Car loans and repurchase. What is a buy-back?

Car loans and repurchase. What is a buy-back?
Recently, among the citizens of Russia began to enjoy great popularity of such loan product - a car loan and repurchase - buy-back.

Today, a car loan so firmly entrenched in our lives that it is difficult to buy a car without this seems commonplace. Statistics show that the purchase of cars of all funds spent 20% are credit money. This amount is more than $ 9 billion. For comparison, in the United States with the help of the loan gets about 80% of all cars in Europe - about 60%. In Russia, the competition between banks is very high, so there are newer and more profitable lending program buying cars.



"Buy-back" (or repurchase cars) is one of the new programs. In this case, you need to understand that it is cheaper - to buy back or a car loan?

In fact, during its creation program "Buy-back" calculated on fans to change the car every 2-3 years to ride on the new motor vehicles.

The main point of this program is that the borrower pays only a portion of the loan (usually 50%, and sometimes no more than 15%), rather than the entire cost of the car. Once the final payment will be paid, the borrower must return the car seller to take (or not take) a new, pay off the bank the remaining amount in order to buy a car or to start selling their own cars, again to pay off the bank. If the funds to repay the debt does not, you can take installments for 1-3 years for full repayment of the debt. Under the scheme return dealer car repay debt to the bank is a car dealer and the car itself acts as a down payment on a new car loan.

It becomes apparent that the lending program "Buy-back" makes a simple car loan more affordable: the amount of credit payments reduced. In fact, using this service, you can buy a car more expensive and better, it is only necessary to pay an initial fee of 15%.

Since the total amount of payments on the loan is reduced monthly payments using auto loan repurchase also lower.

approximate calculation
For example, at a cost of 35 thousand dollars a car loan is available for up to 3 years, and the initial fee must be paid at the rate of 20%. The interest rate at the same time - 11% per annum. In the case of a standard car loan program monthly payment will be equal to $ 635 per month, and in the case of using the program "buy-back" - $ 360.

To indulge in the acquisition of a car, which costs 32 thousand dollars, using the program "buy-back" a month to pay $ 309 - a monthly income at just $ 924.

The advantage of such a program for car loans is that after some time (1-5 years) the borrower can sell their cars in the showroom, where it was purchased, at a price in advance prescribed in the contract, and, again taking advantage of the program, buy a new car.

Of course, there are various additional payments that make a loan under the program to repurchase a bit expensive. Remember that the buy-back program can use the car only in showrooms that have with the bank cooperation, and there is a corresponding agreement, confirming the effect of the program.

Cons buyback program cars
In the case of used car loan program "buy-back", there are some requirements, such as a car at the time of the redemption of his dealership is required to be in good repair and in good condition. In the event of an accident auto dealership also be redeemed, but the price drops. Also, there are car dealers who install mileage limit, which can travel at a year, respectively, the price is also reduced if the limit is exceeded.

Also disadvantage is the final and most overpaid. The fact that the main duty car loan is deferred until the very end of the loan term and interest accrued on that amount. Also there are various fees charged by the bank for the registration and issuance of credit for annual maintenance, insurance and so on. A total of such payments accumulates 3-5 thousand dollars annually.

Of course, the question arises of honesty in the auto, because they are, buying cars at the same price, then sell it for more. Currently, however, a large number of dealers and banks offer the borrower to sell a car on their own to pay off the debt on the loan.