Best Car Loans in Germany in 2023

Cars aren’t cheap in Germany. According to the statistics, new cars were sold for an average of 37,790 EUR in 2021. You might not have the full amount to pay for a car purchase in cash. For this reason, we’ve curated a list of the best car loans in Germany that’s also inclusive to foreign nationals. Furthermore, both used, and new cars can be financed with a loan with a reasonable interest rate.

You can choose between various car loans and car financing options in Germany. Generally, a car can be financed with a classical installment loan, through a car dealer, or via three-way car financing. The best car loans can be found on platforms like Smava, Auxmoney, and Tarifcheck. 

A car loan is a solution for most car buyers in Germany. Therefore, financing a car purchase is as straightforward as it gets. Where can you finance your future car, and which providers can give you a low-interest rate? You can learn this and more in this article about the best car loan companies in Germany.

Also read this article on how to get a car loan in Germany.

Loans From the Car Dealer

When buying a new car in Germany, you might also consider financing it via car dealers. In fact, some people prefer to finance their vehicle directly at the car dealership.

Financing through a car dealer offers different advantages, such as an easy and speedy process. You can select the car, request financing, and get a loan right there in one spot. Moreover, the interest rate on a car loan in Germany is often pretty low. In some cases, even zero-percent interest rate is possible.

Although buying a car via a car loan from a dealer might seem cheaper than a bank loan, you should consider possible pitfalls. Firstly, you need to check all conditions before signing anything.

For example, unscheduled repayments and early redemption of the loan are impossible or expensive. Moreover, the car loan from the dealer is often restricted to an individual car.

Interest Rates in Germany

Here is an example of typical interest rates for financing a new car:

	Price of the Car (with a loan)	Loan Term	Low-Interest Rate	Average Interest Rate	High-Interest Rate
Car	18,200 EUR	48 months	2.24%	3.99%	8.88%

Best Car Loans Germany

Many banks in Germany provide car loans for private clients. Auxmoney provides the easiest car loan in Germany with minimal requirements.

Some of the best car loans in terms of conditions, ease of application, and approval rates can be found on loan comparison platforms Smava and Tarifcheck. 

Furthermore, below, you can see the car loan conditions in the largest German banks when borrowing 20,000 EUR for 60 months (classic car loan). To better help you, here are the best car loans in Germany.

1. Smava

Smava is one of the favorable solutions for a car loan in Germany. It’s the biggest online financing marketplace, where you can:

• Find
• Select
• Apply
• And receive a loan in Germany

They help you to pick the best loan and terms among 70 available options from over 20 German banks. Smava even has insurance advisors to assist you with your car insurance concerns. 

For any help, you can contact one of 200 loan advisors. A personal loan from Smava can be used for any purpose, including purchasing a car.

Steps to get a car loan with Smava

1. Submit all required information, such as term and loan amount.
2. Enter your personal data. After, you will receive loan offers from different banks in Germany.
3. Select the bank and apply for a desirable loan directly from the platform.
4. You will receive your money quickly if your documents are complete and all requirements are met.

Read our full review on Smava.

2. Postbank

Postbank is another favorable solution for a car loan in Germany. It offers an installment loan with low-interest rates, flexible repayment options, and no hidden fees. You can use this loan for any purpose, including purchasing a car. 

Postbank also provides a car insurance service that covers various risks and damages.

Steps to get a car loan with Postbank:

1. Choose your desired loan amount and term. You can borrow from 3,000 to 80,000 euros and repay it in 12 to 120 months.
2. Fill out an online application form and submit your personal and financial information. You can also use a digital signature to sign the contract online.
3. Upload your income proof and identity verification documents. You can also use a video identification service to verify your identity online.
4. Receive your loan approval and money within a few days. You can also make a down payment to reduce your monthly payments and interest costs.

Postbank’s car loans offer competitive down payment and interest rates, a straightforward application process, and the trust and reliability associated with a renowned financial institution in Germany. 

Whether you’re looking to purchase a new or used car, Postbank can be a reliable partner in making your dream of owning a car a reality.

3. Verivox

Verivox is the largest German platform to compare loans, electricity & gas plans, car insurance, and internet deals. 

Their comparison tool includes a wide range of German banks you can choose from. Loans up to 100,000 EUR for up to 10 years are available. All inquiries via Verivox are SCHUFA-neutral.

When picking your loan to buy a car in Germany, pay attention to the annual percentage rate (effektiver Jahreszins) and the nominal interest rate (Sollzins). The annual percentage rate is usually higher than the nominal interest rate because the latter doesn’t account for the buyer’s other accrued expenses.

Features of Verivox:

• The interest rate starts from 0.0%
• 100% digital
• Same-day processing is possible
• Special repayment
• Payment pauses possible
• SCHUFA-neutral

4. Auxmoney

Auxmoney is a peer-to-peer lending online platform that eliminates the high cost and complexity of financing via traditional banks.

