The Indian used car industry is huge and is only growing by the day as several people are opting for second-hand vehicles due to their lower prices. Additionally, most banks and non-banking financial companies (NBFCs) offer loans at attractive features, making it easier for everyone to buy used vehicles.
However, the Indian used car lending industry is different from other countries due to the following four reasons.
- Market size
The second-hand car industry is almost 50% higher than the new car market and is estimated at $20 billion. This provides lenders with a huge opportunity in the used car finance segment. However, the number of cars per capita is much lower in India than in other western nations.
- Financing options
Banks dominate the loan industry followed by NBFCs. Captive finance companies, which are fully owned subsidiaries of manufacturers also form a small part of this industry. Often, when you buy a used car from a dealer, you can explore captive finance options. In comparison, the global used car loan industry is dominated by captive finance companies.
- Product offerings
The product offerings in the Indian car financing industry are limited to one transaction. In Western Europe, lenders offer additional services like warranty, insurance, and maintenance. Some captive financiers may even have banking licenses and offer bank accounts and special credit card products.
- Eligibility and documentation
The used car market in India is fragmented, unorganized, and unregulated. Even with credit rating agencies, the processing time can be longer due to multiple checks. On the other hand, international countries have strong credit systems, making it simple and quick for various parties to access necessary information, determine creditworthiness, and complete the loan process
However, the scenario in India is now changing with lenders offering quick and simple processing with minimal documentation requirements and easy eligibility norms. You can also apply for a loan online by providing the necessary information and uploading the used car loan documents to complete the process quickly without any hassles.
Top NBFCs like Mahindra Finance offer benefits like competitive used car loan interest rates, minimal documentation requirements, and flexible tenure. The loan is available for salaried borrowers between 21 and 60 years old. Self-employed borrowers between 21 and 65 years old can also avail of the loan at affordable used car loan rates.
The documents required include identity, address, and income proofs and copies of the registration certificate, insurance policy, and bank statement. The loan repayment tenure is between one and five years and depends on the condition and age of the vehicle. Check the used car loan charges and apply for the loan by visiting the official online portal of Mahindra Finance now.