Inbank and auto24 launched an innovative car exchange loan
This week, Inbank and car sales portal auto24 started offering a new car exchange loan with a 3-month period which gives customers an option to buy a new vehicle before selling their former car.
The car exchange loan is a short-term financing where a customer selling his or her car does not have to postpone purchasing a new car until the old car is sold. The customer can use the car exchange loan to buy a new vehicle immediately and it is possible to return the loan amount fully after successfully selling the old car.
“Our user statistics indicate that the cars purchased by private persons as well as companies are increasingly newer and more expensive year by year,” said Margus Tomberg, CEO of car sales portal auto24 which is the largest in Estonia. “At the same time, the average periods of sale for cars have gradually increased, reaching 52 days in the case of private persons and 73 days in the case of car sales companies,” said Tomberg.
According to Tomberg, many people selling their car in the auto24 website are interested in buying a new car that has higher quality. However, buying a vehicle or making a leasing deposit is often hindered by the fact that the funds from the sale of the old car are not yet available. “This in turn means that when finding a new suitable vehicle for yourself, there is an urge to sell the old car quickly and this may lead to an unreasonably low selling price,” said Tomberg.
According to Margus Kastein, General Manager of Inbank Estonia, the car exchange loan can be used for buying a new car, making a leasing deposit or paying the residual value of a leased vehicle before selling it.
“Taking into account the average period of sales for used cars, which is 1.5–2.5 months, the new loan allows the car seller to be more flexible when acquiring a new vehicle because the loan is paid to the customer almost immediately and it can be returned within three months,” said Kastein.
Last year, almost 114,500 unique ads were added to the auto24 environment, two thirds of them were ads uploaded by private persons. The average price of cars offered for sale increased over the last year by 561 euros to 8,932 euros.
“The car exchange loan complements the good cooperation between Inbank and auto24, during which we have been offering auto24 loan and leasing which have been received positively,” said Margus Kastein. “In 2015, as a first product, we began offering auto24 loan, and in June of last year, we added the auto24 leasing. The total revenue accumulated from these products is almost 74 million euros by today,” Kastein added.
The car exchange loan can be taken in the amount of 3,000 to 10,000 euros with an affordable monthly interest rate of 1.25%. The customer will immediately receive a response to the loan application and the money for purchasing a new car is transferred to the customer’s bank account within one working day. In the case the recipient of loan is unable to sell the car within 3 months and return the loan amount, the loan schedule is extended to 6 to 72 months according to the customer’s wishes. More information can be found on the webpage of the car exchange loan.
Inbank started its banking activities in 2015 and provides services through internet bank and partner network. Inbank is active in Estonian, Latvian, Lithuanian and Polish consumer financing markets. In addition, international deposits are raised from German, Austrian and Dutch markets.