Although new car sales have been declining in the recent past, the used car market has been growing continuously. In fact, in 2018-19 sales of used cars exceeded that of new cars. Approximately four million used cars were sold during this period as compared to 3.6 million new cars. It isn’t just first time buyers who are driving this trend. Even those who wanted to replace their old cars are doing so with pre-owned cars.
Presently, only 17% of used cars get financed as compared to 75% of new cars. However, this trend is changing as loan providers become aware of the shift in buying trends. They are favourable offering terms for those looking for loans to finance their used cars. If you are looking for used car loan or finance, you should be aware of its many benefits. In this article, we have discussed the five major benefits of taking a used car loan.
Can Get a High-value Car
Financial institutions offer loans for used cars of an amount equivalent to 80% to 125% of the vehicle’s value. Therefore if you are aspiring to purchase either a pre-owned sedan or a used SUV, you can acquire the financing for it. You have a large universe of pre-owned cars to consider. Don’t invest a lumpsum amount, you can repay the loan in easy monthly instalments.
Interest Rates are Attractive
Lenders are willing to offer attractive interest rates for pre-owned cars as well. Although they may be slightly on the higher side as compared to the rates for new cars, they are certainly much more competitive than earlier. Lenders are competing hard to offer an affordable tantalizing used cars loan to meet the significant rise of consumer interest towards pre-owned cars.
Flexible Repayment Terms
One can secure flexible repayment terms on a used car loan from a lender. A customer can either pay the monthly EMI via cheque or through an auto-debit facility. Tenure can also be stretched up to 84 months.
Collateral is Not Required
You don’t need to offer any collateral to secure the used car loan. It is because the pre-owned vehicle you wish to purchase would be hypothecated to the bank.
Quick Approvals
Loans are processed rapidly. Thanks to easy documentation process and digital platforms, lenders are easily able to complete KYC formalities and also determine the creditworthiness of prospective customers. An individual seeking a loan for a used car can complete the loan application process after completing a few clicks and find the loan amount deposited in her account.
If you are planning to purchase a second-hand car, then there are several models you can explore, from buying a second hand Santro to a Maruti Suzuki. Additionally, you can get loans for the models of your choice, and in the soonest time possible you can drive away in your dream car. Research your lender well and understand the EMIs you have to pay before you invest.