The auto industry has seen a surge in the domestic market over the past few years! And with the COVID-19 pandemic hitting us with the importance of social distancing, more people prefer to travel through their personal vehicles. Opting for a pre-owned car is also becoming an increased choice for Indians since it makes more sense for first-time car buyers or someone looking for a second transportation mode for their family.
With this increased car demand, the financial market has also levelled up! No need to postpone your dreams because today, you can buy a vehicle with the help of a used car loan.
Reasons to Buy a Second-Hand Car
You might think a used car must be dirty, broken and worn out, but that’s not the case. Today, you can get plenty of amazing deals on used cars that almost look like they are new! Here are six reasons why you should totally consider going for a second-hand car:
- Save Your Money
Purchasing a used car means you are already in for a lower price since a car loses its 8% to 10% of purchase value the moment it is used. And when the original value goes down, you can purchase it for a lot lesser. This way, you can even go for an upper-segment car and get a better model for a lesser price than you originally planned!
- Get Certified Pre-owned Cars
How dealers deal with second-hand cars has now changed with the automotive industry’s evolution in India. Today, you can have car certification checked within your fingertips! You don’t have to trust the words of cunning salespeople or dealers trying to persuade you into buying a defective model. Search for certified cars with proper documents on trusted third-party car selling apps. They have professional car engineers who check the used car and make your purchasing process much easier.
- Pay Minimal GST
Generally, the sales tax is one of the most overlooked aspects when buying a new car. Sales tax, commonly known as GST (Goods and Service Tax) in India, applies to all types of goods and services, even vehicles. The GST on cars ranges from 5%, 12%, 18% and 28%. If you want to buy a vehicle for personal and commercial use, the most relevant rate is 28%. However, the rates are way lower for used vehicles. Pre-owned smaller vehicles like petrol cars with 1200cc and diesel cars with 1500cc engine capacity are applicable for 12% GST. That’s almost half the rate of a brand-new vehicle.
- Slower Depreciation Rate
Car depreciation is the decrease in your car’s value. It identifies the current rate of your vehicle. The depreciation rate of a new car is high in the first three years of its life. But, when you buy a used car, you are already purchasing one that has undergone depreciation. Hence, you benefit with a slower depreciation rate.
- Dig Detailed Car History
With digitalisation at its peak, getting a car’s purchase history and detailed service record is no longer a hassle for second-hand buyers! Several companies bring out information about a registered vehicle in India, including service logs, insurance history, registration details, etc. So, go ahead with your pre-owned car purchase decision with several services aiding you in making informed decisions!
- Ditch the Additional Insurance Charges
Since the used car has already depreciated, the insurance charges are always lesser than a new car. So, even though the car looks almost like a new car with no dents, scratches or smooth functioning, the insurance premiums are lesser when compared to a brand-new vehicle.
Used Car Loans for Your Convenience
It is much easier to buy a used vehicle today than it was years ago. With so much evolution in the auto industry, the authentication of a vehicle is easier, and your chances of getting conned are turning lesser! Even funding your big purchase investments like a second-hand car has become hassle-free. With MoneyTap’s used car loan, you get a line of credit approved up to a certain amount to get you closer to your dream of purchasing a car! The entire loan approval process is instant, secured and transparent! The repayment window is flexible for EMIs ranging from 2 to 36 months, and the interest rate is only charged on the funds you use! So, quit worries and get instant second-hand vehicle loans with minimal documentation requirements.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at [email protected].