In addition, the borrower can purchase both new and used cars. But it is not always possible to present it. If a potential borrower is really having trouble arranging a car lease, then the best way out of the situation will be a car loan. If you are in doubt as to which financial instrument is most suitable for you, we recommend using online loan and leasing calculators to compare the monthly payment amounts for both products.
Car leasing does not lose its position in the TOP as the most successful car purchase method, but at the same time this financial product is offered in a broad classification, where each sub-type can differ from each other with the amount of financing, car age and other criteria.
We choose a suitable car leasing category
If you want to buy a 10 year old car for 5000 USD, you will not be able to apply for car leasing, as the minimum amount of financing for car leasing starts from 7000 USD. If you have savings and you only need to buy 4,000 USDos for your purchase, you will hardly find a suitable leasing offer .
If the car costs around $ 15,000 and you have no savings, you should not expect car leasing here either, as at this price you will have to make a down payment of at least 10% of the price of the car you are buying. Also, keep in mind that at the end of the leasing period, the car you purchase cannot have a specific number of years (which is determined individually by each lessor).
What to do when car leasing is not possible? In such situations, the only way out is to apply for a loan. In the case of a loan, the lender will not have strict conditions regarding the condition of the car, only the borrower’s solvency and collateral liquidity will be in their interest.
Auto loan is simple and beneficial
According to the Latvian Loan and Credit Bank, as soon as they released their new auto finance program, they already secured more than 1,000 auto loans in the first months. Based on creditor statistics, the average amount of each car loan was 4,000 USDos. Almost all borrowers who used this program noted the significant benefits of this financial product:
- When the car loan is fully repaid, the borrower becomes the full owner of the car .
- The maximum amount of funding is 500 USDos.
- The borrower has the right to purchase not only the car but also any other type of vehicle (quad, motorcycle, etc.) which is intended for registration in the CSDD.
- There is no obligation to make a down payment.
- There are no age restrictions on the car.
- The credit agreement can be signed electronically at the official bank resource. The agreed auto loan amount will then be credited to the borrower’s account.
- Auto loan does not require any additional tasks or CASCO policy.
How to Find Out the Benefits in 5 Minutes
It is relatively difficult to calculate the expected cost or benefit of applying for a car loan if you are not a bank employee. But with the advent of online loan calculators, the situation has changed dramatically. Let’s say you are interested in several car financing deals at the same time, but you have a hard time figuring out which will work best for you.
So, for comparison, we open each creditor’s website, choose the financing program we need, and enter our data into the existing credit calculator. Usually this data is the price of the car and the desired loan repayment period.
Then press “calculate” and immediately receive the monthly payment amount. We do the same on each creditor’s page and compare the amount of payments. The lowest payment will prove to be the most advantageous offer.