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Germany - Car Loans

There are two types of car loans to choose from: a car loan from the car dealer's own financing company (eg. BMW Bank: loans from these institutions are sometimes referred to as leases) or a personal loan from a regular bank or a car finance company.

Car dealers have wised up to the fact that banks make lots of money from car loans, so now they are offering their own financing at a high rate of interest. If you buy a new car, then be prepared for the dealer to try to talk you into the dealership's own financing scheme. They will play around with the interest rate and the terms of the loan, but in the end the total price you pay for financing the car will be the same - and a lot more than if you buy the car without the finance package!

Personal loans from regular banks have a high rate of interest. Typical borrowing amounts vary from 5000 euros to 25000 euros. Terms vary from 12-72 months (1-6 years). Interest rates vary from over 8.5% to over 12%, so make sure you shop around before committing to a loan. Variable interest will be cheaper than a fixed interest rate. The longer you want to fix the interest rate for, the higher it will be.

A vendor lending money specifically for cars is Car Credit. Their loans vary from 5.5% to 7.2%, but as with all credit companies, be aware of being lured in by a cheap honeymoon rate. Car Credit offers loans from 12-84 months (1-7 years). They can be contacted via phone or over the internet:
Tel: + 49 (0) 180 500 4041


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