Three ways to finance a car – choose the best one for you
Car finance with collateral may be a smart option to buy a new car if you have spare collateral. Because collateral helps secure loan repayment to the bank, the car finance interest rate is typically lower than other options.
OP cooperative banks’ owner-customers earn OP bonuses through secured bank loans. With a bank loan, you will become the car’s owner right away. In general, residential property (such as an owner-occupied home, a buy-to-let home or a holiday home) is used as collateral. The home doesn’t need to be free from debt to be used as collateral for a loan. Other assets, like forest, investments or savings, can also be used as collateral. However, the car to be bought or consumer goods aren’t eligible as collateral.You can apply for a bank loan even if you are not an OP customer.
Special Consumer Credit is a good option if you need less than 15,000 euros of financing. You can apply for Special Consumer Credit without collateral. Fill in a Special Consumer Credit application online. You will get a financing decision within two banking days at the latest.
With hire purchase financing, you can buy a car from a car dealer or a private person. The car serves as collateral for the loan, so you don’t need other collateral. Hire purchase finance has a fixed monthly instalment and interest so you will know the exact cost of financing throughout the loan period. Customers of all banks can apply for hire purchase.
Car finance interest rate
The interest rate depends on which type of finance you choose. A typical interest rate for car financing is 2–8 %. If you buy a car from a car dealer with hire purchase financing, the interest rate will be determined on a case-by-case basis.
Can I apply for car finance at a car dealer?
If you buy a car from a car dealer in Finland, the car finance is typically and conveniently arranged through OP’s hire purchase. You can apply for a preliminary finance offer online, in the service for car buyers (Auton ostajan apuri).
Applying is free of charge and will not obligate you to take out the loan. The final price for hire purchase financing is always set by the car dealer.
Card dealers offer several financing options. If you are an OP customer and want OP’s hire purchase financing, remember to ask for an offer for OP’s hire purchase. The salesperson fills in the agreement and credit application for you.
Down payment, payment term and costs of car finance
When you buy on hire purchase, you usually need to offer down payment: either a trade-in car or cash. The down payment for a new car is normally about 10–20%. However, car finance can also be granted without a down payment. For used cars, the down payment tends to be about 20–30% of the car’s purchase price.
The repayment period of OP’s hire purchase is 1 to 6 years, depending on your choice. The repayment period is determined by the age of the car, among other things. In hire purchase, the last instalment amount may be higher than the previous ones, if you have chosen to pay smaller monthly instalments.
You can find out about the costs and interest rates of OP’s hire purchase financing in our service for car buyers (Auton ostajan apuri) or from a car dealer. The interest rate under the agreement is fixed throughout the agreement period, so you know the amount of your instalments in advance, and the interest rate remains the same throughout the loan period.