Car loan – knowing where you stand

Leasing is popular these days, but with leasing, the car does not become your property. As an individual, then, consider classic car financing. A classic car loan also has its advantages financially.

Advantage loan: control over your budget

With a conventional loan, the purchase of your car weighs less on your budget. According to the financing contract, your payments will be spread over the term of the car loan. So you know exactly how much you have to repay and the exact amount of monthly installments. Those installment amounts are fixed for the entire term of the loan. So there you need not expect any surprises.

Advantage: you determine amount of advance payment

You can limit the amount you borrow through a so-called advance payment. You can determine that advance amount yourself in advance – and whether you want to pay an advance anyway.

The down payment amount is the amount you are able and willing to pay yourself for your new car. That could be your savings, for example, or the trade-in value you receive for your old car. After all, the higher that amount is, the lower the loan needs to be. Then, of course, the amount you have to repay each month will also be lower.

Advantage: you determine the term

When signing the contract, you can choose terms from, say, 24 to 60 months. The term also helps determine the amount of the monthly repayment. Because if you want to repay a loan in a short period of time – say 24 months – the monthly amount is higher, and if you agree that you want to take a long time to repay the loan, say 60 months, the amount is spread out over more months and is therefore also lower.

Advantage: you therefore have an influence on the amount of the monthly instalment

You can’t change very much about the price of your new car. But with a (higher) down payment, you can reduce the loan amount and thus the monthly amount. And with a longer term, you can reduce that monthly amount even further.

You own the car

When you take out a loan to purchase a new car, you immediately become the owner of the car of your choice. This is different from leasing and installment plan. With leasing, the car does not become your property and you basically have to return the car at the end of the lease. And with installment plan, the car is not your property until you have paid all the monthly installments. Of course, with a loan you are also obliged to repay the full amount borrowed, but the car is yours from day 1.

Tricky matter

Loans and financing are a tricky business for those who don’t deal with it on a daily basis. Therefore, please contact financial specialists with questions. They can tell and explain everything about loans for the purchase of a new car. Feel free to pick one ahead of time and find out the trade-in value of your current car.