The basics of getting a used car loan remain the same, but the entire documentation, verification and other loan related activities can be done on the spot. One peculiar characteristic of all such used car loan melas is that the price of cars quoted in any such events is non-negotiable. Banks have their own reasons for being rigid in this regard. "The effort we put in to verify the credentials, get the vehicle tested and valued help us reach a price which is pretty fair and leaves little room for negotiation." said a bank executive at one such loan mela.
Used car loan is different from a new car loan in more than one aspect. The used car loan covers around 70% to 80% of the determined value of the car and the rest has to be paid by the borrower as the down payment. Many banks provide loan at on-road prices for new cars, but there is no such thing as an on-road price for a used car. The buyer will also have to pay for the road tax, insurance, registration charges and any other fees for the used car. The tenure of a used car loan is around 3 years varying from bank to bank and depends of the year of car manufacture. For example: ICICI bank offers a used car loan for vehicles which are not older than 7 years so if your model is a 2003 one you can get a loan tenure of 3 years, the closer the value of car model to current year the larger will the used car loan tenure be. The interest rates offered for a used car loan are also higher having values like 14% to 18% depending on various parameters such as the car model, year of manufacture, car condition and loan tenure. The other thing that makes a used car loan costlier is the processing fee charged on such loans. Varying from bank to bank this processing fee can range from 1% to 3% of the total loan amount. It is usually waived in case of new car loans.
Used car loans though have terms, which look pretty harsh when compared to a new car loan, but the very fact that one can enjoy the ownership and luxury of a car at a huge discount, makes a used car very popular and a used car loan mela the first choice for all such buyers.
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