How To Finance A Car

Buying a car is basic today. The reason is that a car gives you the necessary freedom to travel when you want, to take whoever you want, and it is more comfortable than public transportation.

In addition, the car is a work tool on some occasions, for these reasons, one of the first expensive properties that are acquired in life is a vehicle.

The bad thing is that cars are usually expensive, so expensive that they can’t be paid for in one go. The solution to this is financing, that is, having the chance to pay for the vehicle in monthly installments, which is more comfortable for most people.

The bad thing about financing is that you have to walk a lot to the parrot, since it is difficult to find good financing that does not abuse fees or interest. However, I am going to explain how you can properly finance your vehicle.

What do you need to finance a car?

• Being over 18 years.
• Have a payroll or a pension.
• Not be on any list of defaulters like ASNEF.
• Driving license.
• Some money saved for the entrance.

Instructions to finance a car

1. Bank financing: This is the most basic financing to buy a vehicle. The bank is there to lend money to people who need it, however, you have to be careful as it has many traps. The bank will give you the money, which you will pay in cash to the dealer or individual.
   1. Always fixed interest: Do not trust variable interest, since it can greatly inflate the loan fee. Fixed interest guarantees you a fixed fee per month, which will make you have better planning.
   2. Ask as little as possible: If, for example, the car is worth 3,000 euros and you have 1,000 saved, you can ask for only 2,000 euros, so you will save a lot.
   3. Many or few months: If you put it for many months, you will end up paying more interest in the long run, but the fee will be less. If you put it to many months, you will pay less but the fee will be high.
   4. Guarantee: A guarantee is like having insurance that covers the expenses of the loan in case you cannot pay. A relative can guarantee you or you can guarantee possessions such as your house. In case of not being able to pay the loan, it will be covered with the guarantee. Having an Aval will greatly increase the chances of getting the loan.
2. Financing at the dealer: Nowadays, the dealers themselves can finance the vehicle for you. It usually works out better than bank financing.
   1. It is faster: If they see that you meet the requirements, they will give you the financing immediately, faster in the banks.
   2. Less requirements: They are selling cars, therefore they will surely put less trouble when it comes to selling, especially in these times.
   3. Pive Plan: The pive plan is a government plan that will give you money for your old car as long as you buy another one from the dealer. You can save a lot of money if you use it well.
3. Private financing: If you are a friend or relative of the owner of the vehicle, they can let you pay for the car little by little or give you the car in exchange for doing some task or work in exchange. Of course, do not expect a stranger to accept since he does not know you, he is not going to trust you to pay him in installments.
4. Mini credit entities: A mini credit is a type of credit that is not very large. They usually occur in entities such as cofidís and have the following characteristics.
   1. Low requirements: Some do not even take into account that you are on the list of defaulters. Others with having some type of income are worth it (without payroll) and others will not ask you for a guarantee.
   2. High interest: In exchange for the low requirements, they will charge you a fairly high interest (between 10 and 20%), for which you will end up paying much more money.
   3. Up to 3000 euros: As the ads say, do not expect to buy an overpriced car using these entities.
   4. Short terms: At most they usually leave you two years to pay, but since it is a small amount what they give, nothing happens.
   5. Fast: They are usually granted in less than a week (24 hours in some cases), so they are ideal if you are in a hurry.

Tips for financing a car

• Be realistic: Do not buy a new car for 10,000 euros if you do not have a high salary or have family responsibilities. With a used car of about 3,000 euros, you can do the same as you would with a new car of 10,000, which will also load you with debts. So leave your ego at the dealer’s door and choose properly.
• Make the most of the pive plan: A good pive plan practice is to buy a very old car that costs little (between 200 and 800 euros). You will then take it to the junk dealer and you will have a discount of 2000 euros on the car from the dealer, therefore you can get more than 1000 euros of savings for free.