Anyone can become the owner of a new car using the Buy-back credit program. What is Buy-back and how is it different from a regular car loan? Is it worth taking such a loan? These and other questions are of concern to potential customers.
Translated from English, Buy-back means buying back. The loan is issued for 3 years. The client makes an initial payment of 10% to 50%. Part of the principal 20% - 40% of the car's value is frozen for 3 years - this will be the last payment. The remainder of the debt is spread over 36 months. Monthly payments are lower than that of a standard loan.
The client pays off the loan strictly according to the schedule and after 3 years he will have a choice. He can pay the bank the rest of the debt and drive home by car. If there is no money to pay off the debt, then the car dealership buys the car, the borrower repays the debt and walks home. The car owner can renew the loan at the car dealership and continue paying. Or a client hands over a car to a car dealership, the money goes towards debt and a down payment for another new car. As a result, the client draws up a new loan and goes home in a new car.
The main and main advantage of such a loan is small monthly payments. Due to this, buying a car has become more affordable. There was an opportunity to buy a car with a richer configuration or choose another car, prestigious and more expensive. The decrease in the amount of payments is due to the freezing of part of the principal debt. As a result, the client receives a deferred payment, which will need to be paid in 3 years. The size of the last payment is 20 - 40% at the client's choice, of the cost of the car
On the one hand, such conditions seem to be very beneficial and it would be foolish to refuse such a loan. However, not all so simple. The secret is hidden in the loan formula. As a rule, the monthly payment consists of two parts - this is the main debt and interest. In order to reduce the payment, part of the amount is removed from the principal debt, and the amount of interest remains. Thus, each month the client pays less money against the loan body, and the interest is the same as for the full loan amount. Therefore, the overpayment on the loan will not even be much more than that of a standard car loan.
Before going into debt, you need to check which loan is the most profitable. Let's compare a Buy-back loan with a consumer loan and a regular car loan. You can calculate a standard loan on the website https://calculator-credit.ru. You can calculate the Buy-back loan on the official website of VTB 24.
We will calculate a loan for 300,000 rubles for a car worth 600,000 rubles, with an initial payment of 300,000 rubles. The last payment will be 20% of the cost of the car 120,000 rubles. Please note that conditions and interest rates are subject to change and may therefore vary. We will calculate CASCO insurance approximately, for the first year 40,000 rubles, for three years 90,000 rubles. Life insurance for 3 years 25,000 rubles. As a rule, CASCO and life insurance are included in the total loan amount.
The lowest interest rate for a loan with repurchase is 8.9%, a car loan is 11.58% and a consumer loan is 17%.
Buy-back loans have the lowest monthly payments, followed by consumer loans and car loans.
The largest overpayment will be for a car loan, followed by Buy-back, then consumer.
This calculation shows that the most profitable loan is a consumer loan, because there is no CASCO insurance in it. However, the Buy-back loan overtakes everyone in payments, every month you have to pay 8864 rubles. But after three years, the loan will not be repaid and you still have a debt of 120,000 rubles. If you do not have money for the last payment, then you will have to extend the loan at the car dealership, or take a consumer loan. Therefore, the overpayment on the Buy-back loan will be the largest. Therefore, a buyback loan may not be the most profitable loan, but with the most comfortable monthly payment.
A loan under the Buy-back program provides the client with a comfortable payment, the opportunity to buy a car with an expensive package, as well as sell it in 3 years and buy a new one.
The disadvantages include a large overpayment for life insurance and CASCO. Most of the debt is carried over into the future, so you need to anticipate your income. The appraisal of the value of the vehicle upon purchase by a car dealership may be below the market price
You can buy a car under this credit program when you need to reduce monthly payments and carry over current expenses for the future. If you want to save money, it is better to take a consumer loan.