For example, Germany’s largest car manufacturer has been offering a car loan for over 50 years so that the dream of a new car remains affordable and you can pay it off in convenient monthly installments. Again and again you come across the question of whether there is a car loan with residual value. You are quite rightly expecting a detailed and clear answer. In this case, the answer is yes and no.
A car loan with residual value is unusual
If you go to your bank or savings bank to finance your new car, you will often get an offer with an apparently higher monthly rate for the same duration as with classic car leasing. However, this is not because of a possibly unfair calculation, but because of other calculation bases. The bank or savings bank is a specialist for loans and investments and not for new and used cars. Therefore, the bank will adopt a more general formula for the loss of value and will have little to do with the resale of the 4 or 5 year old car. The bank will either fully or partially finance the new car, but usually with an installment loan with full repayment.
The situation is different with the various car banks
The focus here is on communicating a monthly rate that is as favorable as possible. In addition, the automaker and the car bank are promoting the purchase of a new car by reducing the risk for the customer. The financing, which is actually a leasing contract, is calculated with a residual value after 2 or 4 years. Often with the option that the customer can hand over the car to the car bank. In this way, the customer retains full flexibility in how he wants to stay mobile after the end of the term. The car loan with residual value is a kind of finance lease. With of course unbeatably low monthly rates and also the certainty that someone will take care of the resale of the car in a professional manner.
Installment loan with full repayment or car loan with residual value – which is better?
The two financing options are used very frequently for good reason. Of course, it depends on the driver himself and the chosen vehicle model. With a high-priced, racy sports car, it is certainly an advantage if a residual value is agreed in advance. Even with a rare combination of colors and special equipment, a car loan with a residual value can be an advantage: if the taste of customers changes, the financing company bears the risk. Losses in residual value are then reflected in the balance sheet there and not in the driver’s wallet. The car loan with residual value is almost risk-free for the driver.