The term ‘used-car’ refers to a vehicle that is being sold for the second time or even more than that. As a matter of fact, the used car market in India is thriving. According to the latest statistics, the ratio of new cars to used cars is 1:3 – which further means that for every 100 new cars being sold, 300 used cars/pre-owned cars come in the market for resale.
Over 4 million units of used cars are estimated to come in the market every year. This is 50 percent more than the sale of new cars. On the other hand, most financial institutes claim that there has been a rise (over 12 to 18 percent) in the used car loans in the market.
Wonder what is a used car loan? Here, take a look at this guide to know everything about used car loans.
First, let us understand the reasons behind the growth of the used car market.
- It reduces the ownership period
- It is very affordable
- Has better availability of platforms for buying and selling of used cars
- Change in perception
- You can own more than one car
- Quite an increase in the ownership of cars due to cab services
- Ease in the availability of second-hand car finance
If you are planning to purchase a used car by taking a loan, there are certain things that you need to consider.
Following are five things that are to be considered when applying for used car finance:
1. Interest Rates
Availing the best in the market used car finance interest rates is not that easy. So, before you apply for a used car loan, make sure that you are conducting proper research on different loan providers in your area. Settle for a deal that is best suitable for your requirements.
It is noteworthy that the rate of interest will determine the amount you have to repay. However, do not let this be the deciding factor. There are multiple other factors that you need to consider, including the credibility of the lender.
Before finalizing the purchase of a used car, make sure that you check all the documents. The Registration Certificate (RC) book needs to be clean. If you purchasing a used car by taking a loan, then your lender might want to know whether or not all the documents of the asset are clear. They will evaluate your loan application and value the vehicle independently as well as based on internal parameters before approving your loan.
3. Loan Tenure
Nothing is better than having a clearly laid out loan repayment schedule with minimum foreclosure charges. Many lenders have an EMI calculator tool on their website that calculates the amount you have to pay for each month. It is advisable to try multiple combinations of the loan amount, rate of interest and tenure, to determine which EMI amount best suits you.
4. Valuation of the Vehicle
This happens to be one of the toughest parts of financing a used car. While a new car comes along with a definite price tag, estimating the resale value of a used car is not that simple. When calculating the amount, you need to take into consideration
- The number of kilometers driven
- The user profile (personal or commercial use)
- The place of usage (vehicles from flood-prone areas are not usually preferred)
- Accidents or modifications made
- A clear title of the car
5: Loan Process and Processing Fees
Most lenders charge a processing fee for loan application and doing all the paperwork. The amount is dependent on your loan amount, tenure and the down payment you make. Before you finalize your loan, make sure you seek information regarding the same.
The Final Thought
Bajaj Finserv Used Car Finance available on Finserv MARKETS will provide you with used car benefits like value-for-money purchase, flexible EMI repayments options, and quick disbursement. Moreover, with Finserv MARKETS, you do not have to worry about any hidden charges.
So, why wait? Apply for Bajaj Finserv Used Car Finance with Finserv MARKETS, today!
Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!