In 2021, where would we be without a car? Many people depend on them for commuting, visiting friends and family and going on holiday. Not having a car means a considerable restriction of your freedom of movement. But what should you do if you don't have the savings to buy a car, but need one? We discuss a number of options.
Personal loan
If you cannot afford the purchase price yourself, a lender may be able to do it for you. A personal loan is an option for car financing where you can pay the seller in one lump sum and thus become the owner of the car immediately. The repayment arrangement can be tailored to your wishes and possibilities. Of course you will pay interest and a longer term means that you will eventually pay more interest. Because of this interest you will also end up paying more than the original purchase price. On the other hand, you can use the vehicle immediately.
On credit with the seller
At several official dealers it is possible to buy a car in instalments. This means that you don't have to pay the purchase price in one go, but that you pay off the car. That's handy, but pay attention to the conditions before you start. Because a car in instalments is in fact also a loan, you also have to pay interest. How high is the interest? Will there be a large balance left at the end of the term that you have to pay at once? Will you become the owner of the car immediately? These are questions to which you should have answers in advance. These last two issues are not an issue with a personal loan. Also, the interest rate is often a bit lower.
Private lease
An alternative to the above options is private leasing. You pay a fixed monthly fee to use the car for an agreed period. You do not become the owner of the car, but you can drive a new car. The monthly fee is often quite high, but it does include insurance, road tax and maintenance. In case of damage, you can get a replacement car. But beware: terminating a lease contract prematurely is often difficult and very expensive. Another disadvantage is that the number of kilometres you can drive per year has to be agreed in advance. If you drive more, you have to pay extra.
So no savings need not mean that you cannot get a car. But be aware that borrowing money costs money and both loans and instalment plans are registered with the Credit Registration Bureau (BKR). This can have consequences for future loans.
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