Few things to keep in mind before taking a used car loan

Many purchase second-hand cars while seeking out a premium model while not having to stretch one’s budget. For instance, sedans from segments c and d lose as tons as 40 percent of their price within the first year alone. A premium model which retails new for nearly rs 15 lakh may be had for almost rs 9.5 lakh, if sold second-hand in the first few years of the authentic buy. So, in case you are trying to accumulate a higher section vehicle, a well-maintained pre-owned car could be a great opportunity.

Generally, used vehicle loans are provided at attractive charges of interest, and include a repayment tenure of as much as seven years. While sure lenders provide loans of as much as one hundred in step with cent of the automobile’s value, maximum banks and non-banking financial companies (nbfcs) provide used car loans.

That said,  here are some things to maintain in mind when going for a used- car loan :

High rate of interest:

The charge of interest on used car loans are normally better compared to those on new motors, because of the higher associated risk. Even as the new vehicles include the manufacturer’s guarantee at the vehicle and components, that is not the case with a used vehicle. there may be no readability on the state of the vehicle, the wide variety of injuries that would have passed off, the situation of the parts and the engine, and so on. So, it is considered as a disadvantage. Except, the financer additionally views the profile as barely riskier, says abhinav kaul, vice president, strategic partnerships, bankbazaar.Com, a financial service site.

Type and age of car:

factors which include the type and age of the automobile be counted while going for a used car loan. For instance, the common lifespan of a vehicle is usually considered to be 15 years.

As such, most banks may not fund a vehicle older than 8-10 years.

“In this case, the tenure of the loan will not exceed the same time span. So, if you are buying a five-year-old car, your loan tenure will not be more than three-five years. Also, most banks will not finance more than three resales,” says Kaul.

Registration certificates of car:

Make certain that the registration certificates is obvious of any hypothecation to any financial institution or lending organization. It means the car turned into purchased on loan, and perhaps the mortgage continues to be in provider. The seller has to get the hypothecation removed from the registration certificate and get a new registration certificates in his/her call from the regional transport office (rto), earlier than putting up the  car for sale.

Check all papers thoroughly:

test all papers, namely insurance and registration certificate are in place. Also take a look at the engine range and the chassis variety at the vehicle and healthy it with the range noted inside the registration certificates. Additionally test if the automobile has had any accident, and any service issue.