If you are going to buy a car on credit but have never done so before, read this article. It will help you not to make mistakes and not be deceived.
Tip 1: Choose the most favourable conditions
According to the law, only credit organizations with appropriate licenses can issue loans. So car dealerships are just intermediaries between you and the bank.
At the same time, as a rule, several partner banks cooperate with car dealerships. You have the right to submit applications at once to all possible banks, there are no penalties for not concluding an agreement. But this way you can choose the most favourable conditions for yourself.
You can leave an application for a car title loans not only through a bank representative in a car dealership but also by contacting any bank directly. In this case, the answer will have to wait longer, but the percentages will almost always be slightly lower.
It is most profitable to buy a car on credit under special lending programs. In this case, the interest will be minimal, but the first instalment will be about 50%.
The most unfavourable lending conditions are offered under the guise of so-called express loans, the decision on which is given in just a few minutes or hours.
Tip 2: Refuse imposed services
Before signing anything, read the documents carefully. When applying for a car title loan, you will need to familiarize yourself with the purchase and sale agreement, the vehicle pledge agreement and the insurance agreement.
If somewhere something does not suit you or there are incomprehensible moments, ask for clarifications and all the information you are interested in about the counterparty. All documents must be provided to you. The Consumer Protection Law is on your side.
Very often, banks and other credit organizations indicate unfavourable conditions for you in footnotes, under asterisks or in small print. One of the most frequently imposed services is life insurance.
Tip 3: Count and check everything yourself
Never take the word of car dealership managers. First, as I said, they are not directly related to the bank, they are just intermediaries.
Secondly, many car dealerships (mostly unofficial dealers) deliberately mislead you in the hope that you will sign the contract without reading it.
In the contract itself, there may be some commissions, payments for the delivery of the car, all sorts of hidden payments or payments under special circumstances that no one told you about.
Therefore, always ask the bank for documents on the full cost of future costs (namely documents – do not believe the words, and it is from the bank, not from the manager of the car dealership).
About the monthly payment, about interest, about all special conditions, about additional payments, about the conditions of insurance, about the terms of early repayment of the loan, penalties for delay, and so on.
Tip 4: see who you pay
Check not only the contract but also the details of the parties. The data from the contract must match the data in the payment order. Do not sign it until you are sure that you are transferring money to the bank, and not to some Uncle Vasya.
Unscrupulous car dealerships sometimes slip their customers a payment order with the same amount as in the agreement, but with different details.
The money goes to someone who is not clear, there is a delay in payment at the bank, and it will be very difficult to prove that you were misled, you saw the payment order, you saw who you are transferring money to.
Tip 5: TCP and CASCO
As a rule, after applying for a car title loan, the PTS (vehicle passport) remains pledged to the bank. This is normal practice, banks are thus trying to protect themselves from fraud.
However, you need to pay attention to how many days you are given to provide the bank with the TCP for storage, and what penalties will be in case of failure to provide the document within the allotted time.
Another point is related to the registration of the CASCO policy. Most often, issuing a CASCO policy is a prerequisite for obtaining a car title loan. However, recently, in the struggle for a client, some banks do not insist on this. Don’t think there is a trick to this.
