Are you looking to buy your dream car? Are you thinking of buying a used car over a new one? Due to their many advantages over new cars, second-hand cars have seen a rise in demand. There are many options available for used cars on the market today. With a second-hand loan you can also purchase a car. Pre-owned vehicles also have benefits like a lower price and a slower rate of depreciation than new cars.
You might be hesitant about buying a used car for your first car. These are the five benefits of buying a used car in India. Here are some tips to get a loan for your purchase.
Benefits of Buying a Pre-Owned Vehicle
There are many benefits to owning a preowned vehicle. These are just a few:
1. Value for money
India is expensive and it can be difficult to buy a car, especially if you are buying your first car. The price tag is one of the biggest concerns when buying a car. Many new cars come with a high price tag. This can make it difficult to buy the right car for you.
A pre-owned vehicle, on the other hand, is generally more affordable. This means that it can be afforded by more people and offers better value. These are the two main factors that influence our car buying decisions.
2. Slow Rate of Decreciation
Apart from the high price, a common problem with new vehicles is their steep depreciation rate. The 30% depreciation occurs between the moment a vehicle leaves the showroom and the first year of use. This may not seem like a big concern at first, but if you look at it from a financial perspective, any decrease in price, especially to a large extent, will cause it to lose its value.
Pre-owned vehicles, on the other hand, are usually at least one year old so they have already beaten the steep depreciation curve. This means that it is likely to retain a substantial amount of its value if it is purchased now.
3. Lower Registration and Insurance Prices
You would already know that insurance costs for cars are dependent on their age if you’ve ever researched purchasing one. The insurance costs will go up if the vehicle is older. Pre-owned vehicles are usually much cheaper because they have already been well maintained.
In India, the total transaction cost is used to calculate the registration fee. Pre-owned vehicles are more affordable so registration costs will automatically go down.
4. Tested and proven to work
Pre-owned vehicles are able to withstand the test of time and have proven their worth. This is one of the greatest advantages. While a new shiny vehicle might look better, it has a shorter shelf life. This is a crucial factor when making a purchase decision.
Knowing that the items you buy today will last for many years is a good indicator of value.
5. Lower Loan Amount
Last but not the least, to buy a pre-owned car, you will need to borrow less money from the lender. This will allow you to save more over the long term.
How do I get a loan for a second-hand vehicle?
You now know the benefits of purchasing a used vehicle. Here’s how to get a second-hand car financing.
Online Process
Online applications are quick and easy. These are the steps to apply online for a used vehicle loan.
* Find second-hand vehicle loans from various financial institutions online.
* Choose the options that are most appropriate for your needs and budget.
Compare the offers and compare them to find the best second-hand car loan interest rates, loan amounts and loan terms. Check if the lender offers an option for loan extension.
* After you have selected a lender, go to their website and start the application process.
* Enter the details of your purchase, such as the car’s make and model, dealer, and the amount of financing you need.
You can continue this step by entering personal information, including your eKYC information. Next, enter your income information. If you are a salaried worker, you should have your Aadhaar Card or PAN card along with your most recent salary slip and three months of bank statements. In the case of self-employed workers, your ITR filings, six months bank statements, and your latest salary slip.
All documents must be uploaded and you can apply. Once you have been approved, the lender will send a letter offering a loan. You will need it to present to your dealer to complete your purchase.
A second-hand loan calculator can be used to calculate the EMI that you will have to pay to cover your loan amount and term. The loan calculator is useful in determining your monthly budget and how much you can afford to repay the loan amount.
b. Offline Process
These are the steps you need to take if your loan application is to be filled offline.
* Visit a used cars dealership near you.
* After you have selected the make and model, inquire about financing options.
* Many dealerships offer financing options from multiple lenders. Before you choose the loan that best suits your budget and needs, compare their interest rates, loan terms and loan amounts.
* Once you have chosen the lender, follow the instructions of the sales representative to complete the loan application. After your loan approval is granted, you can proceed with your purchase.
