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Used car financing - this is how it works cheaply for used vehicles

Hans-Dieter Seufert
Used vehicles - financing
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Cash payment when buying a used car is slowly going out of fashion. More and more often, customers decide to finance - which is hardly surprising. After all, well-preserved second-hand vehicles are rarely available for less than 10,000 euros. Whether leasing, three-way financing, balloon or installment loans - what the trade offers in the new vehicle sector is now also available for used vehicles. But what is recommended?

Leasing lures with low rates, but many customers do not know the rules of the game of financing. In short: the big bill is often served at the end when the car goes back to the dealer. Better is the three-way loan, which works similarly and is not much more expensive, but offers the customer more security - unlike with leasing, the driver ultimately decides whether to return the car or continue financing it.

V Above all, the branded companies offer this special loan, whereas free banks rarely offer this. They tend to rely on the balloon loan, which is often confused with the three-way variant. This is because the process is the same - with one exception: There is no right of return at the end of the contract.

auto motor sport tip:

three-way credit:

+ fixed interest rate
+ customer does not have to finance the entire price of the vehicle
+ in the end the customer has three options: keep, continue to finance, give up
+ often with low interest rates
+ mostly with low rates
+ often only small down payments necessary
- often only with short contract periods
- mostly only to be found in the range of manufacturers
- when a car is returned, deficiencies count, which can mean additional payments
- Option of a follow-up loan after the end of the contract, but at expensive used vehicle conditions

Suitable for: The three-way loan is the best choice for private customers. It works in a similar way to leasing, but offers more security.


Calculation example:
Audi A5 Coupé 1.8 T (first registration: July 2008, 66,000 km)

Audi Bank:

Purchase price 28 991 Euro
Down payment 5798.20 Euro
Eff. Interest rate 5.90 percent
term 36 months
monthly rate 508.20Euro
Final installment 7629.85 Euro

Free bank:
No offer


Vehicle leasing:

+ Customer does not have to finance the vehicle price, only pays for use
+ mostly at low rates
+ only small down payments
+ many offers due to numerous providers
- often only with short contract periods
- customer is not the owner of the car
- car defects mean additional payment; In the case of residual value contracts, the customer is liable for loss of value
- many contractual obligations for the customer
- more customer-friendly kilometer leasing not with all banks
- often higher reimbursement rate for additional kilometers than for less kilometers

Suitable for: Recommended for business people because of the tax advantages. The contract with mileage billing is safest - no residual value liability.

Calculation example:

BMW 320d Touring (first registration: August 2008, 40,950 km)

BMW Bank:
Purchase price 19 890 euros
Down payment 3978 euros
Duration 36 months
Monthly rate 230.95 euros
Residual value -

Free bank:
Purchase price 19 890 euros
Down payment 3978 euros
Duration 36 months
monthly installment 286.56 euros
residual value 8105.18 euros

balloon credit:


+ fixed interest rate
+ after the end of the contract the car belongs to the customer
+ many banks offer the financing
+ mostly at low rates
+ often only low down payments required
+ many offers with low interest rates n
- often only possible with short contract periods
- in the end high final installment (residual value) left over, which the customer has to pay
- option follow-up loan mostly at expensive used car conditions
- customers finance the loss of value
Suitable for: Customers should better take the three-way loan. When it comes to balloon financing, the options are limited in the end.

Calculation example:

Toyota Avensis 2.0 (first registration: March 2008, 69 400 km)

Mercedes- Bank:

Purchase price 11 490 Euro
Down payment 2298 Euro
Eff. Interest rate 6.90 percent
term 36 months
monthly installment 141.54 euros
final installment 5745 euros

Free Bank:

Purchase price 11 490 euros
Down payment 2298 euros
Eff. Interest rate 8.99 percent
Term 36Months
Monthly installment 150.40 euros
Final installment 5745 euros


Installment credit:

+ constant rates
+ long contract term possible
+ after the contract ends Car to the customer
+ large offer with low interest rates
+ fixed interest rate
+ special repayments possible, early exit from financing is easy
- despite low interest rates, high rates are often to be paid
- for low rates require high down payments or terms (higher interest costs)
- customers finance the loss of value
- with some banks, the customer's creditworthiness decides on favorable interest rates
Suitable for: For private customers, who rely on planning security and long contract terms, the classic installment loan is the first choice.

Calculation example:

Mercedes ML 280 CDI (first registration: March 2008, 50,000 km)

Mercedes-Bank:

Purchase price 33 790 Euro
Down payment 6758 Euro
Eff. Interest rate 7.75 percent
term 36 months
monthly rate 840.71 euros

Free bank:

Purchase price 33 790 euros
Down payment 6758 euros
Eff. Interest rate 5.55 percent
term 36 months
monthly rate 815.20 euros

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