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

 

[RitamModak]

Assumptions:

• Car price: ₹23 lakhs
• Down payment: 30% (₹6,90,000)
• Loan amount: ₹16,10,000
• Interest rate: 8% per annum
• Loan tenure: 2 years (24 months)

Repayment Table:

Month	Beginning Balance	Monthly EMI	Interest Paid	Principal Paid	Ending Balance
1	₹16,10,000	₹73,134	₹10,667	₹62,467	₹15,47,533
2	₹15,47,533	₹73,134	₹10,317	₹62,817	₹14,84,716
3	₹14,84,716	₹73,134	₹9,965	₹63,169	₹14,21,547
...	...	...	...	...	...
23	₹1,78,923	₹73,134	₹1,193	₹71,941	₹1,06,982
24	₹1,06,982	₹73,134	₹713	₹72,421	₹0

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Note: With a 30% down payment, the monthly EMIs are significantly lower compared to a 3% down payment. This is because you're borrowing a smaller amount, which reduces the interest costs.

Key benefits of a higher down payment:

• Lower monthly payments: This provides more financial flexibility.
• Reduced interest costs: You'll pay less in interest over the loan term.
• Faster payoff: You can pay off the loan more quickly.

If possible, try to save up for a higher down payment to enjoy these benefits.

Disclaimer:​

Interest rates for car loans can fluctuate frequently. For the most accurate and up-to-date information, I recommend checking with individual banks or using online comparison platforms.

Here's a general comparison of interest rates from major banks in India as of October 2024. Please note that these rates may have changed since then:

Bank	Interest Rate (Approximate)
HDFC Bank	7.25% - 10.25%
ICICI Bank	7.50% - 10.50%
State Bank of India (SBI)	7.75% - 10.75%
Axis Bank	7.90% - 10.90%
Bank of Baroda	8.00% - 11.00%

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Factors that can affect interest rates:

• Credit Score: A higher credit score generally leads to lower interest rates.
• Loan Amount: Larger loan amounts may have slightly higher interest rates.
• Loan Tenure: Longer tenures might have slightly higher rates.
• Type of Car: The type of car (new or used) and its value can influence interest rates.

Online Comparison Platforms:

• BankBazaar: ***********.bankbazaar.com/
• Paisabazaar: ***********.paisabazaar.com/

These platforms allow you to compare offers from multiple banks and find the best deal based on your specific requirements.

Cashback Cards for Down Payments:​

Cashback cards can be a great option for earning rewards on your down payment for a car. Here are some of the top cashback cards in India that you might consider:

HDFC Bank Regalia Credit Card​

• Cashback: Offers 1% cashback on all purchases, including down payments.
• Annual fee: ₹2,500
• Other benefits: Travel insurance, airport lounge access, and complimentary golf green fees.

American Express Membership Rewards Credit Card​

• Cashback: Offers 1% cashback on all purchases.
• Annual fee: ₹3,000
• Other benefits: Travel insurance, airport lounge access, and concierge services.

Remember to:

• Compare offers: Research different cashback cards and compare their features, rewards, and fees.
• Read the terms and conditions: Understand the terms and conditions of the card before applying.