The growing demand for cars is increasing the car figures. With easy finance options it has become easier to own a car and great demand for cars has given a huge market for car loans. Buying a car is still one of the cherished dreams of most Indians. And affordable finance scheme has given the buyers to own their dream car. now a even the top car makers like Maruti Suzuki, Hyundai Motors and Tata Motors are concentrating on smaller cities too. Currently, Maruti has 600 dealerships and aims to expand it to thousands in the next four years.
Earlier people had to wait for months after booing for their new car but now with instant world, you can now actually go to the showroom, pay a small amount of cash towards cost of car and drive home and rest of the formalities will be borne by the bank which provides you a loan. It is not just the new cars but even used cars get easy finances now-a-days. But one should be extremely careful before applying for the loan and have to keep certain tips that will help you get a better deal with lower EMI's.
Banks services- it is always important to check if bank is giving you loans at on road prices that is if loan amount covers registration charges, insurance, road tax and other overhead cost apart from the basic cost of car (ex-showroom). If you take a car loan on ex-showroom price of car you will have to pay the other costs yourself. This amount could become a substantial burden on your purse.
Small loans- it is always better to take as little loan as possible as this will help you pay lesser EMI's and also low interest rates. Of course arranging for cash is a huge task which will require meticulous planning. But if done properly, this will serve to be a better deal than taking huge loans. Remember that banks charge interest on every rupee you borrow.
Well research -Banks offer loan with competitive interest rates, it is always better to do a thorough research on the interest rates offered by banks and the related services they offer. Every bank will offer different schemes with low interest rates or has cut interest rates by few basis points. Choose the one which suit your mode of re-payment and also check if the banks agree to waive off processing fees.
Interest is lower on popular models- Banks provide easy loans and lower interest rates on popular models. Even in the used car market, popular models like Hyundai Santro, Maruti Suzuki Alto, and WagonR command higher prices than the rest. Their resale value is assured to remain high for some more years and servicing is easy. Hence they attract cheaper interest rates. Generally the interest rates for older cars are very high.
Be alert- Always remain cautious with regard to the loan procedure. Make sure you go through the paper works well before signing any documents. Some people can take you for a ride by posing as agents of big lending institutions. Research helps you get a good deal. The more facts you know, the more better it is. Today with internet a lot of information is available online. It also requires lesser time than going physically to each institutions and checking their loan details. A little extra effort and knowledge can save you from a bigger trouble.
