The Indian automotive market is experiencing a major transformation. With rising incomes and expanding job opportunities, consumers today enjoy a wide array of choices across every price bracket. Gone are the days when owning an Ambassador car signified status. With the introduction of the Maruti 800, India entered the small car era—and now, nearly every leading global automobile brand has a presence in the country.

The trend goes beyond variety. A growing number of middle-class households, especially younger buyers with disposable incomes, are eager to upgrade frequently. For many, owning more than one car is now a practical requirement rather than a luxury. This growing demand is encouraging manufacturers to launch their latest models and advanced features directly in the Indian market.

Car Buying: Making the Right Financial Move

Purchasing a car is an exciting decision, but it also demands careful financial planning. Whether you’re buying your first car or upgrading to a premium model, it’s important to choose a vehicle that fits your budget—and secure the best possible deal.

How Much Car Loan Can You Get?

Loan eligibility typically depends on your income and repayment capacity. Here’s a general guideline:

• Salaried Individuals: Can usually avail loans up to 2.5 to 3 times their annual salary.
• Self-Employed Professionals: May be eligible for up to 6 times their annual income.
• Loan Coverage: Banks generally finance 90% to 100% of the car’s ex-showroom price for new vehicles.
• Used Cars: Loans for pre-owned vehicles usually cover 80% to 90% of the car’s assessed value.

If your income alone doesn’t qualify for the loan amount you’re aiming for, you can boost your eligibility by including the income of a close family member (blood relation).

Steps to Apply for a Car Loan

Step 1: Compare Loan Offers
Start by reaching out to multiple banks and lending institutions. Collect their loan proposals and compare key details like interest rates, repayment terms, processing fees, and special discounts. Negotiating with lenders can also help you secure a better deal.

Step 2: Submit Required Documents
Once you choose a lender, their representative (usually a direct sales agent) will collect your documents. These typically include:

• Proof of income (salary slips, IT returns)
• Identity and address proof (Aadhaar, PAN, passport)
• Bank statements
• Employment details

Exact documentation requirements may vary based on the lender and applicant profile.

Step 3: Home Verification Visit
After submitting the paperwork, a field officer may visit your residence to verify the details you provided. They may confirm your living arrangements, job status, and other background information. Make sure you’re available during this visit to avoid delays or misunderstandings that could affect your loan approval.

Step 4: Loan Approval and Disbursement
If everything checks out, your loan is approved. The lender will issue the loan amount via cheque or demand draft, which is then used to complete your car purchase.

Final Steps: Signing the Paperwork

Before taking delivery of your car, a few final documents need to be signed:

• Power of Attorney: This allows the dealership to register the vehicle at the RTO on your behalf.
• Ownership Transfer (if applicable): If you’re exchanging an old car, you’ll need to sign transfer papers.

Important: Always read the documents carefully before signing. If you find any mistakes or unclear terms, don’t feel pressured to proceed. It’s better to delay the deal than regret it later.

Processing fee structure for new cars