To purchase a car on credit, you can use various bank programs. There is a standard target loan, and there is a non-target cash loan. Sometimes it is difficult to determine which of the programs will be more profitable and optimal, each product has its own advantages and disadvantages. What should a potential car buyer choose in the end: a car loan or a cash loan? To sort this out, I decided to do a little research.
Pros and cons of a car loan
First, let's take a look at the standard car loan program. This is a targeted loan, which is directed strictly for the purchase of a car, that is, the borrower does not receive money in his hands, the bank transfers the funds directly to the seller to his bank account.
Pros of a classic car loan:
- the rate for car loans is often slightly lower than for a cash loan. This is due to the fact that when a car loan is issued, the purchased car remains pledged by the bank;
- the opportunity to participate in various government subsidy programs that periodically appear on the market. A car loan under the state program implies reduced rates or other benefits;
- regular promotions from manufacturers for buyers who apply for a car loan, even offers for installments are possible.
Cons of a car loan:
- restrictions in choosing a car. Basically, banks issue car loans only for new vehicles. If banks are ready to provide a loan for a used car, then the requirements for the age of the car are usually announced (for example, not older than 5-7 years). A car loan for a used car is possible, but only through salons specializing in this direction;
- it is impossible to get a loan for a car sold by a private person;
- most banks require a CASCO policy, and its cost reaches 10% of the purchased car and more. The policy must be bought annually until the car loan is paid off. If the bank assumes the possibility of abandoning CASCO, then this leads to an increase in the interest rate;
- obligatory availability of own funds for making an initial payment, and this is at least 10-30% of the price of the car. You cannot apply for a car loan without a down payment;
- longer registration process.
Car loan registration methods: car dealership or bank office
Obtaining a targeted car loan is carried out according to two schemes. You can buy a car on credit directly in the showroom or contact the bank in advance.
- Car loan in the showroom. A potential borrower chooses a car in the showroom and applies for a car loan on the spot. The salons usually work with several banks, representatives of which are present on the spot. The client provides the required package of documents and undergoes a standard survey. If approved, he visits the loan manager at the salon again, where the transaction is completed. The disadvantage of this method is a limited number of banks, so this type of car loan may turn out to be a little more expensive, but the registration process itself is more convenient.
- Office decoration. Before contacting a car dealership, a citizen chooses a bank and turns to him. The application can be completed online or contact the office of the selected bank. After providing the required package of documents, the review process goes through. If the application is approved, the possible loan amount is announced to the borrower, within which he chooses a car. After choosing a car in the cashier of the salon, the borrower pays the amount of the initial payment and receives a statement, with which he again goes to the bank. After the conclusion of the contract and the transfer of funds to the seller, you can pick up the car. The method is longer, but you can find the most advantageous offer.
Features of a consumer loan
Answering the question which is better for a car loan or a consumer cash loan, a simple consumer cash loan of an inappropriate type should also be considered in detail. It is offered by almost every bank, which speaks of a wide range of programs. A citizen applies to the bank, provides documents, waits for a decision. If it turns out to be positive, then the borrower signs a contract, receives cash and can spend it as he pleases. No reports or requirements. After receiving the money, you can send funds to purchase any car without restrictions.
Advantages of a cash loan before a car loan:
- misuse of funds. This means that you can buy any vehicle without restrictions: any age, manufacturer, from any seller;
- a wide range of programs, which contributes to the selection of the most advantageous offer;
- there is no need to purchase a CASCO policy;
- no down payment is required, it is not necessary to have your own funds on hand;
- a consumer loan for a car is issued more quickly.
What is more profitable than a car loan or a cash loan? There is no definite answer to this question. To do this, you need to study the offers of banks, make calculations on a loan calculator, this is the only way to determine the profitability of a particular design option. But consider the additional costs as well. You can find the most profitable car loan, but it becomes more expensive due to the compulsory CASCO. Consider the cost of the policy, which must be paid annually. So, in three years only for CASCO you will have to pay at least 100,000 rubles or more (depending on the car, its cost).
The best banks for consumer credit
When deciding whether to get a car loan or a cash loan, many citizens make their choice in favor of a conventional cash loan. There are many offers, and to make it easier for you to make a choice, I have collected the best bank programs. If you are going to get a simple consumer loan for a car, pay attention to the products that are popular among borrowers in 2016.
1. Sovcombank
To buy a car, you can use the offer of Sovcombank "Standard Plus". This is a classic non-targeted cash loan, which is issued even to citizens of retirement age (the maximum age of the borrower) - 85 years. Under this program, you can get up to 200,000 rubles. The offer is relevant for citizens who cannot provide certificates from work, they are not needed during registration, but the bank also assigns an increased rate.
2. Raiffeisenbank
In this bank, you can get a cash loan, in an amount of up to 1.5 million rubles, for a period of up to five years. There is a limit on the minimum amount of issue - 90,000 rubles. Raiffeisenbank provides loans to citizens aged 25-65, income certificates are required. The bank is serious, large and demanding, therefore the rates are low.
3. OTP Bank
OTP Bank specializes in issuing cash loans, offering flexible terms of registration. The required package of documents depends on the loan amount: with a loan amount of up to 200,000 rubles, no certificates are needed, with an amount of 200,000 - 400,000 rubles, a work book certified by the employer is needed, with an amount over 400,000 rubles, a certificate of income is needed (the maximum credit limit is 750,000 rubles). The rate also depends on the documents provided; without certificates, the rate is increased. The bank works with citizens aged 21-65 years.
4. Renaissance Credit
The bank is distinguished by its loyalty and minimal criteria for borrowers, in this bank you can get an express loan in cash or arrange a loan without certificates. The maximum loan amount is 500,000 rubles, there are special offers for pensioners (the limit is up to 200,000 rubles). The bank works with citizens aged 24-70 years. The rates cannot be called the most profitable, but the likelihood of approval is very high.
5. VTB Bank of Moscow
A large bank that offers serious and profitable loan programs. His cash loan can reach 3 million rubles, as a result, you can get a loan for a new car of a higher class. The minimum loan amount is 100,000 rubles, the bank sets the rates low, the loan term is up to 7 years (other banks offer loans for up to 5 years).
6. Citibank
Citibank offers flexible conditions for obtaining a cash loan. When requesting an amount of up to 600,000 rubles, you can do without providing certificates, but their absence affects the rates. In general, in this bank you can get up to 2 million rubles at average interest rates.
My opinion
What to choose: a car loan or a consumer loan? It's up to you to decide. In one case, it will be optimal to issue a car loan, and in the other, a cash loan. But judging objectively, in many respects a cash loan wins over a car loan. It gives more freedom to the borrower: you can buy any car, no need to report spending, and there are many more programs. Now many banks have removed car loans from their product line altogether, as they are becoming less and less in demand. Even Sberbank does not have a classic car loan now. When choosing a bank and a program, read reviews, make calculations, study the offers of your salary bank. In many banks, you can apply for a cash loan via the Internet, which makes it even easier to apply for a loan.
