2023-10-20 14:02:04
Currently, buying a car outright is very difficult, at least in Spain. This assumes having to finance part or all of the vehicle, with what this entails: extraordinary expenses such as the famous and dreaded interests. The Bank of Spain leave us some advice before signing a financing contract: watch out for dealers.
Normally, each dealer makes an agreement with one or more banks and then offers us one or another financing option according to the data we provide to them. In the event that we do not want to finance it with the bank offered by the dealer, we can also do it with our bank, paying cash to the dealer, but this will lead to an increase in the price of the vehicle.
When we finance a vehicle, the price is usually cheaperbut that’s because with the interest and installments, we end up paying the same as if we paid the car in cash, and even much more, because the interests are getting higher and higher.
Car registrations in Girona grew by 7% in one month and exceeded 900 units
Before doing any financing procedure, we have to take several aspects into account.
The Bank of Spain explains the steps to follow and gives us some advice before signing a financing contract
The lending institution must assess our financial solvency
In addition, they must explain to you in detail, fees, additional services related to the loan and any extraordinary expenses or fees
They must provide you with a pre-contractual document, before signing the contract, in which you will have all the points mentioned and all its conditions. This pre-contract is made through the European Standardized Information document (INE)
It is very important that the three points mentioned are carefully followed and that, when you have the pre-contractual document, check it calmly to see if everything we had talked about is covered in it. And if we can, it would also be very positive that, apart from looking with this bank, let’s look for another financing option to see what they offer us.
Each bank offers one or another terms, so it’s important to look at several options before signing anything
Financing the vehicle from the same dealer: things to consider
We remember that, the price varies depending on whether we finance it with them or buy it cash (either because we have the cash or because another bank has granted us the loan, but at no time have we done so from the same dealer).
In the case, we finance it with the dealer, they will lower the price of the vehicle and give us extra discounts, But will we really pay less? Here it is important to pay attention to the following aspects:
The initial entry we will pay
The commissions
Financing costs
The monthly installments
The final feeif that is the case
Companies expect less bank financing and mergers this year
We buy, we have to add it all up and look at the years we will be paying these fees. Then we can see “the real value” of the vehicle that we are buying At this point, we will realize that we are paying, even, more than if we paid it in cash.
To conclude our analysis, the Bank of Spain recommends that we pay attention to the permanence clauses, which oblige you to keep the loan for a certain time and if you want to cancel the credit before the due date, because we have obtained more capital, for example and we want to finish liquidating the debt, we will have some penalties, which could be losing the discounts we were given at the beginning of the contract.
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