Different ways for a favorable financing for the car

When the beloved car makes its last sounds, it’s time for a new car. There are basically two options for buying a new car. Either you have the necessary financial means to buy a car or you resort to car financing.

Admittedly, the first option is the most convenient one. You go to a car store and pick out your new gem, pay and you’re done. Unfortunately, this option applies to very few of us. Many drivers therefore have to finance their car. Best with low-cost financing for cars.

However, there are also differences in car financing. On the one hand, they can fall back on a car loan. This is usually a normal installment loan. But three-way financing, balloon financing and leasing are also available to car drivers as types of financing.

Each of these financing options has advantages for car buyers. In fact, it has to be decided on a case-by-case basis which of the financing methods is the optimal one. What they all have in common, however, is the desire for the most favorable financing possible for the car.

The car loan

A car loan is usually an installment loan that is paid off in constant monthly installments. Ideally, a down payment should be made, as this minimizes the amount of credit required, which can also reduce the installments, interest and also the term of the loan.

Balloon financing

With balloon financing, car financing is regulated differently. Monthly installments are also due here, but these are in the low range. In return, the customer pays a higher final installment at the end of the term. In order to be able to finance the final installment, additional favorable financing can be taken out or own funds can be used.

Three-way financing

Three-option financing is a financing option similar to the balloon loan. Constant monthly installments are paid. A higher final installment is due at the end of the lease term. To raise them here are three ways to do it. The first way is an own contribution without further financing. The second variant is the follow-up financing and the third variant is the return of the vehicle to the car dealer. The third variant also gives rise to the term three-way financing.


With leasing, monthly installments are also due, which are paid to the bank. However, it must be noted here that the installment amounts are usage fees and not redemption installments. At the end of the term, the vehicle is returned to the dealer. However, there is also the option of leasing the vehicle from the dealer.

Overview of favorable financing options for the car

What the statistics say? A brief overview.

According to a survey (statista) conducted in 2013, 42 percent of respondents stated that they would finance their new vehicle from their own funds. 27 percent of respondents said they would finance their car in parts. For 12 percent of respondents, leasing with an option to buy was an affordable way to finance a car. 14 percent of respondents used full financing at 100 percent and only 5 percent of respondents used regular leasing with delivery of the vehicle to the dealer.

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