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Tips to Purchase a Second-Hand Car Using a Car Loan

Buying your dream car can be a real struggle. Since car prices are rising every day, it becomes extremely difficult for the average consumer to buy the car of their dreams, or even an ordinary new car. Thankfully, there’s a thriving used car market in India, where individuals can look around for second-hand cars that are in fairly good shape. These cars tend to be more affordable, and can still last you for a very long time.

If you’re looking at the price tag of a second-hand car and still think it’s out of reach, don’t worry. Most car dealers have tie-ups with banks and can help you get financing for your car through a used car loan. Most buyers opt to take out a loan, and it puts less financial stress on them and their families, and the monthly Equated Monthly Instalments (EMIs) that are required can be managed quite easily. In fact, if you’re sitting on the fence about whether or not you should ask for financing to purchase a used car, here are a few reasons why you definitely should:

Affordable EMIs: If you’re purchasing a new car, your EMIs are likely to be astronomical. On the other hand, since the cost of a used car is much lower, your EMIs will be incredibly affordable. If you can afford a higher EMI, you have the option to repay the loan in a shorter time period. Whichever option you choose, the overall financial strain on you and your family will be minimal.

Hassle-Free Sanctioning: The demand for second-hand cars and financing for the same is on the rise. Banks have understood this and have made the process to apply for financing quite simple. Minimal documentation is required, and plans can be customised to suit your personal needs and preferences.

Low Cost: The cost of the car is quite low, making it easier for you to put down a higher percentage of the down payment. This, in turn, will reduce your EMIs and the tenure of your loan.

Depreciation: It may seem counter-intuitive, but second-hand cars depreciate at a slower rate than new cars. If you maintain your car well, you could end up selling the car a few years later at almost the same price for which you bought it.

Before you apply for a loan for your used car, it’s important to ensure that you’re purchasing the best possible car for the best possible price. To do this, you should:

  1. Take the car for a test drive to ensure that it’s in working condition.
  2. Get an external surveyor to give you an approximate value of the car to ensure you aren’t being overcharged.
  3. Inspect the car inside and out. It’s a good idea to check the tyres and factor in the cost of replacement if required.
  4. Check all the car documents to ensure any and all previous loans have been paid off.
  5. Finally, check the used car loan interest rate offered by various banks and choose the one that fits your pocket.

You’re on your way to purchasing that car you’ve always dreamed of. Congratulations!

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