Used car loans make it easier to purchase second-hand vehicles which are, of course, already a lot more affordable than brand new versions of the same model.
That is the reason why used car loans have taken off in a big way in India, catering to an ever-burgeoning appetite for cars among Indian consumers. Where new car sales are cooling down significantly, used car sales are ensuring that overall auto sales volumes remain quite high.
In this article, we share the top 5 reasons for which it clearly makes sense to opt for used car loans.
Lower Price of Used Vehicles
One of the foremost reasons for which used car loans make sense is the lower price of used cars themselves. In the luxury segment especially, the difference between a new car and a used car of the exact same model can be absolutely staggering!
In the case of smaller cars such as hatchbacks which are quite popular in the Indian car market, savings are substantial since these cars do not cost a fortune even when brand new; a few years down the line, these same cars can be picked up at quite a good bargain!
Overall, there is no doubt that given the already lower price of used vehicles, used car loans for purchasing these vehicles make so much sense!
Lower Loan Amounts Required
As a direct consequence of the previous point, viz. the fact that used car prices are themselves quite low, used car finance which is needed to purchase these vehicles also tends to be quite a lot less.
If we take the same hatchback instance we cited above, the price would be low enough to warrant a small used car loan; in many instances, people manage to buy such cars with the help of their savings alone.
The point is that the overall financial burden in the case of used auto loans tends to be less, thus saving car buyers from the pressure that comes with new car EMI payments.
Significantly Less Depreciation of Used Cars
Depreciation in the case of new cars always tends to be quite high. With luxury cars, there is a major drop in value, no sooner do you collect your brand spanking vehicle from the showroom.
With used cars though, the drop in value is not that much. In fact, even after driving your used car for a reasonable period of time, you will find the drop in value to be marginal.
This leeway allows you to consider vehicles that you may have hitherto not considered, such as a model which is in a higher category than what you would have planned for, in case of a new car.
Easy Availability of Used Car Loans
One of the biggest advantages by far with used car finance is that it is relatively easy to obtain. With new car sales dwindling in India, used cars are the biggest ray of hope for banks and finance companies.
Accordingly, they have pulled out all stops to ensure that customers can avail used car loans as easily and quickly as possible.
Wait, before you think that they do not perform due diligence before doling out used car loans, we would recommend you hold your horses right there! Necessary checks and balances will definitely be done but things are fast and hassle-free. As long as you qualify and have a fairly healthy credit history, there is simply no way that you will not be granted a used car loan.
Favourable Terms with Immense Choices
Finally, with used car loans, especially in the current scenario, you can easily expect rather favourable terms on your used car loan. For instance, with a solid credit history, you can easily expect a really attractive rate of interest on the auto loan you avail.
Moreover, there is so much choice available that you can easily shop around comfortably until you sure of bagging the best deal possible. Be it HDFC Bank, SBI, or ICICI Bank, to name just a handful of mainstream banks in India, they all offer outstanding deals on used car finance.
As the above points clearly indicate, it does indeed make sense to opt for used car loans in India.