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tejasmehta990 posted a topic in Indian CarsThough there are lots of cars are available within price range of 2 Lakhs but if you want to apply for loan and having very fixed budget and don't want to spend beyond certain fixed amount monthly on EMI than your selection gets very limited and out of that selection you need to choose the best possible option. Recently I happened to learn a lot about pre-owned cars and related things and I found out very useful information that I would like to share with you all. This information may be helpful for those who are looking for pre-owned car by availing LOAN facility and having very tight budget. All the following information is for reference only and is not binding. (1) Age of pre-owned Car to avail loan Generally Bank gives loan on pre-owned cars which is not more than 10 years old. Banks don't give loan on old cars. Any person who is looking for a pre-owned car and wants loan facility for maximum tenure (5 Years is the maximum tenure offered by most of the banks for pre-owned cars) should look for car which is not older than maximum 5 years from the current date to avail longest LOAN tenure so that monthly EMI reduces to the lowest. For eg. If a person is looking for pre-owned car today i.e. dtd 01-08-2016 and would like to take decision within 2 or 3 months should look for car having manufacturing date of atelast August 2010 so that he/she can get loan for atleast 4 years. Current Year Year of MFG Age of Car Loan Available for Years 2016 2007 9 Years Old 1 Year 2016 2008 8 Years Old 2 Years 2016 2009 7 Years Old 3 Years 2016 2010 6 Years Old 4 Years 2016 2011 5 Years Old 5 Years (2) Condition of the vehicle - Valuation / Inspection by the Bank Valuer Along with the age of car Bank get the car inspected by their valuer and decide it's value which is irrespective of the offer price or the price that buyer have negotiated with the seller. Bank approves the loan amount on the car as per their valuation only and also fix the tenure accordingly. The best part of availing loan apart from EMI is that the Bank only get the transfer done so buying vehicle on loan becomes very easy. Some time if the condition of the vehicle is good than Bank grants 100% loan so you don't need to pay single penny from your pocket upfront and you can start enjoy owning vehicle by paying just small EMI. Ensure that the Insurance of the vehicle is not expired and generally the value of the insurance is considered the highest loan amount that you can expect from the Bank. So try to negotiate with the seller for the price which is less than the Insurance value. (3) How to arrive at Monthly EMI figure I can not go much in detail about this because the interest rate and calculation of EMI changes from Bank to Bank but as per information available with me EMI on the pre-owned vehicle valuing Rs.200,000/- may arrive as below (APPROX). Information provided below is just to give idea. Current Year Year of MFG Age of Car Loan Available For (Approx) Cost of Vehicle Approx EMI 2016 2007 9 Years Old 1 Year 200000 Rs.21,400/- 2016 2008 8 Years Old 2 Years 200000 Rs.10700/- 2016 2009 7 Years Old 3 Years 200000 Rs.7150/- 2016 2010 6 Years Old 4 Years 200000 Rs.5350/- 2016 2011 5 Years Old 5 Years 200000 Rs.4300/- So If you have fixed your monthly outflow to Rs.4,500/- you can buy a pre-owned car worth Rs.2,00,000/- which should not be older than 5 years. Even if you opt for newer vehicle most of the bank gives loan for maximum period of 5 years. (4) Source of Purchase Finding a car within specified budget of under Rs.200,000/- and with AGE CRITERIA is most tiring process and requires lots of patience. You have to spend your valuable time to visit personally to the dealer or individual to inspect the vehicle who may be little far from your residence and you have to take decision with some gut feeling and with cross finger because you are not fully aware about the condition of the vehicle even if you are satisfied during initial test drive or thorough inspection even by your known mechanic. (a) Dealers : There are lots of dealers who offers pre-owned cars with "Certified" tag but I was surprised to learn that most of the dealers are not interested to make efforts to offer car with specific budget and age or they don't have much selection below the price of 2 Lakhs. I checked couple of reputed dealers such as "Mahindra First Choice" etc... but they didn't have cars within the specified budget or even if they have it limits to 1 or 2 cars. Also it is very surprising to learn that even if the car is certified while checking it physically you feel something awkward while driving the same and you feel that how come the dealer claims that vehicle is certified and how the certification of that vehicle is done. Also dealer tend to add lot of profit margin and generally dealers don't negotiate much. (b) Web portals : This is the best source to checkout the pre-owned cars within