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New Car Loan vs Old Car Loan: Here’s the Difference
Posted on Monday, June 7th, 2021 | By IndusInd Bank
If you’rethinking of purchasing a vehicle, you may have considered choosing between anew car and a used car. While a new car is going to be higher on performance,an old car may be more value for money. So, there is a good chance that buyinga second-hand car can be an equally fruitful deal as buying a new car. So, itcan all narrow down to the terms of the car loan you are applying for.
Most Indian banks provide both a new car loan and used car loan. These two have their pros and cons. So, it is advised to weigh your options well before you apply for car loan. The endless number of financial products and providers in the market can end up clouding your judgement. To help you make an informed decision, we have listed certain key pointers that constitute the major difference between a new car loan and an old one.
Amount of Loan
As a generaltrend, the loan amount for a new car loan is higher than that of a used carloan. The same is attributable to the low loan-to-value of a pre-owned car.
Interest Rates
Again, thelow loan-to-value factor comes into play. So, as the bank assumes higherassociated risks with a second-hand vehicle, they charge higher interest rates.
Repayment Terms and EMI
The lesser interest rate of a new car loan translates into lower monthly instalments. On the other hand, as you require fewer funds for an old car, you need to pay lower EMIs. Moreover, the insurance premium is not attached with a pre-owned vehicle, and this implies a lower annual cash outflow in case of an old car. We provide flexible and easy repayment terms to support the financial situation of our customers.
Tenure of the Loan
Most banksoffer different loan tenures for new and old car loans. Therefore, it isessential to compare multiple alternatives before settling down on one. Weunderstand the diverse needs of our customers.
Documentation and Disbursal Process
The process of documentation for a new car can be lengthier than an old car. It may be due to the extra documents such as the insurance of the new car. We provide hassle-free documentation and ensure a super quick loan approval. Furthermore, IndusInd Bank offers a refinancing option with an old car loan for the ease of repayment.
Which One Is Better For You?
You must opt for the one that provides the most value to you and aligns with your financial product requirements. It all narrows down to your needs and the purpose of the vehicle. If you plan to buy a new car or a pre-owned one, you can enjoy exclusive benefits with IndusInd Bank.
Our car loans, both new and pre-owned car loans, have flexible terms and offer quick disbursal of the loan amount to let you enjoy the ownership of your vehicle in no time. Additionally, our interest rates are highly competitive. Contact us and get in touch with IndusInd Bank to get more clarity on the best loan type for you.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
