4 important tips for a car loan

A car is expensive, and it is not always possible to cover the purchase price out of your own savings. Therefore, it is sometimes necessary to think about a car loan. There is a large offer in this regard, but there are also a few things to consider. We have put together four important tips for you so that you can enjoy your new car for many years!

Cheap financing through the dealer

Cheap financing through the dealer

It is often the case that the car dealer works with a bank; large corporations have even founded their own institutes. This means that when you conclude a contract, you also receive the car loan “from a single source”, so to speak. These offers can be cheap – but they don’t have to be. It’s no secret that car dealers have guidelines regarding the cars to be sold. Towards the end of the year, you therefore have the chance to get really cheap loan terms, as the dealer is primarily interested in selling the car. Nevertheless, we expressly point out that a credit comparison is definitely appropriate – read also point 4!

Apply for a car loan now!

the period

the period

It is clear that the monthly rate is lower if you choose a long term of the car loan. However, it must always be weighed up in individual cases how long you should repay. After all, buying is not always about a new car, and if you buy a five-year-old car, you should also adjust the term to the expected lifespan. Or do you still want to pay for a car that you no longer own? It goes without saying that you have to consider in advance whether you can afford a loan at all. There are also many interesting articles on this topic on our site!

Assuring reassured

Assuring reassured

Imagine you take out a loan, drive your new dream car – and suddenly you slide off the road on black ice. In the worst case, the car can no longer be repaired, but the loan still has to be serviced. It is therefore important and sensible to take out at least partial comprehensive insurance and also to think about fully comprehensive insurance. Get a variety of offers, all-round protection may not be as expensive as you fear, and you can get in the car with ease every day.

Compare, compare, compare!

Compare, compare, compare!

NEVER accept the first offer you get for car finance. As I said, the market is big and there are a number of banking institutions that are happy to welcome customers. Therefore, you should definitely compare the credit conditions, the installment amount and the other expenses exactly before the final decision. You don’t have to make a pilgrimage from bank to bank – you can do this comparison conveniently from home on the Internet. You enter some key data – loan amount, age, income situation – and in the next step you get an overview of the current offers of the different banks. This gives you a good basis for making your decision.

Is it better to buy a car on credit or leasing?


Please note in advance that there is no clear answer to this question. However, before you dismiss this page in disappointment, be aware that you will have more clarity in your choice after reading this article. For each type of person is suitable different type of financing, which will be tailored to their needs.

The most important concepts

credit saving

While the loan consists of borrowing money for which a person can buy the item and own it, leasing has different rules. With leasing, the car is owned by the seller until the buyer pays all the installments. Leasing is actually based on a lease agreement – the buyer rents the car for the period of payment.

There are two types of leasing – financial and operational.

  • For financial leasing it is assumed that you buy the car at the end of the repayment period. Financial leasing is characterized by a higher first installment, the so-called down payment, which usually amounts to 30% of the vehicle price.
  • Operational leasing, on the other hand, is much more charter than financial leasing. Operating leases are not expected to be purchased at the end of the period, but there is an option. Under operating leases, there is no obligation to pay a down payment.

While in the past the driver could choose between different lengths of leasing (for example, for one year, ie he could have a new car each year), today the most common length of leasing is 3 years. Can’t you decide whether leasing or credit is more convenient for you? Let us now focus on the pros and cons of each form of financing.

Financial advantage

money loan

Although leasing remains in people’s subconscious as the most expensive option, it is not always the case. It is true that in the case of leasing there is often a higher fee for arranging a loan. However, liability insurance and accident insurance are already included in the lease installment. In today’s wide range of financial products, the prices between credit and leasing are not very significant.

Rather, the choice of a suitable financial company plays a role in the question of financial profitability – the differences between the offers of credit and leasing companies can be very significant. For a loan, always find out information about APR, which is literally “annual percentage rate of charge”, ie the amount of loan costs, which includes interest and other costs – such as account maintenance fee.

How much can individual loans vary?

We compared the loan conditions of three random credit firms on the Czech market. Loan of USD 300,000, repayment period of 5 years:


  APR Total amount paid
Company 1 4% 330 686 USD
Company 2 6.07% 347 173 USD
Company 3 11.67% 392 154 USD

The table shows that by choosing the cheapest option you can save 61 468 USD. Where to get more comprehensive information about the credit market?

