Factors to consider while choosing your new car and applying for a loan

4 MinsNov 18, 2022

The festive season is typically when many people tend to buy a new car. After all, what better way to add an extra zip to the celebrations than with a new set of wheels!

Factors to consider while choosing your new car and applying for a loan

If you are thinking along similar lines, there are a few aspects for you to consider.

Points to consider when deciding which car to buy:

  • Usage: While most people would love to own a muscular SUV or a sleek sports car, if the bulk of your driving is going to be in crowded cities, commuting to work and back, you should opt for an appropriate model.
  • Transmission: The traffic congestion in large metros means that automatic transmission is likely to be a more comfortable option. However, such cars are costlier and low on mileage. Give this a thought and choose what works best for you.
  • Petrol, diesel, CNG or EV: With rising fuel prices, Electric Vehicles (EVs), though more expensive, are increasingly finding favour with customers because of lower operative costs. Their range per charge, however, tends to be limited.
    CNG is a greener option among the Internal Combustion Engine (ICE) powered cars, but check whether your city has enough filling stations. Between petrol and diesel, it is a decision between higher one-time cost (diesel) or higher operating cost (petrol). Also, remember that diesel cars need higher maintenance after a few years.
  • Sell or trade-in: If you already own a car, you may be offered an exchange deal while buying the new one. However, generally speaking, the trade-in prices are lower than what you may get by selling the car in the market. Study the alternatives before taking a decision.
  • Budget: Decide a budget depending on your financial situation and stick to it. Having a flashier or more luxurious car is pointless if you are going to struggle to pay the EMIs (Equated Monthly Instalments). Check out our EMI calculator to know more.
  • Festive offers: Banks often have tie-ups with car manufacturers that may result in attractive deals for customers. Once you zero in on your preferred budget and model, check out this aspect.

[Also ReadApply for an instant car loan online anywhere, anytime]

Point to consider when applying for a car loan:

Credit score: Go to a credit bureau’s website (for example, CIBIL) and check your credit score. You will likely get better deals from lenders if your credit score is 750 or higher.

Tenure: A longer tenure would mean lower EMIs but a higher total interest outgo and vice versa. Use the car loan EMI calculator on the lender’s website to see what works for you.

Down payment: A higher upfront payment may reduce your loan burden and hence the cost of servicing it. See what works for you.

Foreclosure fees: If you repay your loan before its full tenure, banks tend to charge a foreclosure fee that is a percentage of the principal amount outstanding. You need to be aware of this as it could be a substantial charge.

Axis Bank offers new car loans for up to 100% of the on-road costs. Tenures can be as long as seven years. It also has tie-ups with several manufacturers and their dealers, leading to exclusive customer benefits.

Customers can apply online either through the Axis Bank mobile app or Netbanking. Get more details on Axis Bank car loans online.

Disclaimer: The Source, a content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.