Are you looking for flexibility but don't want to buy your car with a huge one-off payment? Then a car loan is the right choice for you.

When you buy your car with a personal loan, you have the freedom to use your savings for other purposes or to invest them. You also have all the options open to you when choosing your car – whether it's brand new and shiny or used with character.

A car loan has many advantages, but also some disadvantages. That's why it's important to be well informed before making a decision. Gowago can help you with exactly that.

Our mission is to help you get a car that suits your life easily and hassle-free. To ensure this, we make sure that you make the right financing choice that fits your budget and meets your needs.
This article will give you the knowledge you need about car loans so you can make a confident decision. Here you will learn everything about the requirements, conditions, the role of the interest rate, the terms and much more. Let's go!

How does a car loan work?

– A car loan is ultimately a personal loan or consumer loan. Unlike leasing, you own the car from the outset.
– This means you can use your car however you want – drive as many kilometres as you want, insure it however you want, personalise it to suit your style or sell it whenever you want. You therefore enjoy more flexibility than with leasing.
– A down payment is not absolutely necessary. You can deduct the annual interest costs of the car loan from your taxes. However, you must bear in mind that you will bear the depreciation of the car yourself.
– Accordingly, you should not sell your car again after just 2-3 years. Otherwise, you will incur financial losses. The interest costs and monthly instalments for a car loan are also higher on average than for leasing.

Car loans in Switzerland: these are the requirements

As with a leasing contract, there are a number of criteria you must meet in order to obtain a personal loan for a car purchase. These criteria exist to protect you as a consumer from potential over-indebtedness and financial problems. If you meet them, you can truly afford the loan and can start your future with your new car with peace of mind.

Requirements for a car loan at a glance:

• You are at least 18 years old
• You are a Swiss citizen or have a B or C visa
• You have been living in Switzerland for at least 1 year
• You can provide 3 pay slips (for monthly wages) or 6 wage statements (for hourly wages)
• You have no outstanding debt collection proceedings
• You meet the conditions of the credit check
• If you meet these criteria, you can apply for a car loan from Gowago. Other credit providers may have different requirements for applying for a personal loan.
  
  

But what is a credit check?

A credit check involves checking your creditworthiness – this means that the credit provider checks databases such as ZEK or CRIF to find out about your financial history. Specifically, have you had any debts in the past? Do you pay your bills on time? Do you have any other outstanding loans?

A debt collection register extract is also requested from the debt collection office to ensure that there are no ongoing debt collection proceedings against you.

But don't worry, this is a completely normal process. Whenever you enter into a financial commitment such as a loan, a lease or a large payment on account, your creditworthiness and finances are checked. This allows banks and platforms such as Gowago to check whether the new financial commitment could put you in financial difficulty and at risk of becoming over-indebted.

How much do you need to earn to get a loan for your car?

There is no straight answer to this question – whether you are approved for a specific loan depends on your income and the loan amount. The credit check finds out exactly that: how much can you actually afford?

Lenders do not do this out of pure self-interest, but are obliged to protect you as a consumer under the KKG. It is prohibited to issue a loan that could cause you to become over-indebted.

Can I get a loan in Switzerland as a foreigner?

In theory, it doesn't matter where you come from. Whether you're from Germany, France, Italy, the UK, the wider EU or another country, you simply need to have lived in Switzerland for at least one year and have a B or C residence permit. If your credit rating is also in order, then let's go.
That's how it works at Gowago. We make it easy for you. However, not all providers of personal and car loans are the same. Some are stricter or have additional requirements. It is therefore best to check directly with the provider to be on the safe side.

When is a car loan worthwhile?

There are a few scenarios in which a car loan is a sensible decision:

• You cannot or do not want to invest all your savings in a car at once.
• You already know that you want to drive your car for a long time.
• You want full ownership of the car and the flexibility to do what you want with it.

