At the end of the year, what should you pay attention to when buying a car on installments?

The end of the year is considered the “golden” time for customers who are not too financially well-off to think about buying a “luxury car” to travel with their family during Tet. Because at this time, car manufacturers often heavily discount to stimulate demand, and banks do not hesitate to launch diverse car loan packages, suitable for the needs and conditions of each customer.

So to buy a car in installments, what do buyers need to prepare and what is the procedure? Below are some notes when buying a car in installments that buyers need to know to prepare.

Things to know when buying a car on installment

Many people think that buying a car on installment means that the seller will be the one to lend the buyer money to buy the car on installment. In fact, it is not like that, but either the customer contacts the bank himself or the seller contacts the bank on behalf of the buyer if there is a request, then the bank will work directly with the buyer.

Buying a car on installments is an option chosen by many people today. Illustrative photo

The form of selling cars on installments has been applied by car companies for more than ten years with the cooperation of commercial banks.

With installment payments, car buyers only need to pay 10% - 30% of the car's value in advance, the rest is lent by the bank and paid gradually over many years.

The bank's car loan packages are currently quite attractive and easy. Customers in need will be able to borrow for a maximum term of 60 months, with a loan limit of up to 100% of the car's value, if there is other collateral, or 70% - 90% when using the purchased car as collateral. The loan procedure is also "super fast", within only 4 hours, from when the customer provides complete documents and disbursement within 2 hours, after the customer has an appointment to pick up the car registration.

Pay attention to interest rates

When buying a car on installments, customers must clearly determine that they will have to pay more than the original value of the car, because each month they have to pay an additional interest.

Most banks usually offer 2 interest rate options:

Fixed interest throughout the loan term but monthly interest payable is calculated on the total initial outstanding balance.

The advantage of this method is that the interest rate is not affected and fluctuates due to bank adjustments. However, in this case, the buyer will not benefit if the market interest rate decreases, and the real interest rate will increase over time. Therefore, only people with stable income choose this form of loan.

The second form will also have a fixed interest rate initially, but will then be adjusted about every 3 months according to each bank's policy. Most banks currently apply a much higher interest rate than the first form.

But on the contrary, the car buyer will only need to pay a part of the money plus the interest calculated on the actual outstanding balance. Many customers who do not pay attention will be quite surprised and confused when the bank changes the interest rate (usually increasing).

Which customers can buy cars on installments?

Individuals with stable jobs, businesses, high income, can prove their income source and have a need to buy a car for non-commercial transportation purposes.

The form of selling cars on installments has been applied by car manufacturers for more than ten years with the cooperation of commercial banks. Illustrative photo

At the time of credit consideration, there is no overdue debt at any credit institution.

Collateral is property formed from loan capital or mortgaged, pledged with other assets of the customer or a third party.

Procedures and processes for buying a car on installment

Customers need to prepare some documents to complete the procedures for buying a car on installment. There are 2 main documents: Personal documents and financial documents.

All documents "according to the form", customers will be supported. Buyers only need to provide complete information and records.

In addition, buyers must clearly understand the process of buying a car on installments. This process includes three main entities: the car buyer, the car seller, and the bank.

First, after choosing a car model and completing the car purchase procedure, the buyer needs to prepare all the documents according to the instructions of the credit officer. The appraisal officer will go to the car buyer's location to appraise and collect the documents. When the bank agrees to lend the customer money to buy a car on installments and sends a credit financing notice (loan confirmation) to the car seller (and the car buyer). The customer proceeds to pay the remaining counterpart amount after deducting the loan amount confirmed by the bank and related car registration fees so that the car seller can proceed to register the car.

When the vehicle has the original license plate and registration, the customer quickly goes to the bank to sign the credit contract, pay the related fees, have the documents notarized and sign the bank's debt receipt (if the individual has a family, it must have the signatures of both husband and wife, if the business owner, it must sign and stamp). At the same time, the bank will provide the customer with a copy of the vehicle registration for circulation.

When the seller receives the amount of money according to the credit financing notice transferred to the account owned by the car seller, the customer will go to the car seller to fully pay the remaining debt (if any), complete the vehicle registration procedure and receive the car.car.