Why not a bank to finance used cars

Buying a car: cash, financing or leasing?

The new car can be paid for in several ways: cash, credit, leasing or financing. ADAC lawyers explain the advantages and disadvantages.

  • Before buying a car, weigh up: cash purchase or financing

  • ADAC graphic: Which payment method suits you

  • ADAC lawyers present six different payment methods

Brochure from the ADAC lawyers:

Pay, finance or lease your car in cash

Think about what "type of buyer" you are. Do you prefer cash or installment payments? Do you want to become the owner of the car right away? Is it important to you to always drive the latest model? Which way is the best for you? The ADAC graphic gives an overview and helps with the decision.

cash purchase

advantage: If you pay the new guy in cash, you can possibly get a better one Discount negotiate on the purchase price. You also become the owner of the car immediately.

disadvantage: The cash purchase tears a hole in your till. It is not cheaper if the interest on a car loan is close to zero or if there is higher interest on your savings than you would have to pay on the loan.

Car financing

These are the questions to ask yourself before getting a car loan:

Do I want to become an owner?

If not, leasing might be the way to go. 3-way financing can be considered if you do not want to decide in advance.

How much money do I have available for monthly payments?

Ask yourself critically whether you can service the loan on a permanent basis.

Can I insure the credit risk?

You can reduce the risks of the loan (in the event of e.g. unemployment, accident and death) with a so-called Payment protection insurance to secure. These can also be covered by private term life, accident or disability insurance.

A residual debt insurance is voluntary and mostly expensive. It is more suitable for loans with a very long term (construction loans). When it comes to car financing, it is less useful. Ask about waiting or waiting periods and benefit restrictions before taking out such insurance.

The ADAC lawyers explain what options there are for financing a car.

Loan through the house bank

You can negotiate with the car salesman as if you were paying cash. With your house bank, the interest rate is independent of the vehicle model, but often higher than with a manufacturer-bound bank. There is no deposit. The car serves as security for the loan.

Financing via manufacturer-linked bank

This financing is particularly cheap for certain models. Advantage: when the loan is revoked, the sales contract for the car is also terminated (so-called connected business). However, you can usually no longer negotiate additional discounts. The repayment term is fixed and you have to make a down payment. Often fall height Final installments that you have to save during the term.

3-way financing

Here you can decide at the end whether you want to return the car to the dealer, buy it after the final installment or continue to finance the final installment.

If you have to take out a loan again for the (usually high) final installment, this increases the total costs considerably. Often the interest rate for the follow-up financing is higher because the car is no longer new and has a lower value.

Attention: the return the costs for the so-called condition-related will be at your expense Inferiority deducted from the agreed surrender value. There are no objective evaluation criteria for this, so there are often disagreements with the dealer. You also have to for More or less kilometers pay.

Balloon funding

Low loan installments during the loan term. Usually one will very high closing rate due that you should save. Follow-up financing to pay the final installment can be very expensive.


With a leasing contract, you only have the right to use the car for a certain period of time. With the leasing rate you pay for the monthly usage and the loss of value during the contract period.

There are different contract models such as residual value or kilometer leasing. The leasing rates are lower than loan rates. The lessee can change the vehicle model more often because he does not become the owner. When the leased car is returned, disputes often arise because the so-called condition-related depreciation is deducted from the lessee.

All Information on leasing you'll find here.

Car subscription

Similar to leasing, you don't become the owner of the car, you keep it for a period of time. For example, you drive an SUV in winter, a convertible in summer, and possibly a station wagon next winter.

You pay one monthly fee (Flat rate), which are slightly higher than with classic leasing. It includes the costs for registration and deregistration, inspections, maintenance, HU fees, seasonal tires, wearing parts, GEZ, insurance and vehicle tax. You have to pay for fuel costs and any damage you have caused yourself. The vehicle models are already configured. You therefore only have a limited choice in terms of color and equipment, for example, but you can simply order the car via the app and save yourself the trip to the dealer.

You can find more information about the car subscription here.

You should be Right of withdrawal for consumer credit knowledge.

Legal advice: This is how the ADAC helps

you are ADAC member and still have questions?
By phone are our club lawyers on Tel.089 76 76 24 23(Monday to Friday from 8 a.m. to 6 p.m.) there for you.


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