Planning to buy a second-hand car? Check interest rates in these nine banks

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The Covid-19 pandemic has boosted sales of used cars as the segment recorded higher growth rate than new cars. Around 4.4 million used cars sold in the country compared to 2.7 million new passenger vehicles in FY21.

According to market experts, demand for used cars may continue in July also.

Most banks in the country offer loans for buying used vehicles. But the interest varies from bank to bank just as it does on loans to buy new cars.

So, if you are planning to take a loan to purchase an used car, it is important that you compare all the loan offers with the best repayment terms.

Public sector banks

Among public sector lenders, Canara Bank is offering the lowest interest rate on pre-owned cars. They offer used-car loans starting from 7.30%.

Bank of India (BoI) is in the second position, offering interest rate of 7.35%.

The interest rate of loans on used cars from Punjab National Bank (PNB) starts from 8.3%. Indian Overseas Bank (IOB) and Central Bank of India provides them at 8.55% and 8.6%, respectively.

Private banks

On the other hand, the lowest interest rates of used-car loans offered by private banks are comparatively higher than those offered by public sector banks.

Among private lenders, Karnataka Bank offers minimum 10% interest rate for pre-owned car loans. ICICI Bank and Karur Vysya Bank both are offering the same at an interest rate of 12%.

Dhanlaxmi Bank charges 13.18% interest on pre-owned car loans.

Tenure

HDFC Bank is offering a maximum tenure of seven years for the repayment of loans for pre-owned vehicles. Most other lenders offers a car loan tenure from three years to five years.

In most cases, interest rates on used cars are higher than that for buying new cars. The difference can be as high as 5%.

For example, in Axis Bank, interest rates of new car loans are between 8.65% to 10.90%. The bank is charging 14.40% to 16.40% interest rates in case of an old car loan.