Before we delve into how car financing works, it is important to know what car financing exactly is. So, what is car financing? Simply put, car financing means to buy a car in the present, enjoy its experience in the present and pay for it in the future. And where do you get car finance? You get a car finance from a financial institution like a bank, credit unions or even an auto company.
So how does financing a car work? Financing a car is a rather simple process, and not as complex as its name might suggest. A financial institution lends you money to buy a car; you then buy the car that you wish to buy and then payback to the institution from where you sought to finance your car in installments. Of course, the ways in which you can finance your car are many and varied. It is upon you how you choose to finance your car by weighing the pros and cons of each way.
With car financing in India, the buyer is spoilt for choice, for he has more than 35 financers to choose from while buying his dream car. That’s not at all surprising, considering that car financing in India is a growing automobile market that has a lot of potential. So, a lot of major automobile companies have now set up their base in India, hoping to tap the emerging car financing scenario in India.
In India, the State Bank of India, Axis Bank, HDFC, etc. are some of the banks that give out auto loans. The State Bank of India recently lowered down its car finance interest rates for newly launched cars, and amongst its features is the long payment options. Reportedly, SBI also sealed a deal with General Motors for car financing in India.
This is only the general idea of how car financing works in India for there are several other financial institutions which helps a potential buyer to secure his car by procuring a suitable auto loan. It is very important, while understanding how car financing works to also take into account the various pros and cons of the method you have chosen to finance your car.
