Used Luxury Car Loan: Mercedes, BMW, Audi Depreciation & Loan Terms

Luxury cars like Mercedes, BMW, and Audi depreciate sharply in the first several years, creating an opportunity for budget-conscious buyers to purchase their dream car. This blog discusses the depreciation trends and the key loan terms to help you finance your dream ride confidently.

Understanding Luxury Car Depreciation in India

Luxury vehicles depreciate significantly faster than economy cars in India’s market. A new luxury car typically loses approximately 15-25% of its value in the first year alone, and another 30-35% in the second year. The exact depreciation rate depends on the model and brand of the luxury car.

This steep depreciation curve exists because luxury cars carry higher maintenance costs, specialised spare parts, and stricter servicing requirements. Additionally, the pool of potential buyers shrinks compared to mass-market vehicles, affecting resale demand.

Depreciation Trends: Mercedes, BMW, and Audi Compared

Each luxury brand depreciates differently in India, depending on market demand, brand loyalty, and maintenance costs.

Also Read: All You Want to Know About Pre-Owned Car Loans

Loan Terms for Used Luxury Car Loan: Mercedes, BMW, Audi

The following are some general key loan terms and other requirements you can broadly expect for a Used Luxury Car Loan:

Key Terms

• Interest Rates: 10-26% p.a. based on credit score, car age, and income.
• Loan Tenure: 1-5 years (longer tenure on used luxury cars carries higher interest rates due to increased depreciation risk).
• LTV: 70-100% of car value post-depreciation; 10-30% down payment typical.
• Processing fee: 1-2% of the loan amount; additional insurance and stamp duty fees apply according to state rules.

Also Read: Factors to Consider Before Applying for a Used Car Loan

Typical Eligibility Criteria

• Age: 21-65 years (for salaried individuals), 24-65 years (for self-employed individuals), and 24 years (for a proprietor, partner or director of a firm/company)
• Typical Work Experience Expectations:
  • For salaried individuals: Minimum 3 months at current job + total work experience of 12 months for amounts up to ₹10 lakh; double these figures to be eligible for amounts between ₹10 lakh and ₹75 lakh.
  • For self-employed individuals: Minimum business vintage of 24 months for loan amounts up to ₹10 lakh, and 36 months for amounts between ₹10 lakh and ₹75 lakh.
  • For firms/companies: Minimum business vintage of 24 months in the same industry.
• Credit score: Ideal score is 650-700+.
• Citizenship: An Indian resident with repayment capacity.

Documents Required

• KYC: Aadhaar, PAN, Voter ID, Passport, Driving Licence.
• Income proof: Salary slips (last 2-3 months), Form 16, or ITRs (last 2 years).
• Bank statements: Last 3-6 months.
• Vehicle papers: RC, insurance copy for the car

Also Read: Buying a Used Car: Everything You Need to Know

To Conclude

Luxury cars depreciate quickly, but that also means better pricing for pre-owned buyers. By checking your eligibility, gathering the right documents, and choosing a suitable tenure, you can own a premium vehicle with manageable EMIs. Opt for Poonawalla Fincorp’s Used Luxury Car Loan to explore flexible loan options, competitive interest rates, and an easy approval process.

Table of Content

• Understanding Luxury Car Depreciation in India

• Depreciation Trends: Mercedes, BMW, and Audi Compared

• To Conclude

• FAQ

FAQs

How does vehicle depreciation affect my loan amount?

Lenders use your car’s depreciated value to determine the maximum loan amount (typically 70-85% of assessed value). Older, more depreciated cars mean lower loan amounts but also lower EMIs and down payments.

What is the typical interest rate for a used luxury car loan?

The interest rate varies widely from one lender to another, typically ranging from 8.5%–26% per year, depending on factors like credit score, car age, and the lender you choose.

Do I need to provide a co-applicant for a used luxury car loan?

A co-applicant is usually not required, but if you have a low credit score or insufficient income to satisfy the eligibility requirements, then a co-applicant may be required.