How to get a loan to get a car
Getting a loan with the Good Finance of your car is a temporary credit solution to get out of some economic trouble we may have. Pawn your car can be a quick money solution for those cases where access to credit is closed.
In this article you will find information about everything you need to know to get money in exchange for your car.
Loans with a car guarantee as a credit solution
Pawn your car as a credit solution is a quick way to get money. The car is a liability that most people acquire throughout our lives on more than one occasion.
Most people take care of their vehicle better than themselves and, more interestingly, statistically they usually pay in full without problems.
That feature (that the vehicle is fully paid) is what makes it a perfect guarantee to get a temporary credit for your car. Keep in mind that other types of guarantees such as real estate, despite having a higher value, are often not paid at all since they are mortgages and therefore are really bank assets. This does not usually happen with our car.
How does car pawn work?
The commitment of cars was born as a credit solution years ago coinciding with the appearance of well-known pawn shops.
You were in a hurried economic situation and you were taking your vehicle to the pawnshop.
Next they verified that your vehicle did not have any reservation of dominion or some embargo on the property. An appraiser checked the current market value and offered a percentage in relation to the stipulated value.
You signed a contract in which you promised to return the borrowed capital plus interest in a term that used to be 1 to 3 months.
And you already had your money. Easy, fast and without “problems.”
You returned at 3 months with the money and recovered your vehicle.
Advantages of guaranteeing a credit with the car
- You can get an urgent credit in 24 hours.
- They accept clients that are in the ASNEF.
- It is more flexible and faster than applying for other loans.
- All these advantages can have its drawbacks.
All these advantages are related to the disadvantages of contracting fast credits: they are expensive and if you do not face the payment in the stipulated time you run the risk of losing your vehicle.
Risks in car pawn
I have met many people who have lost their vehicle with car loans. And nothing about normal cars, Citroen, Seat, Renault … I mean Audis and BMW.
In the beginning of this business, pawnshops and even the sales made this type of loans with very hard conditions. You had to leave the vehicle in deposit and the return period was short.
Time passes faster when you have to return money.
As a result, a delay in the repayment of the loan and your vehicle passed to the lender and in five minutes it was announced on some sales website.
As soon as word spread, getting credit for your car became a high-risk activity.
As soon as there was a decline in business, this has evolved as have private equity loans.
New financiers appeared who offered a more flexible product at the time of return and allow you to continue driving your vehicle.
As a result, getting money for your car today is an alternative and functional method.
How much money can you offer me credit for my car?
Forgetting the classic car market, we have to take into account that a new vehicle at the time of registration and departure from the dealership suffers an 18% depreciation.
The investment in vehicles undergoes rapid depreciation, low-mid-range vehicles and more than 10 years old are not well received by financial companies.
However, if the vehicle has an interesting value and does not exceed five years old, a financial company can offer you up to 80% of the appraised value assigned.
I give you a couple of examples:
These data are indicative and depend on the appraisal given to your vehicle at the moment.
The term for repayment of these loans is stipulated between 1 and 5 years, and the repayment conditions can be negotiated with the lender.
The interests that are usually found in car pawns usually range between 8 and 20% APR.
Documentation needed to request a loan with a car guarantee
The documentation needed to access a loan with the endorsement of your vehicle is as follows:
- Vehicle data sheet.
- Bullet or circulation tax (paid).
Finally, you must be the owner of the car, this must be free of charges or domain reservations and all your documentation will have to be up to date, taxes, ITV, etc.
Companies that offer credit backed by car
There are companies and online platforms that offer you credit backed by car. It is what is commonly known as the commitment of online vehicles . You pawn your vehicle and you get the money you need. You still enjoy your vehicle but forget about financial problems.
These companies value your car online, and you will know how much credit they offer for your vehicle for free.