It’s a wonderful feel to get behind the wheel of your own vehicle. Finding the appropriate car that meets your budget and objectives, is no easy task. Your car, aside from a home, maybe the most expensive investment you make. As a result, buying a used car rather than a new one makes sense. This is especially true when considering the associated fees, expenses, and depreciation rate. A used car will save you money while also allowing you to avoid sacrificing on the quality.
Need for opting for a second hand car loan
India’s used car market is thriving today because of their affordability and the ease with which used car loan is available. According to surveys, for every 100 new automobiles sold, 220 old cars enter the market for sale each year, totaling roughly four million units. Furthermore, the introduction of old car dealership firms into the market has increased people’s preference for used automobiles by ensuring that they are certified and well-maintained. This is when a used automobile loan can come in handy. Even if you have a limited budget, you may now easily achieve the status of automobile owner because it is a much more cost-effective option than buying a new car. A used car’s depreciation rates, as well as its insurance prices, are lower than those of a new car.
Loan on second hand cars are simple and convenient to obtain. First and foremost, make sure you meet the eligibility requirements. Most NBFCs need applicants to be between the ages of 21 and 65, with a minimum monthly income of INR 20,000 and one year of work experience. You must also send documentation for verification in addition to the application form. The loan will be assigned to your car dealer once it has been settled, and you will receive your vehicle shortly after.
Loan on second-hand cars: Considerations to make
The automobile loan business in India is one of the largest, and the used car loan market. In particular, is predicted to exceed $10 billion annually by 2021. It is simple to obtain a loan to purchase a used car because various banks and NBFCs deal in this type of finance. So, if you want to acquire a decent quality used car. You should consider a few factors before taking out a used car loan.
You can buy a used BMW worth rupees 30Lakhs at the worth of 1/3rd of its selling price. Isn’t it quite enticing? It’s easy to get carried away by the allure of having large cars at a low cost, but it’s crucial to first set a budget and then hunt for cars that meet your needs. You should be able to manage your monthly bills. Children’s school fees, and other EMI while taking out that loan to buy a used car.
Approved Loan Amount
The loan amount approved after a loan officer from the firm inspects the condition of the used car that the applicant intends to purchase. The parameters are flexible and differ from one lender to the next. Most of the time, the loan amount is just for 70-80% of the car’s value. So you’ll have to pay the balance in cash. Most lenders will not give loans to automobiles that are more than 5 years old because older cars will cost more to maintain.
The paperwork required for a used car loan can be extensive, and also most banks will only authorize. A loan after the owner or dealer has shifted the vehicle title to the buyer’s name. If the RC or Registration Certificate is not in the purchaser’s name, or if the policy has not been updated, they have the right to deny the loan.
Interest rates and loan terms
The average interest rate on a used car loan ranges from a low of 14 percent to a high of 20 percent, depending on the lender. They are typically more than new car loans, which typically run from 8-10 percent on average. The higher interest rate is primarily due to the depreciation of used cars. The loan term is also rather limited, with a maximum of 5 years to repay the amount.
New automobiles may smell nice, but buying a used car is the most cost-effective alternative available. From the initial cost to long-term costs to financing availability. You may now get cars at lower prices thanks to the availability of more reliable options on loan on second hand cars. All you have to do is make sure your vehicle is purchased from a reputable vendor and comes with a guarantee.