What are the things that you look for while applying for a used car loan?
It is a good decision if you are planning to buy a used car because second-hand cars are much in demand due to the price factor compared to brand new ones. There are various reasons why many owners go for a used car and they range from receipt of a driving licence, already having a car at home, the wide variety of used car models that are available like hatchbacks, SUVs, or sedans. You can go through the online car sales portals to look for the car of your choice, book appointments, make payments, and apply for a used car loan. The loans are available in the online mode. You have to upload KYC and other required documents on these platforms for a loan on an old car. However, you should check certain things when you are buying a used car. Read on to know more about them in detail.
There are digital platforms for used car buyers and sellers, that provide instant and paperless loans. You can also ask your dealer for loan offers on a car and he will offer help by checking your eligibility with multiple lending partners online. The things that you should go through include:
Purchase from dealers or others
Whether you plan to buy the car from a dealer, friend, or relative, choose carefully, so that it meets your needs. You are spending your hard-earned money on the car, so double-check to avoid any problems after the purchase process is over. Getting it from a dealer is better than other options as you can negotiate with them regarding the price to quite some extent.
The car and its papers
Before making the payment, check the car and its papers thoroughly. Look at the brakes, tyres, and filters. If you see dents, rust, or damage, they are signs of a poorly maintained car. You may ask a mechanic to take a good look at the car and negotiate the price if the car needs repairs. Check the long-term car insurance papers to see if there have been claims or accidents. The best way is to see if the policy has any no claim bonus (NCB). The engine number and the chassis number should match in the papers.
Transfer of car documents
It is important to get the registration certificate transferred to your name. Fill out and submit Form 29 and Form 30. Make sure to get the form signed by yourself and the previous owner. After submitting the form, the RTO will initiate the transfer and you can get the car receipt usually within 15 days. The owner’s name gets changed in the RC copy within 40 to 45 days. Get the third-party car insurance policy transferred to your name or you can buy a new policy altogether. Other crucial documents are the service book, a Valid Pollution Under Control certificate, and a No Objection Certificate if the previous owner bought it on loan.
Second-hand car loan interest rate
Compare the interest rates on used car loans before you finalise a particular lender because the interest rates vary between different lenders. Also, look out for seasonal and festive discounts on the interest rates as these would reduce the interest component and help you to save more during repayment. If you fulfil the eligibility criteria and document requirements, you can even negotiate with the lender for a reduction in the interest rates.
Age of the car
If you are buying a two-or three-year-old car, it may be in a good condition as it would not have depreciated much or there would not be a lot of wear and tear. Ask for the extended warranty if available as it will also keep the maintenance bills under control. Stay away from any car that is older than five years because it may need repairs within one or two years. Avoid brands that have stopped production in the market because it will be difficult to find spare parts. Also, it would be difficult for you to get loans on used cars that are more than five years old.
Possibility to modify the car
You may have plans about getting some modifications done after purchase, so choose the car accordingly. Look for cars that allow the specific changes that you want. Check whether the models allow modifications in the engine, colour, car body, etc. A lot of recent models would allow upgrades and more modifications compared to the older ones.
Renew or buy car insurance
Having car insurance is very important as you will get fined or jailed if you drive without the document. If the car already has an insurance policy, you may renew it on time or upgrade it or cancel it to buy a new policy. Ensure that the car is always covered. You may buy add-on policies for extra coverage at a slightly higher cost but purchase what is absolutely necessary like a depreciation waiver, etc.
Get a servicing done
Once you have completed the purchase, take some time to fix and clean it before you hit the road. It is better to do a deep cleaning of the interior and the exterior and send it for servicing. Even a used car, would look shiny and classy if you clean it well. Apart from these, you have to dispose off the old fluids, refill with fresh fluids, check the spark plugs, lights and brakes for any sign of wear and tear.
Check certain important things when you are looking for buying a used car. Go through the documents thoroughly, especially the car insurance papers, registration certificates, etc. Getting a used car loan is a good decision as you do not have to make the entire payment in one go and can avoid any stress related to the funds. You can apply for loans and make the payments online to avoid the hassles of paperwork. Also, if you maintain the car in good condition, you can drive it around for a good number of years.