According to the vehicle market mobile.de, the prices for new and used vehicles have fallen in the wake of the corona pandemic. (1) Prices have been rising again since August. On average, however, new vehicles are currently still 3.2 percent and used cars are still 4.8 percent cheaper than before Corona.
So it’s a good time to buy a vehicle – provided you compare both vehicle prices and credit costs. Alexander Artopé, managing director of the credit portal smava explains:
Not only vehicle prices, but also the interest rates on car loans are currently low. Car loans currently cost an average of 4.4 percent less than before Corona. (2)
Comparison important: Loans through car dealerships can be expensive
In Germany, according to Deutsche Automobil Treuhand (DAT), 77 percent of all private new and 42 percent of all used vehicles are financed. (3) According to the DAT Report 2020, the majority of car buyers finance the vehicles through a financing partner of the dealer.
Many car dealers only work with very few, sometimes with only one financing partner such as the vehicle manufacturer’s bank.
Alexander Artopé explains:
Car buyers may get two or three loan offers from the dealer. This can be disadvantageous because the interest rates for car loans currently differ by an average of up to 53.5 percent. So the probability is high that you will not get the cheapest car loan from the car dealer. (4)
Sample calculation for small cars & SUVs
There is currently an average of up to 53.5 percent between the offers of the banks.
When financing a small car (average new price according to mobile.de: EUR 20,337) over 5 years, the interest rates differ by an average of up to EUR 1,522, depending on the loan. For an SUV (average new price according to mobile.de: 30,776 EUR), the interest rates differ on average by up to 2,303 euros.
smava managing director Alexander Artopé comments:
Anyone who refrains from a meaningful credit comparison with such large interest rate differentials risks paying unnecessarily high amounts. Corresponding portals help consumers to compare loan rates from numerous banks and to take out a cheap loan.
The months of January and February 2020 were used as the “before Corona” period. The months of March to September 2020 were used as the “during Corona” period. Original content from smava GmbH about news aktuell.
(1) mobile.de: Average offer prices for new and used cars. The mean value for January and February 2020 was compared with the respective mean value for the months March to September 2020 (as of October 20, 2020).
(2) smava GmbH: all car loans brokered by banks through the credit portal smava.de in 2020; The mean value for January and February was compared with that for September 2020 (as of October 20, 2020)
(3) Deutsche Automobil Treuhand GmbH (DAT): DAT Report 2020
(4) smava GmbH: all creditworthiness-dependent interest rates for car loans from banks offered on the credit portal smava.de in October 2020 (as of October 20, 2020)
Image: © Andrii – stock.adobe.com