1. You cannot or do not want to invest all your savings in a car at once.

Let's be honest: cars have become quite expensive in recent years, whether new or used. More technology, more safety features, more comfort – all positive developments, but ones that drive up the purchase price.

The base price of a new VW Golf is currently just under £30,000. With a few extras and more power, you can expect to pay almost £50,000. Prices are even higher for larger or more luxurious cars.
You also have to dig deeper into your pockets for used cars. If you want to buy a newer car in good condition that has already clocked up 50,000 km, you can expect to pay between £15,000 and £20,000.

‘Because cars are becoming increasingly expensive, financing methods such as car loans are becoming even more important. Not everyone can or wants to invest so much money in a car all at once.’

That's a lot of money that not everyone has lying around. Maybe you have children and want or need to spend your money on your family. Or maybe you've just finished your education and haven't had the chance to save up that much money yet, but you need a car. Or maybe you'd rather invest your money in a pension plan, a house or stocks. Or this. Or that. Or whatever.

There are many reasons why you might not want to spend tens of thousands of pounds all at once to stay mobile and flexible.

No matter what your life looks like, a car loan is the perfect way to finance your car, either in full or in part, so you don't have to pay everything up front.

Are you just looking to drive a car for 2-4 years and not spend all your savings at once? Then leasing may be the better option for you. To help you decide between leasing and a car loan, we have compared the two financing options directly.

2. You already know that you want to drive your car for a longer period of time.

A car loan is particularly worthwhile if you plan to drive the same car for 5-6 years or more. But why?

With clever future planning, you can avoid high costs resulting from depreciation. Due to wear and tear and constant technical innovations on the market, a car is an item that loses value. The first three years after initial registration show the most extreme loss in value: around 50% of the initial purchase price is lost. After that, the curve of depreciation flattens out and the price stabilises in a slower, steady downward trend.

‘Are you already sure that you want to drive your car for more than four years? Then a car loan is a good choice. This ensures that you don't have to give the car back early and you lose less when it comes to depreciation.’

The advantage of buying a car with a loan is that you are the sole owner. However, you bear the full cost of depreciation yourself. This means that you ‘lose’ money in the first few years after purchase, especially with new cars. Broken down into costs per kilometre, the mileage costs are therefore higher at the beginning.
However, the longer you keep the car, the more the cost per kilometre normalises. After more than five years of ownership, the costs of wear and tear and depreciation are in balance, meaning that the average cost per kilometre is lower.

‘After a few years of use, the car's depreciation is no longer significant. On average, over the entire period in which you have used the car, the mileage costs become cheaper again.’

Financially, it therefore makes little sense to sell a new car after less than three years, regardless of whether you buy it with a personal loan or in cash.

If you know from the outset that you want to change or return the car after 3-4 years, then leasing makes more sense. This alternative gives you more flexibility for your specific needs.

Find out more about leasing in our detailed guide.

3. You want full ownership of your car and the flexibility to do what you want with it.

With a personal loan, it's your car, your choice. You can live life to the fullest.
The car is yours, and you don't have to comply with any restrictions. What does that mean in concrete terms?

No mileage restrictions with a car loan

With leasing, it is common to agree with the leasing company on how many kilometres you will drive per year. The mileage packages available are usually between 10,000 km and 30,000 km per year.

But if you buy your car with a loan, there are no restrictions and you don't have to worry about exceeding a limit. Drive as often as you want and as far as you want. If you feel like it, you could theoretically drive around the world – with a loan, nothing stands in your way.

Free choice of insurance with a car loan

Your needs and your budget set the tone.

If you want to protect your car optimally, you can take out comprehensive insurance – but you don't have to. If you want to save some money, you can also opt for partial comprehensive insurance or even just third-party liability.

Nevertheless, if you are buying a new car or a recent model, it is usually advisable to take out comprehensive insurance so that you are covered for all eventualities. Comprehensive insurance covers you if the damage is your fault.

