The age of the car plays an important role in car loans – but not the only one. The banks do not grant a car loan for every vehicle: Older vehicles – especially common everyday models – can be difficult. Who actually writes and advises here? About us On this page How old can the car be? Role of vehicle value Alternative: Installment loan Compare loans directly
How old can the car be?
The basic rule is: each bank has its own guidelines regarding the granting of car loans. The requirements are correspondingly different – for some banks the end of the vehicle is already 8 years old, for others only 10 or 12 years. Often, the decisive factor is not so much the age, but rather the value that the vehicle is likely to have at the time of the last installment payment.
Vehicle value at the end of the contract period
In the case of a car loan, the vehicle letter is handed over to the bank so that the bank can sell the vehicle if the borrower stops paying the loan installments. The vehicle therefore represents a security for the bank. If the vehicle is now only worth a few hundred USD, the bank remains on the open credit installments.
Example A: VW Golf, 10 years old
With a commercially available VW Golf that is 10 years old, it may now be that the vehicle is only around 1,000 USD three or four years later. If, for example, 1,500 USD loan installments are still outstanding at the time, the bank remains on part of the costs. Taking into account the effort involved in selling a car, the bank is undoubtedly making a loss.
Example B: BMW 5 Series, 10 years old
A 5 Series BMW with a powerful engine and many extras may still have a certain value six years after purchase. If the term of the contract is not too long, the vehicle may still be worth a few thousand USD on the used car market at the time of the last loan installment. In this case, the chances of finding a car loan for a 10-year-old vehicle are significantly higher. Basically, the following applies:
- The less the loss in value, the greater the chance of getting a car loan for an older vehicle.
- And: the shorter the loan term, the more likely the banks are to get a car loan for an older vehicle.
With a short contract term, the vehicle is ultimately even more valuable at the time of the last loan installment than with a long contract term.
Determination of the expected vehicle value
The decisive factor is always the market value. And that depends on the used car market. To now be able to determine – at least very roughly – how much a vehicle after z. B. can still be worth 8 years, take a look at the current used car offers.
Calculate how old your dream vehicle will be at the end of the loan term and search (e.g. via an online portal for used vehicles) for a comparable vehicle that is this age today. For example, if your dream vehicle is a Mercedes E-Class, Estate with automatic transmission and navigation system, look for comparable vehicles on the used vehicle market that are as old today as your dream vehicle will be at the end of the contract . This gives you a rough guideline – a guideline that is also determined by the banks in this way.
Notice! It is not certain whether the sample vehicle you chose for this value calculation corresponds to the sample vehicle that the bank chose. Therefore, try to select the comparison vehicle as realistic as possible.
Installment loan as an alternative
If the vehicle is too old for a car loan, there is still the option to apply for a classic installment loan. There are also many cheap offers for an online loan here.Notice! A non- earmarked installment loan is always more expensive than a car loan. A car loan is a financing with earmarking, in which the financing is subject (ie the vehicle) deposited as collateral with the bank. In an emergency, the bank can sell the vehicle and therefore has a significantly lower risk that costs remain open. The banks “reward” this lower risk with more favorable conditions, often with lower monthly rates. With a non-earmarked loan, the risk is greater for the bank – interest rates are generally higher because the bank wants the higher risk to be paid.
Car buyers should always choose a car loan whenever possible. An installment loan without earmarking should always be the second choice.