Car loans – A cost effective way to buy four-wheeler

In current scenario, people basically have three main dreams -a good job, own a home and a car. Besides, the high status symbol, Car has become a sort of necessity for the individual. In past two-three years, car industry has witnessed declining sales trend in the market due to global economic slowdown. In these times, car manufacturers reduced their pace of launching new car models in the market due to reducing demand. But, now things and new car models are being launched in the market almost every second day.

Recently, Fiat launched its compact car Grand Punto, followed with the launch of Audi's new model in Indian market. Tata Motors also launched its much-awaited, world's cheapest car, Tata Nano – the Rs.one lakh car in the country. With its launch, people are finally seeing green shoots in the industry vandalised by the bygone recession.

Another highlighting aspect of the situation is the reduced price and easily accessible car loans in the market. Yes, four-wheelers these days are available at quite a low price which again has triggered off demand levels for the cars. There are many financial institutions and banks which offers a great loan schemes which help customers to fulfil their dream of owning a car. Both private and public banks are delivering loans at lower rate of interest with extended repayment tenure.

State Bank of India is offering 100 per cent loan on the cost of the booking amount, minimum documents and a minimum time of just one day. Its various schemes covers finance for one-time road tax, registration fee, insurance premium and accessories and no advance EMIs. While on the other hand private banks like HDFC and ICICI, offers finance up to 90% of the ex-showroom price of the car and flexible repayment options, ranging from 12 to 84 months. These banks also offers speedy processing - within 48 hours of applying date with attractive Interest rates and hassle-free documentation. Of course when you have car, it is mandatory for you to procure car insurance policy.

There are two types of car insurance - comprehensive and third party. Comprehensive insurance covers risk arising out of theft or damage to the vehicle, death of the driver and/or passengers in the vehicle, and damage caused by the vehicle to other people or property. Third-party insurance covers only damage caused by the vehicle to other people or property. These policies are valid for a year.