Car loan for a used car without a down payment - features, conditions and reviews

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

A used car loan comes to mind when you don't have enough money for a new car. All kinds of advertising also contribute to these thoughts. Of course, a car loan for used cars has its pros and cons, which we will discuss below.

Cons of a car loan

Each bank wants to protect itself from losing money as much as possible and takes all measures for this. And to some extent, this is a disadvantage for the borrower. Let's take a closer look:

1. There are a lot of refusals for this type of loans. This is due to the fact that fraudsters or unscrupulous borrowers most often choose this particular loan option. That is why no more than forty percent of applications are approved.
2. Large payment amount. This item is also the reason for refusal because there is a monetary norm per person. It ranges from ten to fifteen thousand and applies only to dependents (children, non-working family members). If the amount of income, taking into account the loan, does not cover the expenses for dependents,then the loan is denied.
3. Due to high risks, the banking organization increases the interest rate.
4. Reducing the payment period. Most banks agree to issue a car loan for used cars without a down payment, but for a much shorter period. In order not to risk money, the bank can reduce the repayment time to two years.
5. It will not be possible to get a car loan for used cars without proof of income.
6. It will not be possible to get a loan in one day, because the banking organization will very carefully check the borrower for the ability to repay the loan. This usually takes a couple of days.
7. Among other things, a car loan without a down payment on a used car can reflect badly on the borrower's credit history. Subsequently, the lender has a chance to be refused a large loan or mortgage.
8. High cost of insurance. Any bank, when approving a loan, obliges the borrower to issue a full CASCO. Some lenders also ask for disability or life insurance.

Pros of a car loan

Unfortunately, the pros of a car loan without a down payment on a used car are much less than the cons, but they are also worth considering.

1. The opportunity to buy a car that costs more new. The same applies to the equipment of the car.
2. No need to save money and wait, you can take a loan and immediately make a purchase.
3. The machine can be used immediately without waitingnothing.
4. Inflation or a pendulum of prices and exchange rates has no effect.
5. No risk of being robbed or scammed.

Loan terms

There are points that determine whether a loan offer is profitable or not. This is:

• down payment amount;
• compulsory borrower insurance;
• commissions, which are additionally imposed by the bank;
• loan term;
• early repayment option;
• providing.

Still, no matter how much you want, but most banking organizations require an initial payment of ten to thirty percent. Yes, there are lenders that will issue a loan without cash collateral, but you will have to work hard to find them.

Important points

A car that is purchased on credit is its security. A pledge agreement is made on the car and the vehicle passport is in a banking organization. And only after repayment of the entire debt or upon the occurrence of an insured event, the borrower receives the documents for the car.

Do not forget that used cars cannot be bought under government lending programs. If the borrower chose the car from hand, then the only way out is to search for car dealerships with promotions for interest on the loan.

If the loan term is from three to five years, then this is a profitable car loan for used cars.

Who can apply for a loan

Any credit organization has not only its own conditions, but alsoindividual requirements.

For example, it may be difficult to get a loan from those who have previously violated the terms of payments or are too young. The age threshold, most often, begins after twenty-three years.

Naturally, before issuing a car loan for used cars, the bank checks the car, its technical condition, age, number of previous owners, mileage. It is also not surprising that banking organizations prefer to deal with machines manufactured abroad. This reduces the part of Russian used cars that are pledged. The conditions of a car loan for used cars only contribute to this.

Restrictions

The Borrower must meet the following criteria:

1. Must be at least twenty-three years of age.
2. Permanent job with more than six months of experience.
3. The borrower must be a Russian citizen and have a permanent residence permit.
4. Satisfactory credit history with no serious violations or delinquencies.

The car should be:

1. No older than eight years old.
2. Foreign production.
3. Have no more than three masters.
4. Be in good technical condition.

Where can I get a car?

Banks provide a car loan for a used car in showrooms. This is because cars are checked there, and the bank has less risk in issuing a loan. To borrow a car from a private person, you will most likely have to take out a consumer loan with a higherpercent.

Car loan at Sberbank

Conditions of a car loan for a used car at Sberbank in past years were quite favorable. Over time, this banking organization moved away from issuing such loans and transferred them to a subsidiary company, Setelem. With all neoplasms, the loan has pleasant conditions.

Loan characteristics:

• issued for 5 years;
• a loan can be obtained for no more than three million rubles;
• requires driving license or passport to apply;
• the application is considered no longer than half an hour;
• the initial payment is present, but it is less than in other banks - only 20 percent of the amount;
• Preference is given to foreign-made cars.

Government programs

A car loan for a used car in St. Petersburg, Moscow or another large city is quite difficult to find. And in order to decide on the method of buying a car, you need to compare all possible programs. For example, government offers for new and used cars are different.

options	new car	used car
loan term	three to five years
interest rate	starts at fourteen percent or completely absent (if there is government support or production discounts)	fifteen to twenty percentper annum (reduced only if there are promotions in the salon or the manufacturer provides a discount)
insurance	life insurance of the credited, CASCO	most often compulsory life insurance (very rare refusal), CASCO

Many manufacturers are developing a whole strategy to attract buyers and improve credit conditions, which are actively offered by managers of official car dealerships. Below we will analyze in detail several car brands.

Audi

Today, this brand is part of the Volkswagen group. Loans can be issued in their own bank in Russia - Volkswagen Rus Bank. Their main name is "AudiCreditPlus". It is interesting that all the main conditions depend on the set of documents of the borrower.

So, for example, when providing a full package of documents, the borrower can count on an interest rate of ten to twenty percent for a period of five years.

If the car was purchased outside the promotion period, the loan period is reduced to three years, and the down payment is increased to forty percent of the total amount. Under favorable conditions, it can be fifteen percent of the cost of the car.

When not all documents are provided, the conditions change. The interest rate now ranges from nineteen to twenty-one percent. The remaining conditions do not change.

Kia

Korean cars todayare gaining popularity. To attract even more buyers, manufacturers have developed an author's program called "KiaFinance". Under the program, you can buy a car in two banking organizations - RusfinanceBank, "Cetelem".

The first will offer an interest rate of twenty percent for a period of five years with a down payment of twenty percent.

In the second, the annual interest ranges from twenty-one to twenty-four. The loan term is not more than five years with a contribution of thirty percent of the cost of the car.

Skoda

Volkswagen Bank can get a car loan even for a used car, but only when the car is not older than five years. Another criterion is the presence of no more than two owners. The maximum loan term is five years, but it depends on different programs.

Standard includes a term of five years, an interest rate of eighteen to twenty-one percent, an initial payment of at least fifteen percent of the vehicle price.

Promotional program is an annual rate of fourteen - seventeen percent. The first installment is not less than forty percent of the cost, and the loan itself is issued for no more than three years.

As you can see, it is difficult to get a car loan without a down payment for a used car, but if you try, there is a way out.