‘With a car loan, it is entirely up to you which type of insurance you choose. You can either get comprehensive cover with fully comprehensive insurance (advisable for a new car) or opt for the cheaper option of partial comprehensive or third-party liability insurance.’

Why? Imagine you suffer a total write-off after just a few months, through no fault of your own – for example, you skid off the road on a slippery surface or you have a rear-end collision because the car in front of you brakes suddenly. Things like this can happen suddenly and have nothing to do with negligence on your part.

Without comprehensive insurance, which covers damage you cause yourself, you would lose the entire value of your car in one fell swoop without compensation. Thousands of pounds would be gone and you would be left with the cost of the loan.

‘Comprehensive insurance is worth it, despite the price. Especially with new cars, you can ensure that you don't lose your investment if you cause a total write-off.’

A few years later, once the car has lost more of its value and spare parts may also be cheaper, you can always switch to partial comprehensive insurance or third-party liability insurance.

Save on service and repair costs

Your car – even with a dent.

With a lease, you have to adhere strictly to the service intervals and keep the car in good condition. All damage must be repaired before the end of the contract.

‘With a car loan, you decide which scratches or dents you want to have repaired. As long as the car is safe to drive, repairs are not mandatory.’

With a car loan, however, you decide which damage you want to have repaired and which you don't care about. From small scratches to larger dents – if it doesn't affect the roadworthiness and safety of your vehicle, you don't have to have any repairs done with a car loan.

Complete freedom of personalisation

Because the car belongs to you from the outset, you can personalise it however you want. Let's say you buy a VW bus with a loan and want to convert it into a camper van – no problem, let your creativity run wild.

Or you want to wrap it to give it a new colour that perfectly matches your style – go for it.

Fancy new rims? Different seats? A new exhaust system – with a car loan, it's all absolutely no problem.

‘A car loan gives you the freedom to choose whether you want to convert your car. Whether it's a camper van conversion, tuning or a colour change – it's your car, your decision.’

With leasing, modifications and conversions to the vehicle are not prohibited – in many cases, it depends on the leasing company and its terms and conditions – but in some cases you will have to restore the car to its original condition before returning it.

Car not right for you? No problem, you can sell it again straight away.

But why would you want to sell your car right away? Imagine:

• You are fulfilling a dream and emigrating to another continent and no longer need your car in Switzerland.
• You meet the love of your life and start a family – but now you need a bigger car.
• Something about your car annoys you so much that you just want to get rid of it.
• You receive a large bonus and no longer need the loan.
  

‘No matter how your life, tastes, finances or needs change, with a car loan you are in control of what happens to your car.’

How a car loan agreement works

A car loan is a form of personal loan, also known as consumer credit. It is governed by a contract between you and a lender, usually a bank or credit platform.

You choose the loan amount, term and, if applicable, a down payment. After your creditworthiness has been checked, the loan agreement is submitted to you for signature. You then have a 14-day cooling-off period during which you can withdraw from the agreement.

Once this 14-day period has expired, you're ready to go! Either the loan amount is transferred to your account and you purchase the car yourself, or, as is the case with Gowago, the car is purchased from the garage in your name. And then you can drive away.

You then repay the loan amount to the bank or financial institution in monthly instalments, which include the interest costs and portions of the loan amount.

Can you repay the car loan early?

With Gowago, as with other loan providers, you have the option of repaying the loan early. This gives you ultimate flexibility and freedom in your financial planning.

If you suddenly find yourself with some extra cash that you don't want to invest elsewhere, it may be a smart move to pay off your car loan in one large payment.

Why? Because this saves you interest costs that would accrue over the remaining term of the contract. Depending on the amount of your loan and the term you have chosen, the interest costs can be substantial.

‘With a car loan, you can repay your personal loan at any time.’

But don't forget why you chose a car loan in the first place – perhaps you wanted to remain liquid or invest your money in shares, a house or something else. So if you now have more money thanks to a bonus or, ideally, a lottery win, think carefully about whether you would rather invest this additional income instead of tying it up in a car.

