The pre-owned car market is gaining ground at a fast pace in India. This is largely due to the fact that brand new cars depreciate in value the minute they roll out of the showroom. But this problem can be minimized with a used car. Thanks to the pre-owned car market, it is now possible for you to get even the latest models at a fraction of the cost of a new car. Given the ease of availability and affordability, more people are flocking at pre-owned car outlets these days. Naturally, the demand for used car finance is also at an all-time high. So, this article explores all that you need to know about such loans, including benefits, documentation and eligibility criteria. Read on.
Benefits of used car loan
High loan amount – You can get a loan amount of up to 80% of the cost of the car. This is a decent amount that covers a major portion of the expenditure. Bear in mind that cost of used cars is already quite reasonable, and therefore, with used car finance, you won’t feel the pinch in your pocket.
Competitive interest rates – Although used car loans command a slightly higher rate of interest than normal car loans, there are several financial institutions in the market offering such loans. Hence, interest rates are competitive. So, there’s a chance that you can get a good deal, provided you have done your homework.
Flexibility – Used car finance offers a lot of flexibility to the borrower as you can negotiate on the loan amount, loan tenure, rate of interest etc. Remember, as far as cost of used cars is concerned, there is a lot of room for negotiation. Talk to your dealer. This will also reduce your principal loan amount borrowed, and subsequently, the tenure and rate of interest too.
Minimum paperwork – These days, many lenders have switched to the online mode and have digitized their lending process. In fact, almost all NBFCs and financial institutions have started offering loans online, whereby, everything right from loan application to document submission, and approval to disbursal is done online. The borrower simply has to fill in an online application form, upload the soft copy of required documents, and wait for the approval. Once the loan request is approved, the amount is disbursed directly to the borrower’s bank account.
To avail used car loan, you need to fulfill the following eligibility criteria:-
• You should be of age 18 years or above
• You should be an Indian citizen
• If you are salaried, you should have been employed for at least a year
• For self-employed and business professionals, a minimum of 1 year in the current business is required
The following documents are required for a used car loan:-
• Valid ID and address proof
• Valid income/bank statement
• Passport size photograph
When it comes to used car finance, interest rate and terms of loan differ from lender to lender. So, your best bet would be to do a bit of research and gather rate information from different lenders and then choose the one that best suits you. Or, if you already have a steady financial partner, you could talk to them and negotiate the terms.
From initial spending, loan availability to long term value, buying pre-owned cars can prove to be a wise move. Owing to an expansive dealer market, it has become even easier to get your dream car in the pre-owned segment at a fraction of the cost and at an attractive rate of interest. Just make sure you are dealing with a reputed dealer and get everything checked, including the mechanical and physical aspects of the car, warranty etc.