Car Loan Interest Rates in 2018
Lenders offer car loan for purchase of new as well as used car. The car loan is generally given for a maximum tenure of 7 years. Car Loan interest rates can primarily be classified into two categories i.e. fixed rate and floating rate of interest.
The interest rate offered by the lenders on car loans in India may actually vary from the one advertised either in the newspaper or any other media. Unlike other loan products , the interest rate for auto loan varies highly depending on various factors like credit score of the borrower, make and the age of the car and quantum of car loan sought by the borrower.
Since car loan interest rates are based on the models of the car, it is advisable to decide on the model and make of a car in advance so that you are aware of the interest rate on your car loan. Loans for used car or second hand car carry a higher rate of interest as compared to new car loans. However some PSU banks offer the same rate of interest for the used car loans as well as the new car loans.
5 step process to get the best Car Loan rates:
Step 1 – Negotiate your car loan independent of your car purchase. You can consider the car loan rates being offered by the car dealer but also obtain car loan interest rates from the Apnapaisa.com network to get the best possible rates.
Step 2 – Finalize the loan amount and the loan period before you begin negotiating the rate of car loan interest
Step 3 – Negotiate the car price separately with the dealer from any discounts he is willing to give. The discount being offered by the lender should be used for adjusting your down payment rather than being used to provide cheaper car loan. Keeps the car pricing and interest rates on car loan separate. In order to get the best deal on car prices, negotiate for cash discounts and get it quantified rather than car opting for additional accessories in its place. Once this reaches its limits you can negotiate for minor accessories such as floor mats and dickey mats etc.
Step 4 – Negotiate your car insurance separately from your car purchase as well as car loan. You can transfer your no claim bonus from your existing 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.
Step 5 – Ask for loan EMI quotations for each provider separately as well as details of 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.