# The statistics show that a large part of all personal loans granted are used to finance a vehicle.

Many consumers can not choose between credit and leasing, which is why we present some cost examples for acquiring different vehicles.

## Loan or lease?

If you want to finance a vehicle, you can either take out a lease or take out a loan. These are two quite different solutions that have been compared to each other before (see our article on comparing credit or leasing ). In summary, the decision on the choice of product may not depend solely on the interest rate: the interest calculation for the two products is not the same and the lease involves a repurchase at the end of the contract. If the payback period is short enough, the loan is an interesting alternative.

## Our examples

Here are some examples of a vehicle loan. Such a loan is basically a consumer loan that is used to finance a vehicle. In each example, we indicate the monthly installment and the total cost of the loan (total interest, included in installments). Since the interest rate offered mainly depends on the financial position of the borrower, we present each example with three different interest rates.

## Example 1: Financing a new quad

A private person wants to purchase a new quad. The total cost of the off-road vehicle is 4’500 CHF. Since she can afford it with her monthly budget, the private person chooses a payback period of 12 months.

- Interest rate of 5.9%: monthly rate of 386 CHF / month, total cost of 141 CHF
- Interest rate of 7.9%: monthly rate of 390 CHF / month, total cost of 188 CHF
- Interest rate of 9.9%: monthly rate of 394 CHF / month, total cost of 234 CHF

## Example 2: Purchase of a used vehicle

A private person would like to use a vehicle loan to finance an used vehicle of CHF 7’000. What are the costs with a payback period of 2 years (24 months)?

- Interest rate of 5.9%: monthly rate of 309 CHF / month, total cost of 426 CHF
- Interest rate of 7.9%: monthly rate of 315 CHF / month, total cost of 569 CHF
- Interest rate of 9.9%: monthly rate of 321 CHF / month, total cost of 711 CHF

## Example 3: Purchase of a watercraft

A customer wants to buy a used sailboat. He finds a seller who offers him a boat with 2 cabins for a price of 14’000 CHF. With a vehicle loan for the boat to 36 months:

- Interest rate of 5.9%: monthly rate of 424 CHF / month, total cost of 1’274 CHF
- Interest rate of 7.9%: monthly rate of 436 CHF / month, total cost of 1’707 CHF
- Interest rate of 9.9%: Monthly rate of 448 CHF / month, total cost of 2,139 CHF

## Which vehicles can you finance with a personal loan?

While certain properties can not be financed by leasing, there is really no limit to the choice of vehicles that can be financed with a personal loan. As long as the financial situation of the customer allows the loan, he can spend the money received according to his own needs. As a result, you can finance almost anything with a vehicle loan:

- Buying a car : whether it’s a new car or a used model, the auto finance loan is completed very frequently.
- Buying a motorbike or two-wheeler : Whether you are interested in a new motorcycle , a bicycle for various purposes or a low-consumption scooter , everything is financed by credit.
- Buying watercraft : for sports or leisure. With a loan, various ships and boats can be financed, for example, a private sailing yacht .
- Other vehicles : Vans, tractors, caravans or motorhomes can be financed cheaply by vehicle loan.

## Who should I contact?

As always, we recommend using the services of a specialized agency. Of course you can also go directly to a bank for a loan, but a specialist can analyze your situation, advise you, manage your complete dossier and usually get the better deals as a private person. This is because a professional usually has excellent contacts with lenders and can therefore negotiate interest rates more efficiently and compare offers more easily. The service of such a consultant is always free for private individuals!