The public's interest in private vehicles such as motorbikes and cars is very high. Seeing these opportunities, many car manufacturers are trying to be able to market their products to the fullest. Cars are included to luxury vehicles for some people of Indonesia, this is why financial institutions and financial institutions offer a credit system for purchasing cars.
Because the price of a new car is expensive, many people decide to buy a used car at a much cheaper price. Seeing these opportunities, financial institutions provide used car loan services with various attractive offers. For those of you who want to apply for used car loan, see the advantages and disadvantages that you should consider as follows:
Physical Condition of the Car
It cannot be denied that the physical conditions of used and new cars are different. The condition of the new car is definitely better than the used car. The new car has a damage warranty from the manufacturer, so if the car is broken it can be repaired immediately by the manufacturer. Unlike the used car, the condition and performance is not really good compared to the new car.
The used car interest rates imposed by banks or financial institutions are higher than the interest rates for new cars. The reason why the used car interest rates are higher than the new ones is because used cars have the higher risk of being damaged compared to new cars.
Warranty and Insurance
Used cars are more vulnerable to damage so you need insurance to cover them. Unfortunately, not all used cars have an insurance. However, if you apply for credit to a finance company such as leasing, damage to a used car with a total damage of more than 75% or even if you lose the car, it all will be covered by the leasing insurance, but not cover for a small damage. The difference with new car loans is you automatically get car insurance.
Low Selling Price
When you buy a used car from a loan, you will get a low purchase price. However, the disadvantage is that when you want to sell a used car, the price will remain low.
Cheaper Down Payment
The advantage of used car loan that you need to consider is the cheaper down payment compared to the new car. Based on Bank Indonesia regulations, the down payment for vehicles is at least 25% to 35% of the price of the vehicle.
Easy and Fast Process
The next advantage of used car loan is the administration process that is easier and faster compared to new car loan. With this fast process you can immediately use the car to meet your needs.
Despite having a large interest rate, installments of used cars are much lighter when compared to installments of new cars. The reason is because the prices of used cars tend to be cheap so that the monthly installments are also cheaper.
In order not to suffer losses when loan a used car, you should be able to use the car properly. One way is to make the car a source of business or income, for example by renting it out. Not only that, to avoid losses from used car loan you must be selective in choosing a used car with good engine conditions and good physical condition.