Buying a car is a decision that many people eventually consider. This is especially true for those who find the local commute to be a frustrating challenge to undertake. Generally speaking, it is also because cars provide so much utility to a given person. However, buying a car is not a simple thing to do given that they are expensive and require a lot of financial planning. This is where companies that offer 2nd hand car financing in the Philippines such as Asialink Finance Corporation, can help because they provide financial solutions and instruments that help people.
Given the increasing prices of brand new cars in the market, whether it’s due to inflation or new tax policies, 2nd hand cars are becoming the better option. Knowing why they are better can help you make better investment decisions in the future. That being said, here is what you need to know.
Loan providers compete for low-interest rates
Both banks and finance companies can provide varying terms for 2nd hand car financing in the Philippines. For example, the interest rates that banks offer on one to four-year loan terms are usually around .93% to 2%. In contrast, non-banks such as finance companies that offer one to three-year loan terms are around 1.25% to 1.30%.
This kind of set-up benefits you because it provides you with choices. There is usually an optimal choice amongst a given set. Typically, the difference-maker is the processing time and leniency when it comes to the approval of your loan application. Asking around can be your best bet to find out which option offers the fastest processing time or which is the most lenient.
Important requirements you need for a 2nd hand car loan
Here are some of the most common and important requirements you would need to apply for 2nd hand car financing in the Philippines.
Copy of OR/CR and Deed of Sale
The three documents are necessary because it proves the identity of the actual owner of the property along with all the other necessary information regarding legalities and obligations. While the deed of sale isn’t signed until both parties in the transaction are satisfied, a draft needs to be presented to verify that the transaction is legal and done in good faith.
The last thing loan providers would want to do is to finance an illegal transaction or any other type of complicated deal.
Proof of Downpayment
The next requirement you would need is proof of downpayment. A downpayment is usually (but not always) required when it comes to loans. If your chosen loan requires one, you would have to provide sufficient evidence that you can pay for it.
This usually comes in the form of bank statements and/or money market accounts. If these show or contain enough money to cover the down payment, you should be good. But sometimes, loan providers require that you also have enough to pay for the first few months of installments.
To be on the safe side, it is best if you save enough money to pay for the down payment as well as the first few months of payment. This should make you more credible in terms of financial capability and would improve your chances of getting approved for a loan.
Documented Proof of Income
Aside from your proof of downpayment, you should also prepare a documented proof of income. There are many ways to do this, but one of the most common methods is by crafting a letter.
This letter summarizes your history of employment and income, and can be written by you, your employer, accountant, or even a social worker depending on your circumstances.
It would be best if you included your basic income information such as your average work week hours, yearly salary or daily wage, and how you foresee this income will be sustained in the future.
By preparing a comprehensive proof of income, you consolidate your position as a financially capable applicant.
Proof of TIN
No transaction is complete without taxes and the government being involved, which is why a proof TIN is also required. Your taxpayer identification number proves that you are part of the government’s system and guarantees that you will be taxed the right amount.
A 2nd hand car is useful for many people
Another reason why a 2nd hand car is an attractive proposition is that there are many situations and circumstances where it can be better than buying a brand new car. Given that pre-loved cars are more affordable, it can become an avenue for savings and is generally considered to be a safer investment option.
First-time car owners
First-time car owners have a lot to gain from starting out with a 2nd hand car because many first-time car owners lack experience. Whether it’s getting used to the Philippine traffic or confusing road regulations, it is generally better to utilize a 2nd hand car if you are still trying to build your confidence and proficiency in driving.
For example, if you get into an accident, then the cost for replacement parts and servicing will be relatively cheaper. Aside from that, many older car models lack the modern comfort features that most vehicles have today such as a backup camera, bumper sensors, and built-in navigational systems. If you become used to driving without the aforementioned features, you end-up becoming more skilled at driving itself — eventually making you worthy of a brand new car when the time comes.
Prospective second car owners
If you already have a car, there are also merits that come with having a 2nd vehicle. Most motorists are already well-acquainted with the Philippines’ hectic traffic and its accompanying Unified Vehicular Volume Reduction Program or the number/coding system. While it is a government program that helps reduce the volume of cars on the road, it can sometimes be the cause of headaches. There will always be one day of the week where you won’t be able to use your vehicle to get to work, school, or otherwise travel, which can feel somewhat disruptive.
If you cannot afford to let that happen, a 2nd car will virtually make you immune to the color-coding system and stops it from disrupting the flow of your week.
People on a budget
As 2nd hand cars are affordable, people who are on a budget would benefit from securing one. This can be considered as the most practical benefit of buying a pre-loved car.
Another understated benefit when it comes to cost is the low depreciation rate. To put simply, the previous owner of the car has taken the largest depreciation hit because the car has lost 20% to 30% of its value as soon as it was bought off the dealership. After the first three years of owning the car, it may have depreciated further by up to 50%. This means the second owner gets to enjoy a low cost-to-resale ratio.
One way you can recoup your initial investment is by maintaining the 2nd hand car properly and customizing it. By doing this you can even sell it for higher than you bought it for.
Last but not least, it costs less to insure a used car than a new car. Car insurance providers take a vehicle’s age and market value into consideration when computing insurance premiums. The higher the value of a car, the more expensive it is to repair the unit after an accident.
All these things make for a great investment, so you should check your options in terms of 2nd hand car financing in the Philippines.
Businessmen and other enterprising individuals can also benefit from acquiring a 2nd hand vehicle. This applies most to those who are interested in or are already operating a transportation network vehicle service or school service type of business.
By using a 2nd hand vehicle, businessmen get to enjoy some of the previously listed benefits and get to add another unit in their enterprise.
Get the best terms for financing a 2nd hand car in the Philippines with Asialink Finance Corporation!
Now that you understand how valuable a 2nd hand car can be, what better way for you to secure an online loan in the Philippines than with the help of Asialink Finance Corporation!
With Asialink Finance Corporation, not only do you get the best terms and conditions for 2nd hand car financing in the Philippines, but you also have access to many different types of financing and loans from various collateral loans to business, seaman’s and OFW loans.
Our competitive interest rates coupled with fast processing times prove that our company is poised to serve a larger share of the market while continuing to help our core clients in the unbanked and underserved sector. This also supports our vision of being a key driver of economic growth by providing inclusive financial access.