Thinking of buying a used car? Check out the lowest interest rates | Photo credit: Twitter
The demand for personal mobility has increased as more people try to avoid crowded public transport in the wake of the pandemic. Buying a car is no longer a luxury with easy access to loans, more ownership models and more and more price comparison sites making it easier to find and own a vehicle.
Buying a new car is often a costly affair and many say it makes more sense to go with a used vehicle since a four-person vehicle is a depreciable asset that declines in value over time. A used vehicle in good condition can be ideal for meeting the mobility needs of an individual or a family in a cost effective manner. You will also save on other costs like license fees, road tax, RTO fees, etc. which are already paid by the first owner.
However, it should be noted that the interest rates for used cars are much higher than new car loans. This difference can sometimes go up to 5% in the case of some lenders.
Axis Bank offers a new car loan for an amount between 9.05% and 11.30%, while the interest rates for the used car loan range from 14.80% to 16.80%; HDFC offers new car loans from 9.50% to 10.25% and old car loans from 13.75% to 16%; ICICI’s interest rate for new car loans is 9.30% -12.85% and 14.25% for old car loans and United Bank of India offers the lowest rates.
However, public sector banks offer lower rates than private banks. Among public banks, Canara Bank, Bank of India and Union Bank offer the lowest rates. Canara Bank’s interest rate for used car loans at 7.3% -9.9% and Bank of India offers these loans at 7.35% -8.55% and Union Bank at 8.9 % -10.5%, according to Paisabazaar.com.