In India, millions nurture the dream of bringing home a four-wheeler that gives them freedom, independence and a sense of achievement. And while buying a brand new car may not be pocket-friendly for many, a second hand car can be the perfect alternative. Naturally, the used car market in India is booming, thanks to better affordability, lower insurance and maintenance charges, and less depreciation costs than new cars. To keep up with this trend, leading financial institutions are offering attractive second hand car finance options that come with low interest rates, flexible tenures and satisfactory loan to value ratios. So, check out the top reasons why you should go for a second hand car loan instead of paying in cash:
• High Loan Amount – The high loan to value ratio usually offered on second hand cars makes it easy for you to get a loan amount covering up to 80% of the car value. Some providers also provide 100%. So, check with your lender about the same, so you will have an idea about how much down payment to make. Compare the offerings of different lenders, and if you have a good credit score, you can easily negotiate the terms and conditions in your favour.
• Interest Rates – Even though the interest rates on second hand car finance options are slightly higher than auto loans for brand new vehicles, there are a number of financial institutions that provide used car loans at competitive rates. Again, borrowers with good credit score can negotiate this point and bring down the rates further.
• No Financial Burden – Buying a used car through financing allows you to get your dream car without really feeling the pocket pinch. With due diligence and research, you can get a high loan amount too, so that you don’t have to pay much towards the down payment. Also, thanks to a large number of lenders offering second hand car loans, it is easy to get one at low rates of interest. This way, your EMI payments will be further reduced.
• Flexible Terms – Second hand car loans are available at flexible terms from different lenders as far as loan amount, interest rate and loan tenure are concerned. You can also opt for the repayment method that is most convenient for you. Different repayment methods like pre-payment, PDC, ECS, and auto-debit are available as per the borrower’s ability.
• Easy Eligibility and Minimal Paperwork – Most financial institutions have easy eligibility criteria for second hand car loans, which make it easy for many to get a loan and buy a used car. Also almost all lenders have an online process in place for loan application, wherein the borrower simply needs to fill up a form, submit soft copies of documents (KYC documents and income statement) and click submit. The approval process is quick and funds are disbursed to the borrower’s bank account within 24-48 hours.
To wrap up, going for second hand car finance to buy a used car makes complete sense if you are keen on affordability or new to driving. Plus, the maintenance, insurance and depreciation aspects will give you less headache when you buy a used car. All you need to do is ensure that you’re buying a popular model that is still in the market to get a good deal.
