It is always preferable to hone skills on used weapons and then go for new one – the saying is finding an apt application in car segment of India. Most of newbie’s prefer to opt for second hand vehicles before investing a hefty amount in new ones. However, acquiring financial help for second hand cars is nothing less than nightmare at present. There are two factors that play a crucial role in second hand car loans i.e. its age and model. Also, the bearer is required to pay a heavier cost for used car as compared to new car. In India, people availing second hand car financing options have to pay 3% more than the amount they have to pay for latest cars. And, lastly, there is a heavier chance that you may or may not get complete value of the car as loan.
As per norms, second hand car loan is granted only when age of the car and loan’s tenure do not exceed 7 years in combined manner. Therefore, if you are planning to get loan for 5 years, the age of your vehicle should not exceed 2 years under any condition. If you need a loan for four years, than the age should not exceed 3 years and the same is applicable for lesser years.
For second hand car financing in India, there are two types of financial bodies that can help you in this cause: banks and non-banking financial companies (NBFC’s). With respect to benefits, banks scores slightly higher over NBFCs for their lower interest rates. However, there are strong chances that things will get better on this front in coming years. Reason being, the market is swarming with new entries every single day which is compelling people to sell their used cars in just a period of 2-3 years. With supply increasing on both ends, there exists a healthy scenario that interest rates and terms & conditions will become more user–friendly in coming days.