However, it is not possible to pay off only part of the loan amount early. You either continue to make monthly payments or pay it off in full.

Can you sell the car early if you have a car loan?

With a car loan, you are the legal owner of your car from the outset. This means you can sell it at any time and then repay the loan.

This aspect of a car loan is an advantage over leasing, where you are contractually bound to a car for several years.

However, leasing is convenient because you don't have to worry about selling the car yourself at the end of the lease. If you want to sell a car that you financed with a personal loan, you are responsible for finding a buyer.

What is the down payment on a car loan?

With a car loan, you have the option of making a down payment at the beginning. Why is this an option at all? Well, with a conventional personal loan, you would simply borrow the amount of money you need from the bank. The bank doesn't really care what you buy with it.

With a car loan, especially with Gowago, you take out a personal loan that is linked to a specific product – the purpose here is to purchase a specific car.

The maximum loan amount for this loan is therefore the full price of the vehicle. However, you do not have to finance the entire amount of the car, but can pay part of the car with a down payment.

‘With a car loan, there are various sensible reasons for making a down payment. It reduces the interest costs, the monthly instalments and the loan amount.’

When does it make sense to make a down payment on a car loan?

• You have some of the money and want to supplement your savings with a personal loan.
• You want to reduce your monthly instalments.
• You want to reduce the interest costs incurred over the term of the loan.
• The purchase price of your chosen car is higher than the maximum amount offered by the bank as a personal loan.
• Your credit rating only allows you to borrow a certain amount, which does not cover the entire purchase price of the car.
  In fact, most customers choose to pay at least a small amount up front. After all, the purpose of a car loan is to buy a car. This means that you can really view the down payment as an investment.
  
  

Is a car loan a special-purpose loan?

Not always. The majority of car loan offers in Switzerland are normal personal or consumer loans. The term ‘car loan’ usually simply indicates that the loan is to be used for the purchase of a car rather than for other purposes. Legally, however, it is no different from a normal personal loan.

There are also special, purpose-specific car loans. But what is a purpose-specific loan?

A special-purpose loan is a type of loan that is specifically linked to the financing of a contractually agreed item. The item then serves as a pledgeable asset. In the case of a special-purpose car loan, this would mean that the car itself acts as collateral for the bank.

‘A car loan is not a special-purpose loan per se, but a normal personal loan that is simply used to purchase a car.’

In this case, special conditions are imposed, such as that the vehicle may not be sold during the term of the contract. However, there are currently very few providers of special-purpose car loans in Switzerland.

At Gowago, we give you complete freedom with your car loan. You can do whatever you want with the car, sell it at any time or pay off the loan early. No restrictions, for an unrestricted life.

Car loan with debt enforcement?

Can I get a loan if I have outstanding debt enforcement proceedings?

Basically, no. This is because the Swiss legal system stipulates that you cannot obtain a loan if it would cause you to become over-indebted. To check this, your financial background and payment history are examined in detail during the credit check.

Debt enforcement is triggered when an invoice remains unpaid even after several payment reminders. The invoice issuer then involves the state to collect the debt.

‘With entries in the debt enforcement register, you will not be able to obtain a loan – a measure designed to protect you from excessive debt.’

If you already have outstanding debt collection proceedings, this is fairly clear evidence that your expenses are already higher than your income, that you are no longer able to pay your bills on time, that you are simply financially unreliable or that you are already completely insolvent.

All the reasons why you might have an entry in the debt collection register are indications that your financial situation is unstable and that you therefore represent a risk to yourself and the bank.

Nevertheless, it is possible to obtain a loan even if you currently have entries in the debt collection register. But how is this possible?

Debt collection can happen quickly – you overlook a few reminders and suddenly there is a debt collection notice in your letterbox. And some companies are almost ‘debt collection fanatics’ and allow very little leeway.

