Which is the best Used Car Loan?

Consumer Voice compared used car loans provided by various nationalized and private banks on the basis of used car loan rates, max. and min. eligibility age, maximum loan amount, processing charges, loan repayment period etc to find the best used car loan or best used car finance option.

Banks Compared: Axis Bank, Canara Bank, Central Bank, Federal Bank, HDFC Bank, ICICI Bank, Karur Vysya Bank, Punjab National Bank, State Bank of India, Vijaya Bank and Union Bank of India

A used car was sold for every new car sold in India in 2014. Each year, over 3 million used cars are sold in India, as against 2.2 million new cars. In 2015–16, 3.3 million used cars were sold versus 2.8 million new ones. Alongside, used-car finance in India is expected to grow from below $2 billion now to over $10 billion of annual lending by 2021. The entry of organized players in what was hitherto a largely unorganized sector, coupled with behavioral changes among sellers and buyers, have driven the market to unprecedented growth levels. To all appearances, the market is going to only grow. The following report is an encapsulation of some essential things that a prospective buyer should know if they are planning to get their car financed by a bank. A comparative study of 11 banks along critical variables will also tell you a thing or two about what to expect in terms of services and charges.

For the comparative assessment, we chose 11 banks based on consumer feedback and product structure obtained from website/online/customer care information. The parameters on which we have compared them include rate of interest, eligible annual income, maximum loan, age of car, prepayment charge, processing charge, margin, maximum repayment period, and maximum and minimum eligibility age. We gave the highest weightage (15 points) to consumer feedback, which helped in determining product and service quality as well as the most important and beneficial variables. These variables have a direct bearing on the product structure.

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Banks Compared

  • Axis Bank
  • Canara Bank
  • Central Bank
  • Federal Bank
  • HDFC Bank
  • ICICI Bank
  • Karur Vysya Bank
  • Punjab National Bank
  • State Bank of India
  • Vijaya Bank
  • Union Bank of India

Parameters Compared

  • Rate of Interest
  • Third-Party Surety
  • Eligible Annual Income
  • Minimum Eligibility Age
  • Maximum Eligibility Age
  • Age of Car
  • Maximum Loan
  • Margin
  • Processing Charge
  • Maximum Repayment Period
  • Pre-payment Charge
  • Consumer Feedback

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