What to keep in mind when you're looking for a used car loan

 

Luxury cars are a thing of the past. Modern life is easier, safer, and more comfortable with a car. In addition, the COVID-19 pandemic has made having a car essential for several reasons. By using this method, people can travel safely without using public transportation, while still maintaining social distancing norms.

It is important to note that not everyone in India can afford a new car. Many buyers are unable to purchase such expensive vehicles despite the pandemic causing a prevailing economic recession. Consequently, the pre-owned car market in India is growing. You can easily purchase a second hand car with the help of a car loan in Varanasi.

In simple terms, what is a used car?

Used and previously owned automobiles transfer to a new owner for resale. New cars of the same make and model are much more expensive than used cars. Cars depreciate through gradual wear and tear over time because they're electrical and mechanical.

Every year, the value of a new car drops by about 10%. That means you can buy a five-year-old pre-used car worth Rs. 8 lakhs for about half that price, or Rs. 4 lakhs.

Read More - When looking for second hand car finance, what should you look for?

Market growth of used cars in India

India's personal mobility market exploded after the COVID-19 pandemic. In addition, small hatchbacks were in the highest demand due to their affordability. More than 85% of two-wheeler sales grew in the first quarter of 2021-22, while car sales grew 320%.

New cars, however, are not suitable for everyone. In addition to affordability, personal preferences can also play a role in this. Consequently, the pre-owned car market has grown rapidly in India.

A study found that India's used car market grew faster than the new one in 2020. In December 2020, used car sales in India increased nearly 50% YoY. As a result of the first lockdown, used car sales rose almost 115% in India.

It is forecast that pre-owned car sales in India will reach 70 lakhs by 2025-26.

What are the factors contributing to this boom? Let's talk about:

1. The demand for mobility is huge

Thanks to COVID-19, people now commute differently. Due to concern about Coronavirus and distancing norms, people are now avoiding public transportation, including buses, autos, trains, and taxis. Thus, personal mobility is in high demand.

The demand for cars has increased in India. Pre-owned cars are an affordable way to own a car for those who cannot afford a new car. Others buy second-hand cars to keep more than one car for the family.

2. New car buyers

This point is interrelated to the first point. Personal mobility demands led several people to purchase their first vehicles. This group of first-time car buyers boosted India's second-hand car market by nearly 50%.

OLX-CRISIL reports that first-time car buyers increased by about 8-10% in 2020-21. Novice drivers also purchase second-hand cars to improve their driving skills.

3. Organized players enter the market

Five years ago, there were only unorganized players in the pre-owned car market. It's all changed now, though. Several organized players have entered the Indian used car market in recent times. Used cars from these dealers are mostly in good condition.

Due to the entry of such dealers into the market, used car sales in India have grown rapidly. The fear that a second-hand car might have problems after a few months is no longer a reason to avoid buying one.

In addition, many second-hand car dealers offer a 12-month warranty against mechanical issues.

4. Consumer perception changes

Good-condition pre-owned cars offer a value-for-money proposition when you combine affordability with affordability. Second-hand cars are now attracting first-time buyers and recurring buyers.

As a result of the pandemic, the pre-owned car market in India has grown by 11%. Over the next few years, this growth rate should reach 15%.

6. Loans for used cars are available

A major reason for the growth of Indian pre-owned cars is this factor. Indian banks and non-banking financial corporation’s (NBFCs) now offer used car loans to help people own a car of their own. In some cases, lenders even offer 100% financing on pre-owned vehicles.

India's second-hand car loans have made owning a private car easier and more affordable. Even people who cannot afford the entire cost of a pre-owned car can take advantage of these loans.

Pre-used car loan considerations

Due to second hand car loan, people can now fulfill their dream of owning a car easier. Used car finance has grown rapidly since the pandemic. Many banks and NBFCs in India now offer loans for buying a "new" used car.

If you are considering a used car loan, here are a few things to keep in mind. Among them are:

1. Get a credit report

2. Identify the car's value

3. Calculate the right loan amount

4. Make a down payment 

5. Consider a shorter term

6. Check the rate of interest

7. Compare different lenders

8. Organize all documents

For getting more information about  second hand car loan interest rate, 

lowest used car loan rates in Varanasi, and car loan requirements in Varanasi at our website www.carkharidobecho24@gmail.com

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