Some consumers pay off a loan when they need a new car. What needs to be considered when financing a new car despite an ongoing loan?
Borrowing from existing loans
In principle, it is possible to borrow again despite existing loans. The new lender compares the total of the monthly charges with the disposable household income. If the result indicates that proper repayment is guaranteed, there is nothing standing in the way of a new car loan despite a loan. Dealer banks obviously make the necessary assessments differently than commercial banks and more often come to the conclusion that financing the car purchase is possible.
The interest of the bank belonging to the vehicle manufacturer’s group in good sales figures certainly contributes to this. Consumer loans are particularly critical when it comes to borrowing new vehicles, while existing real estate financing is not an obstacle to vehicle loans due to rent savings.
Influence the credit decision with the loan structure
If the traditional form of car financing is not possible due to an existing loan, alternatives are available. The vehicle buyer can agree on partial financing of the car and a final installment to be paid later. This reduces the loan amount. At the end of the contract and the due date of the final installment, he agrees a date on which the existing loan will be repaid so that it is easy to take out a new loan for the final payment.
A variant of vehicle financing with a final installment is three-way financing. In this case, the buyer can choose to pay or finance the final installment or return the car at the end of the term. Despite a loan, it can only be used for a car loan to a limited extent, because in addition to the loan amount, the term of the loan is also reduced, so that the loan rates are only marginally lower than if the car was fully financed.
Pay attention to alternatives
Anyone who needs a car loan despite a loan can obtain approval for the loan by choosing a vehicle other than the one originally intended. A cheaper car compared to the favorite model significantly reduces the loan amount. Demonstration vehicles and vehicles with day registrations used by the dealer were only moved a few kilometers, so that despite their formal validity as used vehicles, they have the quality of a new vehicle. Annual cars were driven by employees for about a year.
They may have an unusually high mileage for the short period of use, but they have been cared for reliably and, thanks to their attractive price, represent an alternative to a new car. Special offers are another way of reducing the monthly charge on car loans. Interest-free or extremely cheaply financed vehicles are mostly discontinued models and later only achieve low used car prices.