How much car loan can I get       Banks provide car loans based on the income of the individual. They normally provide loan amounts that are up to 2.5- 3 times the annual salary for salaried professionals or 6 times the annual income for self-employed professionals. Apart from income, other factors that decide the maximum eligible amount are the car model, the borrower's repayment track record, other existing loans, and so on. Banks finance 90-100% of the ex-showroom price of a new car.

Car purchase finance options       Loan: One of the more famous ways of buying a car is through a car loan. In this case, the car bought through a loan is actually in the possession of the lending institution. The official term used here is 'hypothecation clause', which basically means that though you own the car, the bank/lending institution is using the car as a security against the loan taken by you. Thus, once you have cleared all the dues, this clause is removed from the agreement.

Old car or new?       For instance, if you are someone who is looking for a regular upgrade in say, every two-three years, then a second-hand car makes sense. Moreover, if this is your first car and you are trying to learn driving on it, a second-hand car definitely makes much more sense. On the other hand, if you are someone who is happy using the same vehicle for a number of years, then a new car is definitely recommended.

Document checklist for a used car       car. This is what you should be looking for: 1. Whether all the legal documents like registration certificate (RC Book), pollution under control (PUC) certificate, insurance certificate and service book are in order or not. 2. Whether the Road tax (RTO tax) has been paid or not. (These papers need to be transferred in your name) In the documents, you need to check the following:

Repaying a car loan       One of the first things you need to look at while taking a car loan is the monthly installment, popularly known as the Equated monthly installment (EMI). While different banks would give you different quotes depending upon their rules and regulations, you must compare your monthly outflow for the same amount and for the same tenure. Remember that the effective interest rate is a function of the reducing balance method being used to calculate it.

Differences between motor insurance policies       The passengers with whom your vehicle is for hire. Here, the owner of the vehicle gets an insurance cover on third party property damage only in case of an accident. In other words, if you are in an accident, the affected party can claim damages from you. The premiums generally are dependent on the cubic capacity of the car.

Insuring your new car       Renewal: The insurance policy needs to be renewed before expiry of the policy period. Any delay in insurance renewal can deprive you of the insurance benefits and also attract a penalty while renewing. Remember, it is against the law to drive an uninsured car. Moreover, if the insurance policy isn't renewed within the period of validity, the car will have to be brought to the insurance company office for inspection.

Should you go for floating rate car loan?       ICICI Bank recently announced the introduction of floating rate car loan -- a first among the banks that are very active in car loans. Floating rate option till now was available only for the longer tenure home loans. But is it a viable option for the short tenure -- 3 to 5 years -- car loans?

Negotiating a good deal for your car loan       Take all discounts in cash to be set off against your down payment and upfront fee requirements. Don?t settle for a so-called lower interest rate in lieu of discounts or car accessories. Once you have reached the limit of negotiation on cash discounts, then you can negotiate for some free car accessories.

Seven steps to negotiate the best car loan deal       The decision to buy a car is, very often, prodded by the promise of easy financing that car dealers advertise. ?Do not compromise, you can now own a Toyota Corolla for as little as Rs 10,000/ month? says an advertisement, egging on all with monthly spare money of Rs 10,000 to own the dream Toyota. The mathematics of this foxes the prospective buyer. Is it real?

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