The loan application process happens online and is straightforward and fast. Auxmoney made lending as easy and transparent as possible.

Over the company’s history, Auxmoney has given over 325,000 loans of more than 2 milliards EUR. Auxmoney is rated as 4,8 out of 5 in service and offerings.

The main requirements:

• You are resident of Germany, as proven by a residence permit
• You have a current account with a German bank
• You have a regular income

After fulfilling these requirements, you can receive a loan from Auxmoney within 24 hours or the next few days.

From our research and experience, Auxmoney is by far the best and easiest place you can get a loan as a foreigner; the refusal rate is very low, as well as the requirements. It’s a private organization powered by investors’ funds, which is different from the traditional bank.

Read the full review on Auxmoney.

5. Tarifcheck

Tarifcheck is a well-known platform in Germany that offers a variety of financial services, including comparisons for unsecured loans from different German banks. They specialize in providing customers with a comprehensive overview of loan offers available in the market, including options for car loans.

If you’re considering purchasing a car in Germany, Tarifcheck can assist you in finding suitable financing options, especially if you don’t have enough money. They collaborate with various car manufacturers and financial institutions, such as Audi Bank and most German banks, to present you with competitive and attractive car loan deals.

Highlights of financing options from Tarifcheck:

• Tarifcheck.de offers balloon financing.
• It allows you to make lower monthly installments and competitive rates during the loan term.
• A larger payment, known as the balloon payment, is deferred to the end of the loan.
• Ballon financing benefits those who prefer more manageable monthly payments while planning for the final payment.

When evaluating loan options through Tarifcheck, pay attention to the annual percentage rate (APR), as it represents the total cost of borrowing, including interest and additional fees. Comparing APRs can help you determine the most cost-effective loan for your car purchase.

Whether you’re a resident or an expat, Tarifcheck provides valuable assistance to anyone looking for a car in Germany and seeking the right financing solution. Utilizing their platform allows you to navigate numerous loan offers and evaluate their terms and monthly rate offers. 

6. CosmosDirekt

CosmosDirekt is a leading insurance provider and financial institution in Germany, offering a range of services, including installment loans for various purposes. Whether you need financing for buying a car or any other personal expenses, CosmosDirekt provides flexible and accessible loan options to suit your needs. 

CosmosDirekt Advantages

• Possibility of securing a loan without the requirement of a down payment. Their personal loans allow borrowers to finance the full amount needed without upfront costs.

• Provides competitive interest rates and transparent terms, ensuring that customers understand the cost of borrowing. 
• They prioritize customer convenience, and having a bank account with a German bank is typically required to facilitate the loan process.

• CosmosDirekt offers follow-up financing options for customers who have already taken out a car loan with them or other lenders like Audi Bank. 
• The company allows borrowers to adjust their monthly installments or extend the loan term based on their current financial situation.
• Their user-friendly loan calculator assists customers in determining the best loan option that suits their needs. Borrowers can choose a longer period for repayment, which can be beneficial for managing their monthly budgets effectively.

CosmosDirekt caters to various customers, including private individuals and foreigners, making it accessible and easy to get a loan regardless of nationality or residency status in Germany.

Whether you are a resident or expat in Germany, CosmosDirekt’s services provide reliable loan options backed by a trusted financial institution, helping you easily achieve your financial goals, including buying a car. 

Their customer-centric approach, flexibility, and competitive interest rates make CosmosDirekt a preferred choice for individuals seeking reliable financial solutions.

Tips For Choosing The Right Car Dealer

• Research Reputation: Look for car dealers with a solid reputation in the market. Read customer reviews and ratings to gauge their reliability and customer service. 
• Variety of Inventory: Opt for a car dealer with a diverse inventory. Multiple options allow you to choose from various models and makes that fit your budget and financing preferences, such as considering an “installment loan” or making a “down payment.”
• Transparent Pricing: Choose a car dealer that offers transparent pricing. Hidden fees or additional costs can impact your budget and loan calculations. A reputable dealer should be upfront about all costs involved, whether related to the car’s price, financing, or any add-ons.
• Financing Options: Ensure the car dealer provides suitable financing options, including “installment loans” or options for a “down payment.” A dealer with strong connections to financial institutions can offer competitive financing terms that align with your needs.
• Customer Service: Evaluate the level of customer service provided by the car dealer. A reliable dealer will prioritize your satisfaction, address your queries, and guide you through the financing process, especially if you’re considering an “installment loan” or a “down payment” for your car purchase.

By considering these tips, you can select a reputable car dealer who offers the right financing options, such as “installment loans” or assistance with a “down payment,” to ensure a smooth and enjoyable car-buying experience.

Car Loan Providers in Germany

Where can you get a car loan in Germany? Loans can be taken in various places:

Home bank: 

Most people in Germany apply for a car loan at the bank they already have a bank account at. Branch banks are trustworthy lenders. Some banks require the car as collateral for financing the desired loan and deposit the registration certificate Part II until the loan is paid off.

