest on loans, then you would pay for the old, higher, since they are fixed. This fact may disappoint economize motorists.

Using the loan, a person can afford to buy a more expensive car than if he bought it for available funds.

All the advantages of a car loan turn into months of the duty to pay considerable sums for the loan, which eventually greatly exceed the cost of the car. This is a major drawback.

By the standards of the civilized world bank interest in our country are prohibitive. Bank managers explained this by saying that Russia has no “long money” that is, our currency is not stable. However, rates on loans in foreign currency, we at least are high (they sometimes reach 19% per annum). All the more strange looks these words against the background of the authorities about financial stability.

The procedure for obtaining credit is also an important drawback of the system described lending. This is primarily due to the inability to get a loan if the person’s income reaches a certain level. In many banks, you will not even talk, if your official salary is below 12-15 thousand.

No one involved in lending to buy used cars. The only exceptions are fresh foreign cars, not older than five or six years, the cost of the cheapest of which is already considerable (at the level of cheap domestic). Banks are still wondering, “skim the cream”. After all, the overhead costs of providing credit to car worth $ 5000 are exactly the same as a car worth 30,000 dollars. Is it worth messing around with small change? – As reason banks are automatically excluded from circulation of people with low incomes. Indeed, the notion of “middle class” in Russia is paradoxical and, in any case involves a group of people with incomes well above average.

buying, loan amount, minus the bank, the cost of the car,

1. Non-interest car loans and loans with no down payment
2. Betting Express loans
3. Preferential car loans
4. What is especially syndicated loans
5. Loans to individuals Tips for getting

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