"Be Sure to Carefully Review Financing When Buying a Car"

Introducing 100 Ways to Maximize Auto Financing with Hyundai Capital

Cars are high-value assets second only to real estate. Consumers carefully consider the overall specs, options, design, and price of a car. However, cautious consumers suddenly become less attentive at the 'auto financing' stage. They simply choose financial products based on installment interest rates and the number of months. Selecting financial services that suit one's needs can provide greater benefits. Hyundai Capital, the exclusive financial company of Hyundai Motor Group, introduced 100 ways to maximize auto financing on the 15th.

When purchasing a car, consumers consider factors such as loan amount, interest rate, and the proportion of monthly payments to income (Debt Service Ratio, DSR). Most financial companies allow customers to choose only the new car installment period and the corresponding interest rate. Hyundai Capital offers more options beyond just lower interest rates or longer installment periods.

'Hyundai Motor Mobility Installment' and 'Kia M Installment' are representative products of Hyundai Capital. If the down payment is made using a Hyundai Motor exclusive card or an M-series Hyundai Card, an interest rate discount is available. These are typically the lowest interest rate installment products offered by Hyundai Capital.

Hyundai Capital also offers variable interest rate products for new car installments. Hyundai Capital was the first in the industry to launch variable interest rate products. The key feature is that the loan interest rate changes every three months according to market interest rate conditions. Many consumers choose this product to benefit when a decline in the base interest rate is expected. If the down payment rate is 1% or more, it is advantageous to set a down payment since the interest rate is about 0.8 percentage points lower than not making a down payment.

There is also a 'grace period installment' product designed for customers whose financial situation is not stable immediately, such as new employees or new business owners. This product requires interest-only payments for the first year, with principal and interest payments spread over the installment period, minimizing the initial monthly payment burden. There is no early repayment fee, so if a lump sum is available during the installment period, it can be repaid without burden.

Hyundai Capital offers various products that significantly reduce monthly payment burdens during the installment period or provide useful services.

The 'Hyundai Motor Vehicle Return Deferral Installment' and 'Kia K-Value Installment' products allow up to 70% deferral of the installment principal payment, with the balance payable at the contract maturity. This reduces the monthly payment burden compared to regular installment products. At maturity, the deferred principal can be repaid. If funds are tight, the customer can sell the used car to repay the balance and switch to a new car.

For customers who prefer leasing or renting instead of buying, Hyundai Capital offers the 'Direct Car Lease/Rent' product. It is cheaper than regular products and offers the first month’s payment free for all vehicle models. For electric vehicles, the first two months’ payments are free. Estimates and contract applications can be completed via smartphone. Even popular models with long waiting periods after contract can be delivered quickly.

Using Hyundai Capital financing can help defend the price when selling a used car. The 'Hyundai Motor Vehicle Return Deferral Installment' and 'Kia K-Value Installment' products guarantee up to 70% of the new car price depending on the vehicle used and the period.

Hyundai Motor vehicles guarantee residual value for 24 to 60 months. For example, the Avante guarantees 70% residual value at 24 months, 65% at 36 months, 55% at 48 months, and 45% at 60 months. For Kia vehicles, residual value guarantees start from 36 months. If the used car market price at maturity is higher than the residual value, the difference is refunded. Residual value guarantee products are useful when the used car price market is unstable or when using vehicles with high depreciation rates.

The economic value of financial products that guarantee a certain level of used car price can be much greater than that of low-interest installment products. Assuming the purchase of an electric vehicle worth about 55 million KRW and using about 30 million KRW in installments, the difference in interest rates between the highest and lowest financial companies is about 1 percentage point. Comparing total payments over 36 months with equal principal and interest payments shows a difference of about 500,000 KRW. Now, consider the expected used car price after three years. Typically, used electric cars do not exceed 55% of the new car price after three years. However, using Hyundai Capital’s product that guarantees up to 60% of the used car price can yield over 2 million KRW more.

Additionally, Hyundai Capital supports customers in selling their used cars through the 'Sell My Car Service.' By applying for 'Sell My Car' on the official Hyundai Capital application (app), a professional appraiser evaluates the car for free, and then bidding competition begins. Auction companies such as K Car, a direct used car platform, AutoPlus, and AutoHands participate. Customers can select the highest bid among the auction prices and sell at that highest price without depreciation or negotiation.

A Hyundai Capital official stated, "Hyundai Capital possesses high expertise and the widest product spectrum in the auto financing market, handling both new and used car installment and lease products to meet diverse customer needs. We continuously research what customers need from the time they buy to when they sell a car and actively reflect this in our financial services."