A car loan is a loan that is used to finance a new car for a specific purpose. Appropriate loans are both brokered by car dealers through the car bank and paid out by commercial banks.
The deposit of the vehicle registration document (registration certificate part II) is customary as security; in the event of an occasional waiver of its delivery, the vehicle buyer must prove to the bank in another way that he is actually using the credit to purchase a car. As is usual with all loans, a Credit bureau request is made for a car loan taken out in Germany as well as the entry of the financing into Credit bureau.
Negative Credit bureau entries and the auto bank loan
A Credit bureau-free car loan cannot be taken out through the car dealer, but an existing negative entry does not always lead to a refusal of vehicle financing, especially since the loan is secured by the car itself. As soon as a customer is ready to pay a third of the purchase price as a down payment, the car bank is hardly interested in existing Credit bureau entries, because whoever can pay a correspondingly high amount is apparently solvent again.
Since amounts up to 3500 USD can easily be borrowed from Good lender banks without Credit bureau, it is easy to make a correspondingly high down payment when buying a small car or a used car. In the case of used cars with a low sales price, it can be negotiated with the dealer that he does not broker an installment loan to the car bank, but instead concludes an installment payment agreement with the buyer, for which he does not necessarily have to make an inquiry. The installment payment agreed directly with the dealer as a Credit bureau-free car loan is ruled out due to the high purchase price for new cars and young used cars.
Good lender loans for buying a car
While Good lender banks only grant ordinary loans without Credit bureau up to amounts of 3500 or in some cases 5000 USD, a few federal credit institutions also grant car loans in the amount of a new car price. When granting a car loan without Credit bureau, Good lender banks as well as German credit institutions usually require the vehicle letter to be deposited as additional credit protection.
Furthermore, Good lender banks only grant their Credit bureau-free loans to dependent loan applicants with a few exceptions and require a significantly higher regular monthly income than German credit institutions. With regard to the interest to be paid, a Credit bureau-free car loan cannot be compared to vehicle financing through a dealer and it is also more expensive than most vehicle loans associated with a Credit bureau request.
Of course, a Credit bureau-free car loan also enables discount negotiations with the dealer, so that the additional costs compared to a car bank loan are partially offset by savings in vehicle prices. Consumers are happy to accept that a Credit bureau-free car loan is slightly more expensive than a vehicle loan with Credit bureau if they do not receive vehicle financing from German banks.