Everything You Need To Know About Used Car Loans
A used car or pre-owned automobile is a vehicle being sold for the second, third, or fourth time.
Australia’s used-car market is booming. According to reports, the ratio between new and used cars stands at 1:2.2, which means that every 100 new vehicles, 220 pre-owned or used cars are brought onto the market. The market for used cars sells approximately 4 million units annually, which is more than 50% of new car sales.
These deals used to only be made by people who knew each other and through word-of-mouth. Companies that facilitate the sale or purchase of used vehicles.
The Growth Of The Used Car Market
Reducing ownership durations: With rising disposable income, ownership periods for cars are decreasing. The ownership times were approximately 7-8 years, but now it’s only 4-5 years.
- Accessibility To Used Cars: An automobile that has been owned for at least 2 years is typically available at around 60-70% less than the price of a new car. Higher quality technologies used in the manufacturing of cars ensure that the car doesn’t lose its value even after being used for 2-3 years. Also, you could get the best value for money by purchasing a used car.
- Constructive Changes: Buying a used car is now considered a good deal, with more players and increased transparency.
Having more than one car is becoming a common practice in many households. As the second vehicle, individuals prefer to own a used car.
We make it easy to get financing: You have many options for financing used cars.
All Information About Financing Used Cars
All types of used cars are eligible for financing. However, lenders will have reservations regarding imported or very older cars. These are approved case-by-case
Available Financing: There are many financing options for used vehicles. Individuals interested in buying used cars may be able to access financial services from non-banking financial institutions and banks.
Car Valuation: This part is the hardest when financing a car used. It’s easy to calculate the value of an old car, but it comes with a clear price tag for a brand-new vehicle.
One must consider the distance travelled, the type of user (personal or professional), the location of usage (cars coming from flood-prone locations may not get preferred), accidents or modifications that were made to the vehicle, clear title, etc.
Loan Of Value For Used Vehicles: Lenders are looking to pay a small amount as a down payment. Lenders generally allow for a loan percentage between 65 and 80 %. Tata Capital lends up to 95% of an estimated car value.
Tenures For Used Car Loan
It is not an easy task to determine the right loan term for your used car. The car may be used for years. The car’s value also plays a role in the length of used car loan terms. However, these factors are subjective so most banks and financial institutions limit loan tenures for used car loans.
Some lenders limit the length of used car tenures to a limited number of consecutive years from the date that the vehicle was registered. They also don’t lend for cars that have been driven for less than a certain amount of time. Used car finance in Brisbane generally has shorter tenures than a new-car loan.
To reduce interest costs, it’s a good idea for borrowers to pay off used car loans as soon as possible since they have higher interest rates than those on new loans.