Second-hand luxury cars come with an option of financing just as any normal car does. Let’s be honest, financing sounds like a viable option until you finally start paying back. Customers in pursuit of buying their dream car are often so blinded by the perks that insurance companies offer that they dig their own graves.
Hence it is very significant that you keep your eyes wide open and don’t make impulsive decisions. Otherwise, you’ll end up paying so much more than what you’re liable for.
This happens as most of the people who plan to buy used luxury cars are dependent on the dealer to provide them with every bit of information. What they ignore in the process is that the dealer can easily tamper with the information and yet manage to influence them into a deal not worth it.
Although this is a very recurring thing, very basic research can help you manipulate the conversation and shift the benefits to your side. Here are 8 tips to get desirable deals while buying used luxury cars
1. Pay 15-20% upfront as the down payment
Many people shy away from paying upfront down payments on used luxury cars and the rest choose to finance on zero down payment. While this looks so tempting, it’s not recommended. The two major reasons why this is not a recommended thing to do are- firstly this increases the interest rate tremendously and second it increases your loan term. It’s basic math.
2. Separate the car’s costs from add-ons!
While you’ll be deciding which car to go for, the financing agent of your chosen company will be deciding- how to sell you more in the name of the car’s life? Along with financing your car comes many other options like availing extended warranties and roadside assistance packages. Now whether you should opt for these or not is a discussion for another time, but what you certainly shouldn’t do is add the cost of these add-ons to the amount of loan you’re availing of.
Why unnecessarily increase the loan amount and the rate of interest levied on you? Pay for these benefits and add-ons through cash instead. Moreover, used luxury cars in Delhi are eligible to get extended warranties and additional perks even after the process of financing has been completed.
3. Try not to skip your EMIs
Skipping your EMIs without knowing the possible repercussions is the worst thing you can do. With high interest rates, secured collaterals, and additional charges, banks hardly incur losses in case of arrears of payments. And with you skipping your EMIs, believe it or not, it’s just another source of profit for them.
If you’ve ever had a proper conversation with any financing agents of used luxury cars in Delhi, you would know the high ECS charges these financing companies charge. These can be as high as 1000 bucks for a single instance, which in most cases isn’t a monthly thing. Implying that they can charge this much as many times as your ECS mandate fails to clear from your bank. While many banks mention these details to their customers, loan bearers usually are negligent in these aspects.
4. Know your credit score
Before you choose to entrust a particular bank with your financing needs, ask around. Get to know what the market is offering at the moment and most of all, know your credit score. As your credit score significantly impacts your interest rates. If you have a good credit score of say above 750, you are likely to get offered a low annual percentage rate on your loan. But this is only beneficial if you can compare what you’ve been offered with what you should get.
5. Try to make pre/part-payments whenever possible
Prepayments are always recommended, as what is better than paying off what you owe. However, it’s not possible to have cash in hand all the time. Thus banks allow you to make part-payments against the principal loan amount once or twice a year. Making part payments can help you reduce your interest rate significantly. Although subject to your bank’s policy you might not be allowed to make part payments more than twice.
6. Choose your bank wisely
It all comes down to one bank and its policies. Hence make sure you read all policy-related documents carefully. Different banks that provide financing services for used luxury cars in Delhi NCR charge differently and you need to choose the one that fits best to your requirements. While making a deal ask for foreclosure charges, non-payment penalties, ECS charges, documentation charges, swap charges, and cheque bounce penalties, etc. If you don’t confirm these specifications at the time of the deal, these will haunt you as hidden costs later. So don’t shy away from asking for all the information you need to make a well-informed decision.
7. Don’t fall prey to “High-Interest Rates”
High-interest rates are a cause for concern. Your interest rate is calculated after considering many factors such as your credit score, down payment, tenure of the loan, income level, etc. However, a single quotation from a company isn’t the end of the world.
Also, one way of decreasing your overall interest rate is to pay a good down payment or decrease the term of the loan or do both. This decreases the overall loan amount and thus reduces the interest rate significantly.
One way financial agents coax you into their deals is by using low monthly EMIs as lollipops. These deals look pretty good on the outside, however low EMIs will increase your loan term which means higher interest rates. Companies usually lure the buyers of luxury second-hand cars into signing up for a low EMI to fulfill their personal agendas.
Does refinancing work for second-hand luxury cars?
Refinancing is a good option, but it is more difficult to get a vehicle approved for refinancing. Companies offering this service will only approve the request if the vehicle has a good market value.
What is the recommended loan tenure for financing any car?
The shorter the better. There’s no rule book to financing that you must adhere to strictly. However, if you are capable of paying a little more every month, then paying back the earliest is the option you should go for.
If you follow these tips, you’re more likely to get the best deals in the market. One last tip would be to always negotiate even if you’re getting the best deal. You’ll be surprised to see how much you can save if you make well-informed decisions.
Check out Kings Auto’s collection of certified quality assured used luxury cars in Delhi NCR to get the best deals in the market.