Bank of the car manufacturer or car dealer: 

Many car manufacturers have their own banks from which you can borrow money for financing. Besides, car dealers will offer you to finance a car too. Dealers and car banks often advertise favorable 0% financing. But it’s not always true.

Dealers and car banks often keep ownership of the vehicle to themselves until the loan is paid off. Hence, it’s worth considering the offers of independent credit institutions.

Online and direct banks: 

Online and direct banks often offer great terms for a car loan, which can be even more favorable terms than many branch banks. Our recommended online loan providers are Smava and Auxmoney. The main advantage of these loan providers is that they often don’t require vehicle documents to be deposited as collateral.

Your own (current) bank or a partner bank is usually the best option for a car loan. Unlike other banks, they know your creditworthiness and can quickly approve your request when you get a loan.

Standard banks provide competitive rates of interest to their customers. So you can try approaching your bank for a loan if you want to buy a car.

The main drawback is that they might not always have the best interest rates on the repayment period.

In addition to the main banks, you should check the offers of direct banks. Car financing online with a direct bank often offers a cheaper loan instalment than financing your own car through a branch bank or similar financial institution.

Direct banks employ less staff and don’t have physical branches in Germany; hence, their costs are lower.

In any case, you should have a decent SCHUFA (creditworthiness) in Germany. Check your SCHUFA score before applying for a loan.

Check out the best loans in Germany in this article.

Car Financing in Germany

Car financing is very common in Germany. Whether you buy a new or used car from a dealership, car manufacturer, or private seller – you can finance it with a loan. According to the DAT Report 2022, 66% of all new vehicles purchased in Germany are financed by an installment loan or a loan offer from a car dealer.

For used cars, this number is 50%. Moreover, most loans taken out in Germany are spent on buying a car. In fact, 56% of all installment loans are used for car financing.

On average, a typical new car financing is 19,900 EUR for 49 months and 13,300 EUR over 50 months for used cars.

Here are some more statistics on German car buyers:

• About 34% of all car buyers in Germany purchase their vehicle in a car.
• 56% prefer car financing.
• About 10% choose to lease a car instead of buying it.

When selecting a car loan, make sure to specify car financing as the intended use. Such loans are often cheaper than general ones, even when considering the interest rate.

Steps to take when financing a car in Germany:

1. Plan

First, determine what type of car you want, whether a new or used car, how much you drive per year, and how much money you have to buy it. You should also decide which car financing is best for you, e.g., car dealership, car lease, installment loan, or balloon financing.

2. Compare

You can find and compare car prices, models, and financing terms, including the interest rate and additional costs, beforehand with the help of the Internet. You can use various online loan calculators such as Tarifcheck or Smava. A loan calculator will make it easier to determine how much you will have to pay in monthly instalments.  

On the Smava platform, you can apply for a loan at some of the most popular banks in Germany, including Commerzbank, Deutsche Bank, Barclays, Bank of Scotland, and Santander.

Compare the best loans in Germany by using the tool below:

3. Negotiate

Decide on the car model and equipment you want in a new car. Afterward, you can negotiate a discount on the loan amount or a more favorable lease term.

Lastly, to get any type of car loan/financing, foreign nationals must have their primary residence and a source of income in Germany.

Also, check out How To Get a Car Loan in Germany? [2023 Guide]

Requirements for a Car Loan in Germany

To successfully receive a car loan in Germany, you must meet the essential requirements such as:

• Be at least 18 years old.
• Prove your permanent residence in Germany with a residence permit.
• Have a regular income and a good credit rating.

Generally, lenders are less strict with requirements for car loans because the vehicle serves as collateral.

SCHUFA – German Credit Score

Most German banks will require a SCHUFA report when you apply for a car loan. You can check your current SCHUFA score on this website.

If you are looking to buy a car in Germany, read our article on the cheapest cars in Germany and some other car-related posts:

1. Can a foreigner buy a car in Germany?
2. Used car prices in Germany
3. Getting a car loan in Germany
4. How to buy a car in Germany for export
5. Best websites to buy a used car in Germany
6. Car insurance in Germany
7. Cheapest car insurance in Germany
8. Buying vs leasing a car in Germany
9. How much does it cost to own a car in Germany?

Final Thoughts About The Best Car Loans Germany

Cars in Germany can be expensive, but owning your dream vehicle becomes more attainable with the right car loan. Platforms like Smava, Auxmoney, Tarifcheck, and Verivox offer many loan options, including installment loans and down payment assistance. 

CosmosDirekt, a trusted financial institution, also provides competitive rates and flexible repayment terms. To make the right choice, research reputable car dealers, consider financing options, and prioritize transparent pricing and customer service.

Find the best car loan for your needs and explore the options offered by these companies. Click the links to learn more about each provider and help support our blog. Making an informed decision will ensure a smooth car-buying journey, so start today!