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Find Out Why You Should Take a Used Car Loan
Owing to the rising cost of brand-new cars, the demand for used cars has increased significantly in India. A pre-owned car is basically a car that was owned by someone else before being sold. Used cars are a lot more affordable in comparison to buying new cars. As a result, many car buyers these days seek used car loans for buying second hand cars.
Why Buy a Used Car?
Apart from the fact that you can buy a used car at a lower cost, there are several other benefits on offer:
Availability of Used Car Loans
The availability of pre-owned cars has significantly increased in the market. Buyers can also buy a used car on EMIs if they can’t afford to pay the complete cost upfront. Not only that but there are many banks and non-banking financial corporations (NBFCs) that offer used car loans. Hence, buying a pre-owned car has never been easier. You can also buy a used car with zero down payment in cases where 100% of the amount is available for finance.
Lower Cost of Purchase
The on-road price for a new car is much higher than that of a second hand car. That’s because it includes several additional charges such as RTO registration fees and insurance costs. The second owner, however, does not have to pay the registration fees since the car has already been registered with the RTO. Not only that, the cost of insurance for a pre-owned car is much less in comparison to a new car.
The Bulk of Depreciation Has Already Happened
The value of the car starts to depreciate the moment it is driven out of the showroom. The bulk of depreciation is highest within the first three years of buying the car. This means when the owner sells the car, he or she has to take a huge loss on the value of the car. On the flip side, the second hand car buyer gains from this since the bulk of depreciation in the car value had already taken place.
The Emergence of Certified Used Car Dealerships
In the past, used car buyers were a bit skeptical due to the poor conditions of pre-owned cars being sold in the market. However, with the emergence of brands like Maruti Suzuki True Value and Mahindra First Choice, among others, used car buyers have become much more confident. The used cars listed on sale at such certified dealerships are thoroughly inspected and are available with standard warranties.
Benefits Of Taking A Second Hand Car Loan
- To start with, used vehicle loans make it easy to buy a second hand car of your choice since you can repay the amount in EMIs. A lot of used car buyers appreciate this convenience.
- In the case of a used car loan, the buyer does not have to give any collateral since the car itself will serve as the collateral.
- The best thing about taking a used car loan is that you can also improve your credit score by making regular payments towards your car loan. A good credit score serves as proof to your future lenders that you are capable of paying back the loan amount.
- You can choose the loan amount, tenure and EMI period for your used car loan. Not only that, but you can also choose the payment method of your choice.
If you are looking for a second hand car loan, then Muthoot Finance has some of the best options for you that come with quick loan processing, attractive interest rates, and minimal documentation. Visit your nearest Muthoot Finance branch to know more.