In practice, this implies that, in case of default by the client, the bank or finance company will keep the car

A loan with a car guarantee may be suggested if,

For example, you need a loan, but you don't have a good financial profile

You will have a higher chance that it will give your application the green light.

However, when applying for a loan for your car

it is important that your car is fully paid for and its appraised value is sufficient to cover the loan in the event of your default

Imagine you have a 3,000 euro discount on the price of the car and 7% in interest, financing the car at the dealership with an opening commission of 2% (440 euros)

In this scenario, the APR would be 8.14% , and you would pay 4,853.37 euros in interest

Therefore, if you choose an interest-free car loan, especially the small print Be careful and analyze in advance how much you need to finance