Frequently asked questions about car loans (FAQ)

With a car loan, a bank or financial institution lends the borrower the amount needed to purchase a vehicle. The loan is then repaid in monthly installments. These installments consist of a portion of the loan amount plus the agreed-upon interest. Once the loan is fully repaid, ownership of the vehicle transfers to the buyer, free of debt.

• Legal age (at least 18 years old)
• Primary residence in Austria
• Bank account in Austria
• Valid photo ID (e.g., passport or national ID card)
• Regular, verifiable income (e.g., pay stubs, employment contract)
• Creditworthiness (credit check), or alternatively, a guarantor
• Vehicle details (e.g., purchase price, make, etc.)

This depends primarily on your individual situation and personal priorities. If you need a vehicle immediately but cannot or do not wish to pay the full purchase price upfront, financing through a loan could be a sensible solution. With fixed monthly repayments, you can budget effectively.

The most important difference lies in the ownership of the vehicle. With a loan, you buy the car in installments and repay the purchase price. Once the loan has been fully repaid, the vehicle becomes your property. With leasing, however, you only pay for the use of the car for a specific period of time. The vehicle remains the property of the leasing company and is usually returned or exchanged for a new model at the end of the contract.

Your monthly payment is determined by several factors, including the loan amount, interest rate, loan term and any upfront payments. Generally, the longer the loan term, the lower the monthly payment, though this can result in higher total interest costs. Additionally, the loan repayment amount is affected by any potential remaining balance.

Not necessarily. Some financing models allow you to receive financing without making a down payment. However, paying a deposit can be a viable option, as it reduces the loan amount and often results in lower monthly payments or better terms.

No, with a typical car loan, you do not legally own the vehicle in full while the loan is still outstanding. Once the loan has been paid off in full, however, you become the unrestricted owner of the vehicle.