But debt collection is not a death sentence for your desire to obtain a car loan. There are some scenarios in which you can get a car loan even with a debt collection register entry.

‘In order to obtain a car loan despite a debt collection register entry, you must first have the entry deleted, either by settling the debt or by contesting the debt collection.’

The prerequisite for a comeback after debt collection is the deletion of your entry. Even after the proceedings have been completed, debt collection entries remain registered for 5 years – even if the debt collection was unjustified, the debt was paid off or withdrawn.

To find out more about how you can have your debt collection deleted, read our blog post on ‘Leasing despite debt collection’. All information on dealing with debt collection also applies to car loans.

How is the monthly instalment for a car loan calculated?

The monthly instalment for your car loan is made up of the following factors:

• Loan amount: First, you choose how much you want to borrow. At Gowago, loan amounts between CHF 10,000 and CHF 100,000 are available.
• Contract term: Then you decide how long you want to take to pay off your car loan. Gowago offers terms of between 6 and 84 months.
• Interest rate: Interest costs are incurred over the term of the loan and are also included in the calculation of the monthly instalment. At Gowago, we offer an advantageous, uniform interest rate of 5.9%.
  
  

How high can the loan amount or credit amount be for a car loan?

Simply put: the higher the amount, the shorter the term and the higher the interest rate, the higher your monthly instalment will be.

The amount you pay each month for your personal loan to finance your car depends on the loan amount, i.e. how much money you have actually borrowed from the bank or credit company.

‘Gowago allows you to apply for a wide range of loan amounts. Choose loan amounts between CHF 10,000 and CHF 100,000.’

The specific amount of your car loan depends on the maximum amounts offered by the bank and your credit rating. The better your credit rating, the higher the maximum loan amount you can apply for.

Over what period can I repay the loan?

Contract terms of between 6 and 84 months are often offered. The longer the repayment period, the lower the monthly instalments. However, longer terms also mean higher interest costs over the entire repayment period.

What is the optimal length of a personal loan?

The optimal term depends heavily on your financial situation, your budget and the value of the vehicle.

As a general rule, a shorter term means higher monthly instalments but lower overall interest costs. A longer term means lower monthly instalments but is more expensive in the long run.

Here is a quick calculation to illustrate this:

You've found a super cool Mini Cooper Cabriolet on Gowago. The total price is £36,400 – a great deal. You can put down a deposit of £5,400 and cover the rest with a loan. But how should you configure your contract?

As you can see, the monthly instalment is lower with a longer repayment period, meaning that your monthly budget is lower. However, you accept higher interest costs in return.

Choosing the right contract term for repayment is therefore a balancing act between a more manageable monthly budget and lower interest costs. You have to weigh up what is more important to you.

In practice, a loan term of 48 to 60 months has established itself as a sensible compromise – especially for vehicles with high depreciation. This keeps depreciation and interest costs manageable, but your monthly instalments are not exorbitantly high.

If you really have enough money left over at the end of each month, then you should choose a shorter term. With a limited monthly budget, longer terms make sense so that you can still drive your dream car, because then the monthly instalments remain lower.

Try it out for yourself and configure a car loan for your dream car with the Gowago loan calculator.

Calculate your car loan

0% car loan: Is there such a thing as an interest-free car loan?

It is very rare to find offers where you can get a car loan with 0% interest. This ultimately means that the bank pays you a personal loan on which you do not pay any interest. In concrete terms: if you borrow CHF 25,000, for example, you only have to repay CHF 25,000 in monthly instalments. So you do not ‘lose’ any money through interest costs.

Hmmm, sounds almost too good to be true. What's the catch?

A 0% car loan is often a marketing promotion and the loan is often linked to specific vehicles. Instead of you, the consumer, paying the interest, the car manufacturer pays the interest on a 0% car loan.

‘0% interest rates on car loans are rare, but they do exist. This is usually a marketing ploy, so you should read the fine print carefully.’

