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(Source: www.123finance.org)

Purchasing a car is a huge financial decision. Although a new car may be tempting prospect; purchasing one is an expensive affair. However, several used cars are available at affordable prices, which makes financial sense to choose such vehicles.

Here are four benefits of purchasing a used car.

  1. Lower depreciation

Over the years, the value of your car depreciates due to the wear and tear. The fact is that the value reduces as soon as you drive the car out of the dealership by as much as 5%. Insurance companies base the premium on the value of the car. The insurers consider the Insured Declared Value (IDV), which is the current selling price of the model and is lower than the original purchase cost. The lower premium due to depreciation helps you save on your insurance cost. The lower purchase price will further reduce the amount required for aused car loan, helping you save on interest in the long run.

  1. Lower registration fees and charges

In addition to the price of car and insurance premium, you need to pay the Road Transport Office (RTO) fees and charges. These applicable fees and charges vary from one state to another. Furthermore, these vary for petrol and diesel models. All these extra fees and charges significantly increase the price of your car. When you opt for a used car, the RTO fees and charges are lower based on the purchase price. As a result, you are able to save a significant amount of money.

  1. Affordable features

Most dealers entice you with expensive extras while purchasing a new car. Some of these include protective films or anti-rust coating. However, these extra features may be easily added from external vendors at a lower cost. Even if you include these additions, the resale value of your car does not increase due to these features. Opting for a used car may not provide you with all the extra features; however, you will not end up spending more on these additions. This may result in huge savings.

  1. Good condition

You may easily be able to find a used car in good condition at an affordable price. Several credible and certified dealers ensure you are able to purchase used cars that are in excellent condition at lower costs. Conducting extensive research will ensure you find such a car.

It is possible that you may not have the entire amount needed to buy a used car. You do not need to worry in such a situation because banks and non-banking financial companies (NBFCs) provide usedcar finance. Contrary to common perception, availing of such loans is simple and hassle-free.

 

Here are four benefits of opting for a used car loan.

  1. Higher loan amount

Lenders offer as much as 120% of the value asa pre-owned car loan. This will help you reduce the money you need to pay upfront while buying the vehicle.

  1. Affordable interest rates

Lenders offer competitiveused car loans’ interest rates, thereby making it easier for you to service the Equated Monthly Installment (EMI) on time.

  1. Longer loan duration

The loan is repayable in a pre-determined EMI schedule. The schedule is based on the pre-ownedcar loan amount, interest rate, and duration. Lenders provide you as many as 84 months to repay the loan, which ensures you do not face any difficulty in making timely payments.

  1. Quick and simple procedure

Financial institutions require basic documents like address and photo identity proof, income proof, and bank statements. The entire procedure from loan application to approval is completed in a short period. This will allow you to drive your car without any delay.

Buying a second-hand car is affordable, owing to loans for used cars offered by most banks and NBFCs. Several certified dealers offer a large number of used cars. Purchasing used vehicles from a reliable dealer ensures you receive the car in good condition. These dealers check the condition of the vehicles before putting them up for sale. You may also be able to procure used car finance through these dealers as they tie up with lenders.