Technology touches everyone and more so automobiles. Gone are the days of Fiats, Ambassadors and Standard Heralds. Today, there are tens of auto brands that attract the young and owning a car is an aspiration youngster covets. You can aspire to own a car at a price you can afford. If you are the ultra-rich, you can go for the marquee brands such as the Mercedes, Audi, Volvo and BMW. If you are affluent, you have a choice from world-renowned brands such as the Honda, Hyundai, Nissan and Ford. If you are budget minded, you can choose from the popular Indian and foreign brands such as the Mahindra, Tata Motors and Maruti Suzuki.
The proliferation of numerous auto brands has created a robust used car market that poses many attractions for the car buyer. As car makers introduce newer models, the older models enter the second-hand car market opening up a whole new segment. The effects of modern technology make the used cars extremely functional as they have a lot of miles under their hoods still remaining. If you are looking for a used car, you can enjoy the trouble-free performance for some years from the second-hand car. Side by side with the advent of technology, the second-hand car market has undergone a sea change in the way financial institutions look at financing the used cars. You can expect attractive terms for used car loans almost on par with new car loans.
Though the used car loan is easily available, we suggest that you should evaluate all the factors affecting your second-hand car purchase. To help you make an informed decision, we want you to take into account 7 important considerations that we have identified for you which are enumerated below before you take asecond-hand car loan.
1. Determine how much you can afford
As mentioned earlier, you can avail a second-hand car loan quite easily. This does not mean that you should be indiscriminate. The first thing for you to do is to determine the budget for the used car which is a function of your repayment capacity. Remember that NBFCs such as Tata Capital offer used car loans based on a variety of factors including your occupation, income streams, age, credit score and the type of used car you want to purchase. Thus, choose your budget carefully keeping in mind that the second-hand market is robust and you can get a good used car for almost any budget.
2. Choose the used car to fit in with your budget
The used car market is evolving every day with all stakeholders including automakers vying with one another to make available second-hand cars with quality promises. Actually, you are spoilt for choice. So, examine various offers. For instance, Tata Capital has an online store that can help you make this decision. Before you apply for the second-hand car loan, check out the online store.
3. Choose your lender
There are many financial institutions including NBFCs such as Tata Capital who offer used car loans for upto 5 years at a competitive interest rate of 12.5%. Evaluate the offers of each lender assiduously checking out the fine print and the various terms and conditions. This evaluation will help you to address all concerns so that you can choose the most appropriate lender.
4. Use the website features to perfect your choice
Almost all lenders offer a variety of features on their websites to help you make a considered decision on the contours of your used car loan. Use them to determine your eligibility, amount of loan, the rate of interest, tenure, EMI, documents required, application process and various terms and conditions.
5. Check out the fine print
Before you sign on the dotted line for the second-hand car loan, read all the terms and conditions and the charges that may apply. Remember, once you sign on the used car loan contract with your lender you are bound by the terms and conditions of the contract. If you don’t do so, you may have to pay penalties if you default on any of the conditions. These could include charges on delayed payments, interest on interest, charges on bounced cheques and in the worst case scenario confiscation of your car.
6. Keep required documents ready
To ensure a smooth used car loan process ensure you keep all the documents ready. These could include your income statements, ITRs, proofs of your identity, address and statutory ones such as PAN, registration documents of the used car you want to buy.
You can make your second-hand car loan process smooth and seamless if you take into account the above seven considerations and any others that your lender may demand.