Need Advice on Buying a 23L Car xuv 700 – Down Payment, Loan & Options

[pulkit.gupta4444]

Hi all, I’m planning to buy a car worth ₹23 lakhs and need some advice:

Down Payment: How much should I ideally put down? I may also use my credit card for part of it.

Loan & Interest: What’s the typical interest rate for car loans now? Any tips on loan amount and getting the best rate?

Personal Loan Option: A friend working in a bank said he could get me a lower rate if we take a personal loan in his name instead of a car loan in mine. Has anyone done this? What are the pros and cons?

Thanks in advance for any advice!

 

[SukhpalHundal]

Hi there! Buying a car is a huge decision, so it’s great that you’re seeking advice. Here’s a detailed breakdown to help with your decision, hope it helps you:

1. Down Payment​

• Typically, putting down 20-30% of the car’s price is a good practice. For a ₹23 lakh car, this would be approximately ₹4.6 to ₹6.9 lakhs.
• A larger down payment reduces the principal loan amount and, consequently, the interest paid over the loan term.

Using a Credit Card:

• Using a credit card for part down payment can be tempting, but be cautious of high-interest rates and potential fees.
• Credit card interest rates are usually much higher than loan rates. Ensure you can repay the amount quickly to avoid high interest.

2. Loan & Interest Rates​

Current Rates:

• As of now, car loan interest rates in India typically range from 7% to 12% per annum, depending on the bank and your credit profile.

Tips for Getting the Best Rate:

• Check Multiple Lenders: Compare rates from different banks and financial institutions. Online tools and aggregator sites can be helpful.
• Improve Your Credit Score: A higher credit score usually translates to lower interest rates.
• Negotiate: Sometimes, banks may offer better rates if you negotiate or if you have a strong banking relationship with them.
• Loan Tenure: opt for a tenure that you are comfortable with, as longer tenures may have lower EMI amounts but results in more interest paid over time.

3. Personal Loan Option​

Pros and Cons:
Pros:

• Potentially Lower Interest Rate: If your friend can secure a personal loan at a lower rate, it might be more cost-effective than a car loan.

Cons:

• Loan Terms: Personal loans might have different terms and conditions compared to car loans, such as shorter repayment periods.
• Impact on Friend’s Credit: Taking a loan in someone else’s name could affect their credit score and financial situation.
• Legal and Financial Implications: There could be complications if you’re unable to repay, as it would impact your friend’s credit and relationship.

Important Considerations:

• Documentation: Ensure all paperwork is transparent and properly documented, especially if your friend is involved.
• Repayment Plan: Clearly define how repayments will be handled and make sure both parties are comfortable with the arrangement.

Final Recommendation:

• For most buyers, using a combination of a substantial down payment and a car loan from a reputable lender is usually the simplest and most transparent approach.
• If you’re considering using a personal loan through a friend, ensure that all legal and financial aspects are carefully considered and discussed.

Good luck with your car purchase! If you have any more questions or need further advice, feel free to ask.

 

[zacobite]

Hi all, I’m planning to buy a car worth ₹23 lakhs and need some advice:

Down Payment: How much should I ideally put down? I may also use my credit card for part of it.

Loan & Interest: What’s the typical interest rate for car loans now? Any tips on loan amount and getting the best rate?

Personal Loan Option: A friend working in a bank said he could get me a lower rate if we take a personal loan in his name instead of a car loan in mine. Has anyone done this? What are the pros and cons?

Thanks in advance for any advice!

Car Loan better than PL.. High amount will hurt his credit history and while he maybe a good friend, not advisable. Better is to find a friend who can get a car via CSD

CC to pay downpayment may give you good returns depending on which card u have and hw much fee u can negotiate.. ( has to be paid back in full for best value)

Good time to buy a car.. Negotiate hard...

Car Loan rates are 7.5% upwards depending on hw much LTV is taken.. get ur own loan and own insurance to save..

Downpayment varies.. negotiate hard for lowest.. take maximum loan.. invest the money kept for Down Payment in a relatively safe instrument..

Again.. Negotiate hard.. xuv700 is a popular car.. may have waiting periods / lower discounts, offers