How to get a car loan for a used car

On free classifieds sites or in Trade-In salons, you can easily choose a pretty decent used car. The price level here is much lower than for new cars.

Agree that a used Toyota RAV4 or Renault Megane 2008 for 350 thousand is very good. True, the car may require additional repairs, but this fact does not deter new potential owners.

On the Vodi.su website, we have already written a lot about loan programs from different banks for the purchase of new cars. Now I would like to dwell on the issue of obtaining a loan for used cars.

The secondary car market is a normal phenomenon, not only for developing countries, but also for wealthy Europeans and Americans.

Trade-In programs have been working there for a very long time and there are no problems with buying or selling used cars.

Terms of bank loans for used cars

A used car is not a very profitable topic for banks. Indeed, unlike an apartment on the secondary market, a used car only gets cheaper every year. Therefore, banks are forced to put forward additional conditions in order to benefit from such loans.

Interest rates on used cars are usually higher. If on a car loan for a new car you usually pay from 10 to 20 percent per annum, then on a used car, the rate can reach 30 percent.

In addition, there are some hidden fees:

• commissions for opening a credit account in a bank;
• account service fees.

The down payment is also high: for new cars it is usually from 10 percent, and for old cars - 20-30%, some banks may require 50%. The loan term can be up to five years.

We also remind you that you can buy cars on credit:

• domestic - not older than five years;
• foreign - not older than 10 years.

Please note that this requirement does not apply to rare cars and Premium cars. Such expensive vehicles, like the Porsche 911 or the Ford Mustang Shelby, can be really expensive.

Without fail, the bank will require CASCO insurance, and in order to get it, you will have to equip the car with an anti-theft system - these are additional costs.

Types of loans for a used car

As we have repeatedly written on the pages of Vodi.su, there are two main types of loans:

• special car loan programs that apply to used cars;
• consumer non-purpose loans.

Many banks that cooperate with car dealerships offer Trade-In programs - a person rents an old car and receives a discount on a new one. All these used cars are put up for sale and you can buy them under the same conditions as new cars. You may not even need to go to the bank and write an application - all these issues will be resolved right here in the salon.

To apply for such a loan, you bring a package of documents:

• passport;
• the second document (foreign passport, VU, military ID, pension certificate);
• income statement;
• a copy of the work book with a “wet” seal.

If you are unemployed, you can bring a certificate of assignment of a tax number. You must have at least one year of experience in the last five years.

You will be given a questionnaire, and after filling it out, wait for a decision, it may take from half an hour to two or three days.

If you prefer consumer lending, then a passport will be enough, although a certificate of income will be an additional plus for you. A non-targeted loan has its advantages: you do not need to issue a CASCO, the car will not be considered a pledge, the title will remain in your hands.

Car loan programs

If you go to the official website of almost any Russian bank, you can easily find the terms of loans for used cars. But here we are again faced with the old problem - you will not find exact conditions on the sites, but there are a lot of offers like “no CASCO” or “no down payment”.

Here, for example, is the program from VTB 24 “Autoexpress used” (without CASCO):

• initial payment - from 50 percent;
• vehicle age - not older than 9 years at the time of loan repayment;
• only on cars of foreign production;
• loan term up to 5 years;
• rate - from 25 percent.

Another program from AyMoneyBank (without CASCO):

• interest rate 10-27% (if you immediately deposit 75% of the cost, the rate will be 7% per year);
• the purchase of a personal life insurance policy is mandatory;
• initial payment - not required (but the rate will be 27 percent);
• be sure to provide proof of income;
• the age of the borrower is 22-65 years;
• loan term - up to seven years.

AiMoneyBank, however, issues loans for cars up to 15 years old at the time of the transaction.

There are many more such programs from different banks, but they are all almost the same.

If you are really going to apply for a loan for a used car, then the Vodi.su editors recommend:

• collect the required amount for the down payment (30-60 thousand at a car cost of 250-350 thousand - not so much);
• apply for a loan for a shorter period (there will be less overpayment);
• buy a car through Trade-In - here all vehicles are diagnosed and they will tell you about all the shortcomings, or rather, the chance to buy an undamaged car increases.

Loading…