Financial institutions offer a special car loan for civil servants

Banks offer auto loans at reduced rates compared to non-earmarked installment loans, since the security of the financed car significantly reduces the risk of loan default. At the same time, they compete with the vehicle manufacturers’ car banks. In view of the security of their jobs, civil servants are popular credit customers and in many cases receive special conditions. Are special conditions for civil servants also possible for car loans?

The credit in the dealership

The credit in the dealership

Like every lender, the auto bank classifies the creditworthiness of public servants as above average and is happy to grant a car loan for civil servants. Thanks to their excellent creditworthiness, manufacturers’ banks are often willing to waive a down payment from official borrowers, even with high purchase prices. In most cases, they do not offer an interest rate advantage to civil servants, since the interest rate is already extremely low. Special conditions for auto bank loans are also not dependent on the employment status of the borrower, but on the necessary sales promotion measures for individual models.

The banks of the vehicle manufacturers offer car loans for civil servants in different variants such as conventional financing of the full car price, leasing, financing with low rates and a high closing rate (balloon financing) and flexible three-way financing. Many civil servants want to replace their new car after a small number of years and therefore choose three-way financing or conventional vehicle financing, the duration of which does not exceed the planned period of use.

The car loan for an official through a commercial bank

The car loan for an official through a commercial bank

If the official takes out his car loan from a commercial bank, he can negotiate a large discount on the vehicle price in the dealership. With good negotiating skills, this is higher than the interest rate difference between a loan from the Car bank and a loan from the commercial bank. It is striking that many banks grant vehicle loans on special terms, but only a few financial institutions offer a special car loan for civil servants. This practice is explained by the fact that vehicle loans are already cheaper than simple installment loans.

In addition, the safe employment status of an official in vehicle financing offers less benefit in terms of loan security than in simple installment loans, since the vehicle’s transfer of ownership already serves as a deposit for the repayment. This means that financial institutions that specialize in lending to public servants and people of equal status almost exclusively offer a car loan for civil servants. As an alternative to a car loan, official vehicle buyers can use the uncommitted official loan.

Depending on the credit institution, this is equipped with the same or higher benefits than a vehicle loan, and the car buyer no longer has to assign his new car as security. There is no contractual obligation to take out comprehensive insurance when using a civil servant loan as a car loan for civil servants, but the corresponding insurance protection is essential for the vehicle buyer so that he or she does not continue to pay installments for a car that is no longer available after an accident or theft.


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