Tip! Our online loan calculator allows you to compare offers across the market and find the cheapest option, allowing you to save tens of thousands of crowns. Find the best loan

Difficulty of obtaining

Loan is more difficult to obtain, while leasing does not have such strict rules. In most cases, leasing is therefore a faster and easier option for financing. This can also be an advantage of traps at the same time. While it is true that they will not check your solvency so closely with a lease, but a thorough click through of your financial capacity can help. In general, lenders do not lend to people who are unable to repay. Therefore, when applying for a loan, you have a better chance that the loan will match your payment options.

The question of ownership

money saving

The loan has one indisputable advantage, which is the fact that the car is owned by you. If you are unable to make a payment, the bank or credit company will be interested in agreeing with you and setting up a repayment schedule, for example. This is quite the opposite of leasing, where the leasing company can terminate your contract if you miss the installment and confiscate the car.

Worries about normal operation

money loan

While for ordinary property you have to worry about a lot of things (paying insurance, service repairs), for leasing these activities are covered by a leasing company. The installment price includes both compulsory and accident insurance. The leasing company also covers most service repairs.


While you can drive a half of Europe with your own car, most leasing companies set a mileage ceiling. Usually it is 20 000 kilometers per year. After exceeding this limit, you will not be taken away by your car, but you may increase your leasing payment, or you may pay extra for each kilometer beyond the scope of a single ramp. Leasing companies can charge for example USD 1 – 2 per kilometer, but there are also companies where they pay a fixed amount or even 6 USD for each extra kilometer.

Currently from the market

How are the trends when buying a car now?

  • Interest in operational leasing is growing – approximately 30% of buyers choose this form of financing.
  • People are interested in more expensive used cars. More and more clients prefer more comfort and luxury in a car, and many of them do not hesitate to buy more luxury cars in used car shops.
  • Households are more likely to opt for consumer credit, while operating leases. Operational leasing is an affordable way for companies to buy cars and not to spend money on their purchase.
  • Part of the purchase of a car is the conclusion of appropriate insurance. In 2019, people will spend USD 5607 for MTPL (June 2019). The difference between the cheapest and the most expensive MTPL offer in the same month was 3391 USD.

Mortgages are also available as foreign currency loans

Are you interested in terms of foreign currency mortgages from Lite Lender? Consult with me without obligation.

Today, Lite Lender published a mortgage bank that introduces so-called foreign currency loans. By name, you would guess that these are mainly mortgages for foreigners. You will be surprised, because Lite Lender foreign currency mortgages can easily apply to you. Read this article to learn the rules for getting these loans.


What is Lite Lender Foreign Mortgage

save money

Foreign currency mortgage is defined by the Consumer Credit Act No. 257/2016 Coll. and concerns three cases:

  • For example, you want a mortgage for an apartment, but your wage is in a currency other than the crowns, or
  • you will repay an American mortgage in a currency other than the crown, or
  • you live outside of the Czech Republic.


How to handle Lite Lender mortgage in foreign currency

money loan

The process of arranging a mortgage to buy an apartment or building a house is simple and the same hair as if applying for a loan employee who is paid in crowns.

The difference, however, is that Lite Lender only accepts income in euros and, moreover, only from employment. And here it can be a problem to get a mortgage to buy a home for a Czech working in Britain.

And I’m not talking about the situation when you do business in Britain. I know from the practice that this is an insoluble problem for many banks.


How banks deal with exchange rate risk

mortgage loan

I bet it was the first thing you thought of. What if there is a situation that strengthens the crown so much that I will not be able to repay Lite Lender mortgage? Fortunately, this is addressed by the already mentioned Consumer Credit Act.

Banks are obliged to inform you practically immediately if the exchange rate changes by more than 20%, and then they are obliged to inform you annually about:

  • mortgage balance
  • amount of individual installments
  • options to change the currency in which you pay the mortgage
  • what other measures you can take to reduce the exchange rate risk.

This is related to another obligation of banks to state in the mortgage loan terms and conditions under which you can change the currency in which you repay your mortgage.

If this option is not mentioned, then the bank will have to think of other measures to protect you against exchange rate movements.