factors to consider before buying a used car loan

Top 4 myths about pre-owned car loans

Amidst the devastating first wave of the Covid-19 pandemic, demand for personal mobility saw an increasing trend. As per the Society of Indian Automobile Manufacturers (SIAM), the used car sales are expected to grow at a 10% CAGR by 2024. With the latest BSVI emission control norms, new cars have become slightly more expensive. Secondly, slashing of GST on used cars from 28% to 12-18% is also an added benefit.

The used car market which was largely unorganized till very recently before the pandemic is now attracting interest from the various financial companies and auto dealers. A used car loan is giving the opportunity to own your dream car at reduced price and interest rates.

With so many organized players and lenders in the market, consumer perceptions are also changing about buying second-hand cars. However, there are several myths that continue to influence buyer sentiments.

In this blog, we are trying to debunk some of the most common used-car loan misconceptions:

Myth 1: Banks are the best lenders for the used-car loans
Availing loan to purchase a second-hand car from your bank seems to be a hassle-free and easy option. However, the fact is that NBFCs offer a very customized loan offering for pre-owned car. It provides a competitive interest rate for Pre-Owned Car Loan and has a better approval rate in comparison with banks. As per the statistics, more than 50% of the used-car market is dominated by NBFCs.

Myth 2: Finance companies only cater to urban areas:
It is always believed that finance companies/banks only give used-car loans in urban areas due to lack of reach. On contrary to that, NBFCs are expanding aggressively in rural areas and focusing heavily on tier-2, tier-3 markets. As per various reports, various NBFCs are bridging the gap and overtaking banks in rural areas. They are giving a seamless and hassle-free experience to used-car buyers in smaller cities.

Myth 3: Finance companies do not offer value-added services:
It is believed that only banks offer value-added services as compared to NBFCs while availing used-car loans.. On the contrary to popular belief, many NBFCs not only offer a seamless digital experience but also offer various value-added services such as insurance and service packages. With these value-added service offerings, NBFCs are seen as the most trusted and preferred choice among the used car buyers.

Myth 4: Only one person can apply for the used-car loan:
This is the most popular myth of all. A lot of people could not afford to get a pre-owned car loan for their dream car due to budget constraints. But you can always apply for a joint used-car loan with your spouse or a family member. You can make them co-applicant and split the burden of EMI with them. This will give you better deals and you can easily accomplish the dream of owning your favorite car.

Poonawalla Fincorp makes your loan application experience easy, and convenient. Thus, it helps you fulfill your used car loan requirements and helps you rejoice with your family without holding back.

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