The second-hand car market has grown significantly in the recent years. Nowadays, due to the presence of renowned brands in the second-hand car industry, people are more open towards purchasing a used car. Moreover, reliable reselling car agencies and improved car quality in India have also contributed to the increasing popularity of second cars in the Indian market.
Some of the benefits of buying a used car are as follows:
It is cost-efficient. A second-hand car will require less financing and thus, if you avail a loan, you’ll have smaller EMIs to repay.
Cheaper insurance and less depreciation
The insurance cost of a second-hand car is lesser and the prospect of depreciation is also less as compared to new cars.
If the pre-owned car that you are planning to purchase is only a year or two old, you can avail the advantage of an extended warranty. There are two types of extended warranties: those that cover almost all components, and others that warrant only the engine and transmission.
A lot of lending institutions provide second-hand car loans at reason
able interest rates. Financing the purchase of a pre-owned car isn’t a cumbersome task.
You can finance the purchase of a used car by availing a second-hand car loan. With prominent banks and other financial institutions, a second-hand car loan can be availed easily by undertaking a few registration formalities. Instead of liquidating your savings to purchase a vehicle, availing a second-hand car loan is a better financing option.
Some of the major benefits of car loans for second-hand cars are mentioned below:
Low interest rate
Since second-hand car loans are secured loans, the interest rates levied on them are lower than regular personal loans.
Reliable Security Check conducted by the lender
The lender undertakes a detailed background check for the registration documents of the vehicle. This ensures that there is a genuine transfer of ownership of the vehicle in your name. The lending institution also ensures that the registration documents are completely authentic and there is no fraudulent transaction while transferring the ownership of the vehicle.
Flexible Repayment Tenure
Most financial institutions provide the option of flexible repayment tenure in case of second-hand car loans. Therefore, you can structure your EMIs as per your convenience. You can also calculate your EMI amount with the help of an online personal loan EMI calculator. This will allow you to plan your monthly budget accordingly.
Higher Loan-To-Value (LTV) Ratio
The LTV ratio is higher in case of used car loans. Several banks and financial institutions may also provide you financial assistance up to 100% of your second-hand car. The loan amount will depend upon your current monthly income and your expected repayment capacity in the future.
Now that you are well-aware of the used car benefits as well as the advantages of availing a second-hand car loan and the reasons for personal loans, you can consider purchasing a pre-owned car for yourself. Lastly, do not forget to read the terms and conditions of the loan agreement carefully. This will help you avoid any inconvenience in the later stage.