Vehicle loan rates may seem ambiguous at first, but if you understand the factors that influence them, you can get the lowest vehicle loan interest rates that won’t break the bank. Two things can affect auto, car, or bike loan interest rates: the type of vehicle and lender choices. Let’s take a deep dive into the topic today to help you secure the most lucrative loan deals!
Understanding vehicle types and their impact on vehicle loan rates
Scenario #1: New vehicle vs. Pre-owned vehicle
The interest rates on pre-owned or used vehicle loans are typically higher compared to new vehicle loans. Since used vehicles have already depreciated, they have higher maintenance costs and lower resale value, making it riskier for lenders to recover costs in case of default. They usually tend to charge higher interest rates to compensate for this risk.
However, if purchasing a pre-owned vehicle is your only option, you can take various steps to bring down the used car loan interest rate or second-hand bike loan interest rate:
- Negotiate the vehicle purchase price.
- Maintain a high credit score.
- Make a higher down payment.
- Opt for a shorter loan tenure.
- Did you get extra cash? Make loan prepayments!
Scenario #2: Age and condition of the pre-owned vehicle
Depending on your budget and requirements, purchasing a pre-owned vehicle on loan may be your best option. In that case, remember that three factors will affect the used three-wheeler, car, or bike loan interest rate: the age of the vehicle, the number of owners, and its condition. Old vehicle? A long list of previous owners? Significant wear and tear? You’re automatically signing up for higher loan interest rates. So, even if you’re getting a pre-owned vehicle, consider one that is neither too old nor in an extremely poor state. Additionally, follow the tips discussed earlier to reduce the used car loan interest rates or second-hand bike loan interest rates.
Scenario #3: Conventional ICE vehicle vs. Electric vehicle
The interest rates on electric vehicle loans compared to traditional petrol or diesel vehicle loans are similar in some situations and vary in others.
- Electric car loan interest rates are lower or at par with traditional petrol or diesel vehicles.
- Electric bike loan interest rates are higher than traditional two-wheeler ones.
- Electric three-wheeler loan interest rates vs. traditional three-wheeler loan interest rates differ from lender to lender.
In short, the loan interest rates in this scenario are subject to change. Two reasons. Firstly, EVs are a new entry in the vehicle market, and technological evolutions are still underway. There’s little understanding about EV batteries, including their lifespan, replacement, and repairs. Secondly, the resale market of EVs has not yet taken off full-fledged. So, lenders still consider EVs to be high-risk compared to traditional vehicles. At the same time, the growing demand for EVs is helping reduce the perceived risk. Hence, the loan interest rates vary greatly at present. Things may change in the near future, but for now, it’s best to compare your options before making a decision.
Understanding lender choices and their impact on vehicle loan rates
Scenario #4: Bank vs. NBFCs
When getting vehicle loans, you have two options: a bank or an NBFC (Non-Banking Financial Company). Both have a different approach to vehicle loan rates. Banks must follow stringent rules and regulations set by their regulatory body, the Reserve Bank of India (RBI).
In contrast, NBFCs have the freedom to take a more flexible approach. They consider the cost of funds, market competition, and economic factors when deciding lending rates. Additionally, they believe in a case-by-case approach, evaluating each applicant’s eligibility criteria, credit score, loan amount, and tenure to offer the best vehicle loan rates in India, accommodating every type of borrower.
Are you ready for your vehicle loan purchase? Look no further than Manba Finance!
Manba Finance, India’s top NBFC, has earned a reputation for offering borrowers the attractive vehicle loan interest rates. You can choose between different vehicle loan types, including new or pre-owned two-wheelers, EV two-wheelers, conventional or EV three-wheelers, and used car loans.
Besides offering the best vehicle loan rates in India, Manba Finance provides many benefits:
- Online process
- Only three application documents
- Fastest Approvals
- Rapid disbursement of funds
- Funding of up to 90%
- Flexible loan tenures
- Prompt customer service
Join the 900K+ customers who are currently happily riding their dream vehicles with financial assistance from Manba Finance. Apply now or contact us for any queries!
