Owning a car is a matter of pride to many in our nation. It is also a dream which many wish to fulfill before they retire. It was a bit difficult to own a car prior to 1999. Now, with the salaries growing year on year, there are many lenders in the market that offer attractive deals on pre owned cars which are also termed as a used car loan.
The used car loan segment has witnessed a huge rise as customers now understand the benefits they can get with a pre owned car. The cost for a used car is comparatively lower than a new car and hence it helps a person own a high end used car at a lower rate if it is second hand. However, before an individual applies for a used car loan, there are certain things they must be clear about;
Decide the car model – If an individual can decide on a car model first, it helps. This is because we tend to be less disciplined in purchasing when we realize there are many more options. Hence deciding a car model is important.
Decide a budget – Yes, the value of the used car can be very lower than the value of a new car. But that does not mean that you buy without any consideration. You need to analyze if you will be without any hassle while repaying off the loan installments until the tenure is over.
Decide the loan amount– Finally, you need to decide on a loan amount which is feasible as the lenders will arrange for 60-85%* of the value of the car. Hence you will have to arrange for the remaining amount. You need to accordingly arrange for the funds and be ready.
Decide the tenure – Your final step before you apply for a used car loan is to finalize on tenure. Lenders provide used car loans to the tune of 5-7 years* for repayment. Hence you need to purchase a used car which is not too old and that has less maintenance issues.
Overall, discipline is what matters before you consider applying for a used car loan. Research is very important when you finalize on a car model. Follow these steps and you will have no issue while applying for a used car loan.
To know more about how you can apply for a used car loan.