Traditionally, an individual or a family owning a four-wheeler is a matter of pride for many people in India.However, many people refrain from purchasing new cars of their choice because of many factors such as its cost, additional expenses such as registration charges and insurance, maintenance cost, and the fact that a car is a depreciating asset. Interestingly, these very reasons make investing in a second-hand car more lucrative. Today, finding many options for your dream car in the used-car market is no big task. If you think your wallet is not allowing you to go ahead with your decision, then do not worry; many financial institutions offerused-car loans at affordable interest rates. In addition, second-hand car finance comes with many benefits. Here are some top advantages of pre-owned automobile financing.
Benefits of Second-Hand Car Finance
High Loan Amount: Who would not love to own a stylish and expensive car? It can be a sporty seven-seater, luxurious sedan or high-performance off-road jeep. However, the price tag that comes along with them can be very discouraging. But there is a way to own otherwise expensive cars that come within your planned budget; used luxury cars that are far less expensive than new ones. A used-car loan can assist us in purchasing a luxurious second-hand car.Second-hand car finance offers a substantial borrowing sum. You can get a loan amount of up to Rs 50 lakh for your dream used car. Of course, it will depend on many factors, but it is possible to receive a larger sum. A bigger loan amount allows customers to choose from a wider range of options.
- High Loan-to-Value (LTV) Ratio: Suppose you are looking to buy a second-hand car for which the current market worth is Rs 7 lakh. You visit your lender hoping to get a loan of Rs 4-5 lakh. Your lender, on the other hand, agrees to give you only Rs 1 lakh. That could put a major dent in your plans. But you may keep your worries aside. In reality, this is not the case. The LTV ratio of used car loans is usually 60% to 80%. However, this may vary from lender to lender.
Flexible Loan Terms: If you are buying a luxurious used car, there are higher chances of you losing control of your finances.Let us assume you have just purchased a used car with a current market worth of Rs 60 lakh. In this situation, the lender may set a monthly EMI of roughly Rs 40-45 thousand, making it difficult for you to pay off your debts. However, second-hand car finance allows you to be more flexible with your loan amount, repayment term and EMIs. It also allows you to pay your EMI with the payment option of your choice. You can pay your EMI by using a post-dated cheque, online payment and auto-debit method. This level of adaptability letsyou enjoy a stress-free experience without disturbing your monthly budget.
- Minimum Documentation: One of the most irritating things in today’s digitised world is to wait for your turn by standing in a long queue. Can you even consider waiting for hours at the branch of a financial institution just to submit your loan application form? Well, that is how it works with the traditional financing method. Also, if you are in Minnesota when buying second-hand car finance you require a Minnesota DMV bill of sale.
But when you are applying for second-hand car finance online, you do not have to worry much about the loan process. The entire process is simple and hassle-free. It also requires minimal paperwork as compared to other loan forms. All you have to do is visit the website of the lender of your choice, check the eligibility criteria and required documents, submit an online application form along with the scanned documents and click on the submit button. You may also visit a branch of your preferred lender in person. Once the lender verifies your documents and is satisfied with your profile, it immediately disburses the loan amount into the account of a car dealer.
Irrespective of the brand, model or make of the vehicle, a second-hand caris always less expensive than a new car. As compared to a new car, buying a used car has a lot of benefits such as a lower depreciation rate, lower registration and insurance charges and more.The lower price of the used car not only saves our money but also attracts lower insurance costs as the insurance price depends upon the current market value of the car. Purchasing a pre-owned car with second-hand finance not only reduces the borrowing amount but also offers flexibility in terms of repayment conditions and loan tenure. Borrowers are often given 4-5 years to repay their loans.