The Loan Op­tion

Consumer Voice - - Bfsi -

Sev­eral banks of­fer loans for buy­ing used cars. Are these loans dif­fer­ent from loans for buy­ing a new car? Yes, there are some dif­fer­ences, as you will see in the points be­low: • Mar­gin com­po­nent (is higher for used cars) In­ter­est rate (is higher) Max­i­mum loan com­po­nent (is higher) Age of the car (can­not be more than five years old) Road-wor­thi­ness reg­is­tered garage In some banks, the re­pay­ment pe­riod runs con­cur­rently with age of the car Loan amount and ap­proval in the case of used cars are sub­ject to the age, model and con­di­tion of the car (un­like in the case of new car loans). In­ter­est rates tend to be three per cent to five per cent higher than new car loans. Also, the loan amount will gen­er­ally be 70 per cent to 90 per cent of the car value. So, these are fac­tors the prospec­tive loan bor­rower will have to keep in mind. • • • • • cer­tifi­cate from

Au­to­mo­bile Com­pa­nies Are in It for Good

a To­day, many au­to­mo­bile com­pa­nies have en­tered the used cars mar­ket and deal in buy­ing/sell­ing such cars. Some lead­ing names are Mahin­dra First Choice Wheels and Maruti True Value. They buy used cars, re­fur­bish them, and also con­duct qual­ity tests to de­ter­mine and fix the sell­ing cost. Fur­ther, they can fa­cil­i­tate the fi­nanc­ing as­pect as they have tie-ups with banks (just like tie-ups with banks for new cars of a par­tic­u­lar brand). Most re­tail­ers also add ben­e­fits like ser­vice pack­ages and war­ranties.

In­surance Cover on Life of Used-Car Owner un­der Bank Fi­nance

This is sel­dom in­cluded in the bank’s brochure on car fi­nance, but the im­por­tance of this el­e­ment can­not be ig­nored.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.