Buying a vehicle was never this easy.
Organized and institutional auto finance has come into its own with the
coming in age of the 90s. Their services are being marketed aggressively
and imaginatively, loans sanctioned quickly and formalities completed
within a day or two.
In a recent research it was found that
60% of car sales of Rs. 64 crore billion were supported by auto loans of
Rs.40 billion. By 2000, the demand for auto loans is estimated to
increase to about 120 billion.
For the average loan seeker, however, deciding on which loan to take,
on what terms, whether to go to the financier or the bank, the marketing
jargons, the dealers to choose -afford a veritable dilemma. In such a
scenario, it would be much better if you were a well - informed customer
and knew what was in store for you. We hope this page will go a long way
in clearing those cobwebs that had you flummoxed.
You want a loan... you don't want a loan ...but... well...
Whatever your decision, we present either sides of the coin
Taking a loan amounts to your committing yourself to regular payments
for a while, till you pay off your the amount you have loaned that is.
On the plus side, loans offer you the chance of buying a vehicle when
you cannot afford to buy it upfront.
Financially too, it is a viable offer. Generally the financiers offer
80% of the total amount of the vehicle as loan. Keeping this in mind, if
a vehicle costs Rs. 2.25 lakh today, you will receive a loan of Rs. 1.80
lakh. At the current rate of interest at 16%, you will have to repay Rs.
6,330 for the next 36 months.
Alternatively, saving the same amount of money saved would get an
interest of 12% and it would be 30 months before you bought the vehicle.
By 30 months, your investment amounts to roughly Rs. 2,20,000 which will
still be 80% of its value at that time, assuming its price has shot up
to Rs. 2.75 lakh by now.
The big difference, however is, that had you taken that
loan, it would have been in your possession 3 years earlier.
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