You can think of a 0% interest rate as a ‘clearance sale’. Consumers are encouraged to buy a specific car model that the manufacturer still has in stock and wants to get rid of. There are also similar promotions for leasing, where the leasing interest rate is set at 0%.

As always, however, you should approach such a loan with common sense. Although you do not pay interest, fees may apply or high interest rates may apply if you are late in making your monthly payments.

How does instalment insurance work?

Or: What is PPI (Payment Protection Insurance)?

Although your financial situation is checked before you take out a car loan, none of these checks can predict the future.

What happens if you suddenly lose your job or are unable to work for health reasons and therefore have no income?

To prevent you from running out of money within a short period of time, various insurance companies and banks offer so-called instalment insurance. This covers part or all of your monthly loan or lease payments until you are able to work and earn money again.

‘Instalment insurance protects you if you are unable to pay your loan for health reasons or if you lose your job. You are then ultimately covered.’

However, in order to take out such insurance, further checks will be carried out on you. The provider of the instalment insurance naturally wants to be sure of the risk they are taking.

They will therefore check whether you have had a long stay in hospital recently or have any pre-existing conditions that could lead to incapacity for work. They will also check whether you are in a secure, permanent job or whether you have lost your job frequently in the past.

And regardless of the criteria for instalment insurance:

If you are in a difficult health situation that could potentially render you unable to work, or if your job situation is unstable, you should avoid taking on financial commitments such as a car loan or lease if possible. Health problems or unemployment are already major challenges in themselves, and you don't want to get into financial difficulties as well.

The end of the car loan

What happens at the end of the car loan?

Because you are the owner of the car from the outset with a car loan, nothing changes – you keep the car and can continue to enjoy it, drive it, personalise it or even sell it, just as you have done up to now.

But now the loan is paid off and you no longer have any debts to the bank. It's that simple.

How does a car loan work at Gowago?

At Gowago, you get an honest, fair and affordable personal loan to finance your dream car.

We offer you over 15,000 offers for new and used cars of all makes and models. So whether you want a small, practical VW Polo, a quiet and efficient Polestar, a spirited Alfa Romeo with character and heart, or an all-round Audi SUV – with us, you'll find the car that suits your lifestyle and your needs.

‘Gowago offers you complete flexibility in your choice of vehicle so that you can find the right car for your lifestyle.’

And unique to us – you can customise your car loan online to suit your car.
If you've fallen in love with a car, you can use our loan calculator to immediately adjust your loan to your budget.

Choose terms from 6 to 84 months, define your down payment and you'll see the monthly price that applies – there are no additional fees or hidden charges.

‘At Gowago, the price you see is the price you pay. We're fed up with the tricks of the car industry.’

That's why we offer a standard, fixed interest rate. Our 5.9% is available to everyone – no matter which car you choose or what your financial history looks like. This keeps things fair and simple.

Under the cost overview, you can also check the loan amount, the vehicle price, your down payment, the interest rate and the total interest costs. Everything look good? Great! Then you can proceed to checkout.

Everything is done online to make it as easy as possible for you. But don't worry, you're never on your own. Our excellent advisors will contact you personally and help you every step of the way with your loan application.

‘We offer a standard interest rate of 5.9%, regardless of the car. The loan amount or your personal finances do not affect the interest rate. 5.9%. Always.’

Would you like to take a test drive first? No problem – your advisor will find an appointment for you.

Once everything is ready, you can sign your contract completely online. No tedious paperwork, printing and scanning documents, or long postal delays. And at the end of the process, we will deliver your new car to your doorstep if you wish!

It's your car, with your financing. So you and your comfort are our focus. We take care of all the hassle, and you get to enjoy the fun of driving.


Check out our car loan offers now and discover a car that moves you!

Find your car!

Car loan questions and answers

What are the disadvantages of a car loan?

