Buying a car is not only a financial but also an emotional decision. People upgrading from two-wheeler or buying a car for the first time often want to be doubly sure about their driving skills. Hence, used cars become their first testing ground.
To buy used cars could be a task for many due to financial constraints, but not with a used car loan. If you have zeroed in on your favorite car from the pool of second hand cars and are looking for a used car loan in India, you first need to understand the common mistakes that loan seekers often make, and avoid them. Here are some of them:
Longer tenure, low EMIs
No! The mistake that most of the used car finance seekers make is opting for a second hand car loan with a longer tenure. You may see the short-term benefit of easy EMIs but in the long run, you end up paying much more above the set budget. The ideal way is to keep the loan tenure short but within your comfort zone. This helps to put a brake on the unnecessary interest outflow.
No down payment, shopping car at zero rupees upfront
Another trap most of the finance seekers fall into is driving away with a car with no down payment. The offer may appear irresistible, but it will only increase your EMIs later. It directly means that either your EMIs will get larger or your tenure. Either way, you end up paying more interest in due course of time.
Additional Read:- Quick Tips While Buying a Used Car
Not comparing the used car loan options
Used cars were rarely financed earlier, but the situation is different now. With the influx of several finance companies in the recent past, the customer is again the king. You have an array of options to choose from when going for a preowned car loan. Compare interest and terms and conditions of multiple loan providers before zeroing in on a particular company.
Going beyond the budget
Your set budget could be tinkered when you get into a conversation with the salesperson. Often, you get carried away by the ‘advice’ or ‘only for you’ scheme of the marketer and end up opting for a vehicle priced higher than your set budget. The increased amount may look slightly more than your limit, but it leads to unnecessary lengthening of the tenure or increased EMIs.
Financing the add-ons and accessories
Financiers often offer to include car accessories and other add-ons in the loan amount. No, they are not empathizing with you. It is their way to earn more interest from you. If you buy into such schemes, the amount will be added to your overall loan, and EMIs will increase accordingly.
Additional Read:- What do People Look for When Buying a Used Car Online?
Make sure you are extra careful when in the used car market looking for loan options. Buy second hand cars with the assurance of Tata Capital and its attractive interest schemes for used car buyers.