More used cars are sold in India than new cars. In 2015-16, 3.3 million used cars were sold as compared to 2.8 million new ones. Of all the pre-owned cars that are financed, 58% of the share comes from the metropolitan cities. According to an online source, used car loan Bangalore finance in India is expected to grow from below $2 billion now, to over $10 billion of annual lending by 2021.
Most Popular Cars bought in Bangalore
Cars like the Maruti Swift Dzire and Volkswagen Vento top the list for the most popular car among the buyers in Bangalore.
Things to keep in mind before getting a loan
Buyers should keep in mind to choose a lower loan to value deal as most banks offer loans with shorter tenure and high interest rates. The documentation is more complicated than in case of a new car. The loan approval generally takes longer and if the car was previously owned in another state, certain issues may also arise.
Eligibility for applying for the loan
A minimum salary of Rs.15000 per month is required to be eligible for a loan in Bangalore. This information should be backed up by a proof of identity, income proof, address proof and a bank statement for previous 6 months.
How to get the best deal?
Loans for pre-owned cars are offered by all banks with a rate of interest ranging from 14.50% by HDFC Bank to 17.25% by SBI. Many online car selling portals also offer financing options for cars.
Why most buyers do not finance second hand cars?
The expensive loans are a major let down for buyers looking to finance pre owned cars. High interest rates and complicated and time consuming documentation also turns away potential loan takers.
Financing for pre-owned cars may be a small market today but with 50% of the buyers falling in the age bracket of 25-34 years it shows great potential for booming business.