How to Buy a Second-Hand Car with Finance

A brand-new car may feel exciting. But it isn’t always the most practical choice. Especially with prices going up. If you’re on a budget or want to make a smart money move, a second-hand car is a great option. Whether it’s your first car or an extra one for the family, a well-kept used car gives you good value. And it does that without burning a hole in your pocket.

And the good news? You don’t have to pay everything upfront. Today, you can easily buy second hand car with finance from banks, NBFCs or digital loan providers. You can even apply for used car online loans with minimal paperwork and quick approvals.

Let’s explore the best ways to finance your car, the options available and how to choose the right deal for you.

Why Choose a Used Car Loan?

Here’s why many people today are opting for a pre owned car loan:

• Lower car prices mean lower loan amounts and manageable EMIs
• Wider choice of models within your budget
• No need to compromise on quality with certified used vehicles
• You can get loan available for second hand car from trusted lenders online
• Perfect for buyers who want to upgrade later or avoid rapid depreciation

Important Factors to Keep in Mind When Buying a Used Car

Before applying for used car online loans, make sure the car is worth the investment. Here’s what to look for:

• Check the condition: Inspect the car thoroughly or take a mechanic with you
• Verify documents: Look at the registration certificate (RC), insurance papers and service history
• Do a test drive: Drive the car on different road types to check performance
• Match engine and chassis numbers: They should match what’s on the papers
• Transfer RC and insurance: This step is important post-purchase
• Service the car: Before you start driving, get a full service done

Also, remember that lenders usually finance cars that are up to 10 years old, but they prefer vehicles under 3 years old. A newer car improves your chances of getting better used car financing options.

Best Ways to Finance a Used Car Loan

You can explore different used car financing options depending on your budget and the car model.

• Personal loans: Quick, unsecured and with minimal paperwork. Good for small-to-mid ticket purchases.
• Pre owned car loan: Offered by banks and NBFCs, usually with lower interest rates but more paperwork.
• Dealer financing: Many used car dealers offer tie-ups with finance partners for instant approval.
• Online loan platforms: Digital lenders offer used car online loans with instant approval, flexible tenures and doorstep documentation.

When comparing options, always check for processing fees, which usually range between 1-3% of the loan amount. These can impact your total cost.

Tips to Get the Best Used Car Loan Deal

Want to get the best deal on your used car loan? Here’s what can help:

• Check your credit score: A higher score often means lower interest rates
• Go for a newer model: Lenders prefer cars under 3 years old
• Compare offers: Always shop around and consider different lenders before deciding
• Get your car valued: Proper car valuation ensures you get a fair loan amount
• Add loan insurance: Consider loan insurance for EMI protection in case of job loss or emergencies

Also Read: Short term loan vs long term loan

Important Aspects of Acquiring a Car Loan

• Loan amount: Decide how much you need after accounting for your down payment
• Tenure: Choose a term that gives you affordable EMIs
• Interest rate: Compare rates from banks, NBFCs and digital lenders
• Processing charges: Factor in one-time fees of 1%-3% of loan amount 
• Documents needed: Keep Aadhaar, PAN, salary slips and bank statements ready
• Prepayment flexibility: Check if there are charges for early repayment
• Eligibility: Age, income and job type can affect approval chances

If you’re looking to finance a second-hand car without the usual hassles, Fibe can make it easy. You can get a pre owned car loan of up to ₹5 lakhs with just basic documentation. Even if your credit score is low, our alternate credit model looks beyond it.
Enjoy quick approvals, fast disbursal and no extra charges for prepayment. Ready to get started? Just download the Fibe app or sign up on our website!

FAQs on the Best Way to Finance a Used Car

What is the smartest way to finance a used car?

The smartest way is to compare loan available for second hand car across banks, NBFCs and online platforms. Choose one that offers low interest, flexible EMIs and minimal charges. Going for a newer car also helps in getting better deals.

Can I get a 100% used car loan?

If you’re looking to buy second hand car with finance, most lenders cover 80-90% of the car’s value. But, 100% financing is possible in some cases, depending on the car’s age and your profile. However, you may still need to pay for insurance and registration separately.

How old can a car be to get financing for it?

Usually, lenders finance cars as old as 10 years, but not beyond that. So if you’re wondering, can we get loan for used cars, yes, you can. But most lenders prefer cars that are under 3 years old.