Important Things to Know When Buying a 2nd Hand Car in EMI

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Purchase of a second-hand car can be as financially straining as a new car if you are not well backed up with the necessary funding. Even though the costs of used cars are comparatively low, one needs to hold sufficient funds to make the purchase. The availability of used car loans, nevertheless, makes these purchases more convenient than ever for all aspirants. You can thus easily buy your choice of the vehicle through a suitable loan option and pay for the 2nd hand car in EMI until the tenure ends.

These loans defer the cost of used car purchase to a few following years, breaking down the entire loan value plus interest accrued into smaller amounts for easy repayment. You can choose a suitable pre-owned car loan depending on your financing needs. When doing so, it is important to keep a few factors in mind. Listed below are some of them.

Choice of Seller for Used Car Purchase

Your choice of seller can impact your used car purchase financing as it indicates trustworthiness of the seller, authenticity of the vehicle and ownership clarity. Lenders consider these aspects to be crucial when financing used car purchases.

Second-hand car sellers can be either of the following three that you can choose from.

  • Individual sellers: When you are purchasing a used car from an individual seller, it is critical to ensure trustworthiness regarding ownership and accurate paperwork. From relatives to friends and middlemen, anybody can act as an individual used car seller. You must make sure to get the vehicle’s condition checked by a professional before finalizing the purchase to ensure identification of any flaws or otherwise beforehand.
  • Dealers: Several car dealerships also arrange used car sale and purchases, with more and more of such dealers growing today due to the increasing demand of second-hand car. As they sell through an organized market, chances of you encountering an unfit vehicle are greatly reduced. They also arrange for financing of 2nd hand car in EMI through used car loans with tie-up from various lending institutions. Make sure to check the interest rate applicable and compare with available market rates if availing of financing through your car dealer.
  • Manufacturers: One of the safest and most secure ways to purchase a used car is through manufacturer showrooms, which have lately seen rapid growth. As sellers, these car companies can also provide added facilities like free servicing and a warranty on the vehicle. Buying high-end used cars is best done through car companies as sellers due to their high trustworthiness.

Paperwork needed

When purchasing your 2nd hand car in EMI, make sure that you have checked the paperwork requirements and arranged all necessary documents related to your vehicle beforehand. It can help ease the entire loan financing process, from application to disbursal of the advance. Important documents needed include the following.

  • PUC or Pollution Under Control Certificate, which shall be obtained from the previous owner. The absence of the document can lead to a penalty charge on your vehicle.
  • Registration Certificate or RC of the car which should be obtained during the purchase. Make sure to match numbers printed on car engine and chassis for originality and obtain issued certificate only and not a copy of it.
  • Insurance certificate of the vehicle to ensure coverage duration and timely renewal if needed.
  • The car’s service book, which should be checked for previous ownerships and any major damage sustained in such durations.
  • Receipt of road tax, which you can obtain after paying the tax post vehicle purchase. Check for previous mandatory payments as well and do not opt for a car with due road taxes from previous sessions.

Keeping these in mind, also arrange for used car loan documents that validate your eligibility for the advance, including your identity proofs, address proofs, and proofs of income based on your occupational status. When financing 2nd hand car in EMI, you must also make sure to assess your repayment capacity with installment calculation through financial tools like EMI calculator. Accordingly, choose a suitable loan amount and tenure for repayment. Check whether the car you are purchasing is less than 3 years old or not with not more than 2 previous owners as these are often the ground rules of lending that used car loan providers lay down.

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