The car loan without a processing fee can be a little cheaper in the annual percentage rate than comparison offers. The processing fee is included in the annual percentage rate spread over the entire term. However, the elimination of fees is not the only way to make a loan cheaper. Everyone can contribute to getting their vehicle financing cheaper. A comparison of offers really pays off.
Car banks often offer more than just a car loan without a processing fee.
A car loan without a processing fee is not the only benefit that is possible with a dealer loan. The vehicle market is particularly fierce in the case of new vehicles. Therefore, practically all brand manufacturers have founded their own bank. This bank only supports dealers in its own brand distribution network. These manufacturer banks have the task of promoting the sale of vehicles through subsidized interest rate policies.
The loan as a sales-promoting marketing instrument is used in a targeted manner. Whenever the paragraph is paralyzed, special promotions are launched. These actions can be limited in time or limited to certain models. Even a car loan without a processing fee and without interest is possible. Only the list price of the vehicle has to be paid back. There are no financing costs. Discounts are hardly possible with these financing offers. The term of the loans is often also relatively short. This means that the current installment payments are high or, in the case of a balloon loan, the final installment is exorbitant.
Even 0% financing can be expensive.
Large discounts are possible for new vehicles and used vehicles when paying in cash. The price reductions are of course dependent on the vehicle value. In order to clarify the possibilities in real figures, here is an offer from the radio advertising from November 2011. An immediate discount is offered on every new vehicle on the dealer’s premises, from at least 3500 USD to 10,000 USD. These real numbers show how expensive 0% financing can really be for the buyer.
Cash payment discounts can be used through debt financing.
The external financing, also as a car loan without a processing fee, opens up the possibility to buy the vehicle more cheaply. Only those who include the vehicle’s cash payment price in their credit comparison can really take advantage of the cheapest offer. For each loan offer, the sum of the total financing costs is always shown. The amount can be found with the car loan without a processing fee from the house bank as well as with an online offer.
If you subtract the sum of the cash payment discount from it, you can really compare. If an appropriate down payment is included in the savings when buying a vehicle, the result becomes even clearer. After deducting the borrowing costs, there is often money left over. In these cases, debt financing is the cheaper alternative to the dealer’s offer, for car loans without a processing fee and without interest.