HDFC Bank is the largest provider of car loans in India (August 2012) and provides car loans for both new and old cars.
How much loan can you get for buying a new car from HDFC?
Typically you will get a loan up to 90% of the ex-showroom price of the car (meaning the total price of the car excluding the registration cost and insurance cost). The loan amount will also depend on your income as well as a good repayment track record on past loans and credit cards.
Currently HDFC Bank only offers a fixed rate car loan meaning that the interest rate on the car loan remains fixed for the entire duration of the car loan. The car loan is available for a period of 1-5 years to a maximum of 5/7 years for a new car loan.
As car loan interest rates vary widely, so you should use the tips given below to get the best HDFC Car loan possible. There is a significant amount that has to be paid as processing fees ranging from Rs. 2949 to Rs. 5562 depending on the amount of loan. This is normally negotiable, so negotiate hard before finalizing.
What car loan tenure should you choose?
The pre-payment charges on a HDFC Car loan ranges from 3.37% to 6.75% so you should choose your loan tenure with care. If you change your car every 3 years then choose 3 years tenure so that you do not incur a pre-payment charge unnecessarily when you wish to sell the car.
Follow the 5 step process to get the best HDFC Car Loan rates:
Negotiate your car loan separately from your car purchase. You can consider the loan rates being offered by the car dealer but also obtain rates from the apnapaisa network to get the best possible rates.
Finalise the loan amount and the loan period before you begin negotiating.
Negotiate the car price separately from the dealer and any discounts he is willing to give should be adjusted against your down payment, rather than being used to provide cheaper car loan. To get the best deal on car prices, negotiate for cash discounts rather than car accessories and only when that reaches its limits you can negotiate for minor accessories such as floor mats, and dickey mats etc.
Negotiate your car insurance separately from your car purchase as well as car loan. You can transfer your no claim bonus from your old car for the insurance of the new car. For example if you had a 50% no claim bonus on your old car you can shift the no claim bonus to your new car from the same or any other insurance company. If the car dealer offers the car insurance policy at premiums similar to that offered by others, it is better to take the policy through him to obviate any administration issues.
Ask for loan EMI quotations for each provider separately as well as processing fees and pre-payment charges. Foster competition among them for lower EMI first and then lower processing fees. Pre-payment charges are usually not negotiable.
Choose the best option among the offers you receive.