Buying a car is not considered luxury anymore rather it has become a necessity. Consumers have several choices when it comes to purchasing new cars. It is not just about choosing the brand and the model of a car, the bigger question of whether to opt for car loans or no loans. Loans for cars are available at different interest rates and terms. All leading public and private banks offer car loans at very competitive rates. When you avail car loans, you will get a list of benefits. Though all banks have different benefits and features that make their auto loans unique, some common features are there in all car loans.
When you compare Loans vs No Loans, it is better to go a loan rather than buying from your savings. Once you qualify for car loans, purchase the vehicle immediately.
Advantages of Availing Car Loans:
Buyers across the country mostly prefer buying cars on loan. Availing car loan is a better option as it offers numerous benefits including the following:
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Wider Eligibility
Due to enhanced competitors among the banks the customers receive a lot of benefits regarding greater coverage under the car loan eligibility criteria. Anyone who has a basic income source can now easily avail car loans from banks and financial institutions.
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Simplified Process
The present procedures to avail car loans have been simplified to a great extent. More and more people can avail car loan online. The approval and the documentation process take very little time, say within 24 hours and in many cases, you get spot approval.
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Lower Margin Money
Presently, the banks are ready to finance almost 95 percent of the car’s road price. It means buyers do not have to face the hurdle of extra expenses in insurance, accessories, registration, and insurance. Therefore, people who have minimal funds can own a vehicle easily through the new schemes.
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No Additional Collateral
In case of car loans, the vehicle that you purchase becomes the collateral thus eliminating the requirement to provide other property as collateral for the loan. So, in case you make any default to pay car loans, the bank shall repossess the car and not other assets of the loan borrower.
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Customized EMIs
The car loan financiers allow borrowers to customize their EMIs according to their repayment capacity. When you pay a huge margin, you reduce the EMI as the EMI gets spread over the loan tenure. The processing fee has been reduced too in case of car loans.
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Complete Ownership
As against the lease scheme, car loan enables borrowers to become the absolute owner of cars. They can undertake whatever modifications they need according to the personal taste of buyers. Buying cars through car loans allow your unlimited use and this is not possible in lease schemes.
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Dealer Benefits on a Used Car Loan
The car dealers with their tie-ups with the financiers can offer the buyers a better car deal via discounts on the car’s price and other charges including insurance and registration. The car dealers can forgo a part of their commission that ultimately works for the benefit of their customers. Dealers offer benefits on new cars as well as used cars.
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Staying Away from the Income Tax Department
If you buy a car at the beginning of your career, it will be expensive for you. If you buy a car with no loans then you can get into the radar of the Income Tax Department. When you buy a car with car loans, you can build your credit history and making a payment on time. This shall help you avail other loans in the future.
On the other hands, there are some advantages too while buying a car without loan.
Advantages of Buying a Car Without Loan
- You can be away from any debt, liability or loan problems.
- The depreciation cost of the vehicle is high and fast, so sometimes your loan may not get over, but the value of the vehicle may be reduced to very low.
- You will not have to pay any extra money to the bank or NBFC, in terms of rate of interest.
- You will be liable to pay the loan amount to the financial institution even if your vehicle gets stolen or damaged.
However, when you compare car loans vs no loans, buying a car with car loans is always beneficial. Even the buyers capable of paying the full amount in lump sum opt for EMI facilities. Get complete information on car loan from Droom. They are providing expert assistance in this matter. With a host of the features of car loans along with its benefits, availing car loans is a preferred route to own two-wheelers or four-wheelers.