Used Car Loan Vs New Car Loan In 2023

Mar 12th 2024
Loan
Used Car Loan Vs New Car Loan In 2023

Used Car Loan vs. New Car Loan, In recent times, car has become a necessity among households. Whether it is to commute to the office, visit a nearby grocery store or mall, go on a family vacation, or taking your wife or girlfriend on a date, a car makes things easy for you. With so many car manufacturers currently operating in India, it is not at all difficult to choose the best car for your needs. Be it SUV, hatchback, sedan, MPV, or any other vehicle, you can easily get the one today. However, one big confusion people face is whether they should buy a new vehicle or a used one. And, in most cases, people apply for a car loan to fund this purpose. So, in this post, you will get to know everything about new car loan and used car loan and which one is better.

Difference Between A New Car Loan and Used Car Loan

Although they may appear to be comparable at first glance, new and used automobile loans differ in a number of ways that might have an impact on the customer's choice to purchase.

Here is your reference to interest rates and other features for both new and used automobile loans.

Nature Of Loan

The first choice a buyer must make is whether to purchase a new automobile or a used car. Since a used automobile is less expensive than a new car, buyers who pick one can select a better model of the vehicle.

If they want to purchase a new automobile, they choose a new car loan. Buyers who want to choose a used automobile take out used car loans or pre-owned car loans.

Loan Amount

Those choosing a new automobile loan are eligible for a loan of up to 80–85% of the car's ex-showroom price. For specific automobile models and under various loan programmes, a used car loan amount from a respectable lender like Investkraft can reach 100% of the car's purchase price.

The price of a new model of the identical car will be more than that of a used one. Therefore, a buyer requires a larger loan amount for a new automobile than for a used car of the same brand and characteristics. A smaller loan balance reduces the buyer's burden.

Loan Interest Rate

A new automobile loan may have an interest rate as high as 15.5%. However, reputable lenders like Investkraft provide used auto loans with interest rates as low as 7.50% annually.

Customers may get the appropriate interest rate on a car of their choosing by using a free used car loan calculator on the websites of top lending platforms. To find an interest rate that fits his budget, he might experiment with different loan amounts and terms.

Tenure

A new car loan may have a term of one to eight years, but a used car loan may have a term of one to five years. Although fewer monthly payments are associated with a longer tenure, the overall cost of the loan is greater.

Repayment Schedule

The buyer can choose the repayment schedule with the aid of a personalised auto loan. To meet the demands of consumers, lenders like Investkraft provide a variety of programmes with adjustable interest rates and payback terms. Additionally, these lenders provide hassle-free loans with speedy loan approvals to borrowers with no credit history.

Insurance

Since a used automobile is less expensive than a new one, it has lower insurance and renewal premium costs.

A used automobile with a solid maintenance history is an option for those who do not want to spend a lot of money. On used automobile loans, lenders typically offer transfer help to the buyer. To determine the EMI for a used vehicle loan and to find a luxury automobile at a price you can afford, utilise an online used car loan calculator.

Down Payment

Since lenders view used automobiles as being riskier than new ones, the down payment on a used car is typically more than on a new one. However, for some types of second-hand automobiles, lenders like Investkraft give up to 90% of the LTV. To assure quality, buyers can purchase a well-kept used automobile from a reputable seller, such as a well-known friend or family or a well-known used car dealer. It will enable him to increase the LTV for the vehicle.

Documentation

A new automobile may involve more paperwork and take longer to pay out than an older vehicle. New automobile insurance claims are among the processes that take the longest. If the required paperwork is complete, Investkraft can release a used automobile loan in no time. For used automobile loans, the paperwork procedure is short and straightforward.

FAQs

How Much Funding Am I Eligible For?

Up to 90% of the value of the automobile may be borrowed. The smallest loan is for Rs. 75,000.

What Possibilities Are There For Tenure?

Your decision is yours. You have a range of repayment options, all tailored to your needs, ranging from 12 to 84 months.

Is A Guarantor Required?

Typically, no. However, if your income or age does not fit our credit requirements, you could need a guarantor to provide as security for your loan.

Is It Possible For Me To Prepay The Complete Loan Amount?

Yes. After receiving the loan for six months, it may be prepaid at any moment.

The Conclusion

When it comes to choosing between a new car loan and a used car loan, it is recommended to select the one that meets your needs for financial products and offers you the best value. Everything comes down to your requirements and the function of the vehicle. With Investkraft, you may take advantage of special incentives whether you want to purchase a new or used car.

 

 

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