specified budget as you get lots of options from individuals and dealers un-know to you. You may refer to following websites cartrade.com , carwale.com , olx.in , quikr.in , cardekho.com , gaddi.com , and many more. As per my learning prefer to look for pre-owned vehicle near to your vicinity as it becomes easier for you to visit for inspection and also if you take decision to purchase the vehicle it becomes easier to collect necessary papers as and when bank ask for the same. Vehicle with local registration should be preferred. (5) Options Available within budget of Rs 200,000 suitable to avail loan on the same. The options becomes limited which you are looking for vehicle with multiple criteria and most importantly Budget and Age of Car. Some of the options are as below that matches the AGE and Pricing Criteria : (a) Tata Nano (b) Maruti Alto (c) Hyundai Getz (d) Hyundai Santro (e) Tata Indica (f) Tata Indigo eCS (g) Tata Manza (h) Ford Figo (Duratec Petrol) (i) Tata Vista (Petrol, Diesel) (j) Renault Logan (k) Fiat Linea (l) Fiat Punto (m) Hyundai Accent (n) Maruti Ritz (o) Maruti Wagon R (p) Maruti EECO (q) Maruti OMNI (r) Skoda Fabia Out of the above if we filter than following are the best option available (a) Ford Figo (b) Tata Manza (c) Skoda Fabia (d) Fiat Punto (e) Fiat Linea (f) Hyundai Accent (g) Maruti WagonR (h) Maruti Ritz (i) Tata Indigo eCS (j) Tata Vista (k) Renault Logan (l) Hyundai Getz (j) Chevrolet Beat Cars you should avoid : I asked couple of mechanics as to which car should be avoided while going for pre-owned and they informed to avoid RENAULT LOGAN , FIAT PUNTO and FIAT LINEA because repair and maintenance and parts availability is very difficult. Also the same thing I heard about Skoda Fabia but I feel Skoda has the best build quality among all other options available within price of Rs.200,000/- I feel Tata Manza and Hyundai Accent are the best available options as both are sedans and they offer big cabin space, luggage space and basic comfort features at small budget. Hyundai Accent looks bit old but offers acceptable fit and finish and Tata Manza still posses that road presence and the overall design is very imposing but fit and finish , electricals , mechanicals etc.. may raise some doubts Tata Indigo eCS is also one of the good option and looks best in Grey and Burgundy colour but than build quality and the overall feel and ownership experience is always a big question mark. Among the Hatchback Ford Figo seems to be the best option available as it offered lots of features such as inbuilt music system, acceptable cabin space, big boot space and peppy engine and FORD Badge that offers a feel that Tata or Hyundai can not offer. Hyundai Getz is also a good option. Tata Vista can be opted purely for it's big cabin space. (6) Unexpected offers You may come across some unexpected vehicles within price range and you should take a chance to atleast look at it. You never know some time you hit the jackpot but be very careful as there are more frauds than genuine offers when looking for pre-owned vehicle in sources unknown to you especially through internet. If you stretch your budget a little more by 50K to 100K than there are options available such as Toyota Etios and Etios Liva, Ford Fiesta. Some very good Ford Fiesta are available below 2.50L but I personally find cabin of Ford Fiesta too small but if you want a pure driving machine than Ford Fiesta is good option within fixed budget. Etios and Etios Liva are good options if you have budget for pre-owned car upto 3.00 to 3.25 Laksh (7) Negotiation Negotiation is also very important and when you are looking for a car within fixed budget look for car with little higher price than your budget and try to negotiate to bring the price down as per your expectation. Sometime seller accepts your asking price if he feels that his vehicle is going in good hands. Don't feel ashamed to ask your price. You may find some seller behave rudely when price is negotiated but ignore the rudeness and stick to your budget. Seller may agree if he/she really wants to sell. Negotiate you price with valid points such as Age of car, ODO reading, overall condition , scratch marks, tire condition, expected expenses etc... so that seller also gets convinced about it's car's weak points and may agree to your asking price. While buying pre-owned car learn about vehicle owners lifestyle as well as job / profession because the condition of vehicle is totally dependent on the person who owns it and for what purpose he is using the vehicle. Also apart from looking at the condition, ODO, Year of MFG etc... try to experience overall feel when you take test drive and how you get connected to the vehicle. Try to experience the vibes from the vehicle owner as well as from the vehicle. Some time you get some negative feeling from person who is selling or from the vehicle, avoid opting for such deal even if everything looks OK but from inside you are not feeling comfortable about the same.