There are two theoretical disadvantages to a car loan:

• You don't have complete financial freedom. Let's be honest. Any type of financing, whether leasing, credit or subscription, comes with financial obligations compared to purchasing. This is because you then have to make monthly payments over a certain period of time and adjust your budget accordingly. But in return, you have the freedom to use your savings for other purposes. Whether this point is really a disadvantage depends on your priorities and needs.
  
• The monthly payments and interest costs can be higher than with leasing. Because with leasing, you only cover the depreciation and often a lower interest rate with your monthly instalments, your monthly expenses are lower. But don't forget: with leasing, you don't get to keep your car at the end. With a loan, however, you pay it off and can simply keep it at the end without any additional costs. So again, this isn't really a disadvantage. It's more a question of your preferences and your budget.
  

Because we offer both options at Gowago, you have ultimate freedom in choosing how to finance your car. This allows you to weigh up all the options.

Not sure yet? Our personal team of advisors will be happy to help you. Book a short consultation and you'll know exactly how to move forward.

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Who pays for service, repairs and other costs associated with a car loan?

Because the car belongs entirely to you, you have all the rights to use it as you wish, but you also assume all the obligations of ownership. This means that you have to cover all costs related to the car yourself – you must take this into account when planning your budget.

Don't forget these costs when planning your budget for a car loan:

• Insurance (free choice between comprehensive, partial comprehensive or third-party liability)
• Servicing
• Repairs
• Tyre changes
• Taxes and vignette
• Parking space/garage
• Fuel or electricity
  
  

Calculate exactly how much these costs will amount to each month – after all, you want to be able to drive your car without feeling guilty every time you start the engine.

Can I change the loan instalment?

No, you cannot normally change or adjust the loan instalment during the term of the contract. It remains the same from the start of the contract until the end of the loan and is invoiced to you on a monthly basis.

However, you have the option of repaying the loan in full at any time. This may make sense if you have the money available, do not want to use it for anything else and want to save the remaining interest costs.

What is covered by a car loan?

A personal loan agreement only regulates the total amount, the term, the interest rate and the monthly instalments of the financing. You must pay all additional costs out of your own pocket and organise them yourself.

Can you deduct a personal loan or car loan from your taxes?

In Switzerland, you can deduct the annual interest costs from your taxes or income, but not the entire outstanding loan amount. Swiss law allows this up to a maximum amount of CHF 50,000 per year.

So that you know how much you can deduct, the bank will send you a statement of the interest costs incurred during the year at the end of each year.

‘Unlike leasing, you can deduct the interest costs for a car loan from your taxes.’

Before taking out a personal loan, people often confuse the loan amount and the interest costs when it comes to what can be deducted from their taxes. They then think they can deduct several thousand pounds from their taxes – which would be great, but it's not the case.

Here is a quick calculation example of how this would work with a Gowago car loan:

For a car loan of £25,000 with an effective annual interest rate of 5.9%, the interest costs in the first year amount to around £1,475.
Assuming a tax rate of 10%, this results in a tax saving of around £148 in the first year.

⚠️ Please note: This is a rough estimate based on simple annual interest rates. In reality, if your monthly instalments remain the same, you will pay more interest at the beginning and less later on because the outstanding amount gets smaller and smaller. However, for tax purposes, it is usually the interest amount in the first year that counts – and this simple calculation works well for that.

Conclusion:

Whether you prefer to keep your savings, own your car outright or simply remain financially flexible, a car loan is a good solution for financing your car without committing to a lease.
The important thing is that you are aware of what suits you, your budget and your lifestyle.

At Gowago, we don't want to sell you anything – we want you to make the right decision. One that feels right. One that gives you mobility without restricting you.

That's why we not only offer you top conditions and full transparency, but also honest advice on an equal footing. And best of all, you can do everything online at your leisure – from the loan calculator to signing the contract.

So, you want a car that suits you? Then get financing that is just as flexible, fair and uncomplicated as you are. We'll help you get there.

A car loan from Gowago gives you full control to experience life with a smile.

Choose, apply, and drive away. Gowago. Move on.

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