Car loan with residual debt insurance is a popular method of reducing the risk of default associated with a car loan. The car loan with residual debt insurance always shows its advantages for the lender and borrower when the borrower is no longer able to make the repayment due to an insured risk. So if a fleet of commercial vehicles is rented to a small business, the risk can be significantly reduced. In the area of private customers, car loans with residual debt insurance reduce the risk.
With this loan you save the comprehensive insurance
The car loan with residual debt insurance can be found in particular in higher-value vehicles that are produced individually on customer request. These can easily reach a six-digit value, but lose value relatively quickly – especially in the first year. The lender can cushion the risk of a sudden total loss of the car due to an accident in two different ways: some lenders prefer to take out fully comprehensive insurance, while others reduce the risk through a car loan with residual debt insurance. This is also very popular when it comes to financing vehicle fleets if a lender doesn’t want to take too much risk on a single borrower.
If you want to calculate whether the residual debt insurance is actually too expensive, you should compare it with the surcharges for fully comprehensive insurance. The insurance solution covers other, additional risks – but is also an instrument for sustainable risk reduction.
The Internet comparison enables a feeling for prices and services
When you start an Internet comparison, you get a very good feeling for the individual prices and services. Calculate different loan options and compare them based on the actual effective interest rate and the total cost. When you take out residual debt insurance, you can often observe an opposite effect: loan interest rates are reduced due to the lower risk, but additional debt insurance is added as a cost component. It is entirely up to the car buyer to decide which type of risk protection he would like to have.
The possibility of securing a car loan by the car manufacturer VW became known to the general public just over ten years ago. This started a special campaign to really step on the gas when selling new cars. At that time, every customer who financed their vehicle through the company’s own car bank was offered free residual debt insurance for the first 12 months. This was intended to lower the inhibition thresholds for new car sales and to alleviate the economic uncertainty in 2001-2002 a little.
In addition, the campaign had an enormous attention value, which further increased brand awareness. In the meantime, the combination of various features of car loans has become a popular marketing tool for manufacturers.