Auto Financing: Buying a Car is Easier

A middle-class person of the society would spend half of his/her lifetime to save money for buying a brand new car. But those days are gone. Nowadays, most of the companies and individuals as well prefer to buy new vehicles on installments. The void space between the dream car and reality is now being fulfilled by most banks and financial institutions. And why not, these Auto financing schemes do not pressurize the customer with a huge amount of money to pay upfront. There are about a 50 different banks allover India offering auto loans.

With the production and demand of attractive and stylish cars increasing by the day, the banks and financial institutions are competing with each other to offer their customer cost efficient schemes. This is giving the customer multiple options to choose from. Auto financing consists of a number of parameters, which include the tenure of payment, the margin offered by the respective bank or institution, the interest rate and the processing fee. A customer should judge a car loan based on these parameters.

A customer opting for auto financing firstly has to pay percentage of the car price as the margin; to the bank. The margin varies between 10-25 percent. The tenure of payment is the time through which a customer would like to pay back his or her loan. Most banks offer tenure between 1-3 years. The interest rate is the proportion in which the loan gets amplified with time. Most Indian banks offer an interest rate starting from about 11%. The processing fee is the money paid to the bank for providing the customer with the loan. It may be specified by the bank or paid as a percentage of the car price.

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