Planning to Upgrade Your Car? Use Resale Value along with a Car Loan for more funds

First, calculate the total amount of funds available for the car upgrade. Add up two components: the current car resale value and the approved Car Loan amount. Both amounts are subjective.  

• Resale Value 

Your current car’s resale value depends on several factors, such as vehicle type, model, manufacturing year, condition, and other factors. The better a car’s condition, the stronger the demand in the resale market, and the more value you are likely to get.  

You can list your car on third-party car-selling websites to get a market estimate. However, the final value will ultimately depend on the negotiation you conduct with the buyer.  

You may use the depreciation formulate to calculate the resale value.  

Resale Value = Original Cost – (Depreciation Rate x Age of Car) 
 

• Car Loan Amount

The Car Loan amount depends on your Loan eligibility.  

Income, credit score, and existing relationship with the bank are factors that greatly influence your Loan eligibility. Hence, work to build a strong borrowing profile.  

Consider the approved Loan Amount as the final figure when calculating your total available funds for the car upgrade. This amount is mentioned in your Loan agreement. Look for lenders like HDFC Bank, that offer up to 100% financing. With HDFC Bank’s Car Loan, you can find financing that works well for your eligibility and requirements.

Once you have estimated the total funds available for your car upgrade, the next step is to use them mindfully.  

It might be tempting to use your car’s resale value to make your New Car Loan down payment, but it’s often smarter to hold onto that amount for car-related expenses that you will have to cover upfront in the later stages of purchase.  

Consider using  an HDFC Bank Xpress Car Loan amount to finance the car purchase. This ensures that the bulk of the purchase cost is covered by the Loan, which you can repay systematically through EMIs. You may consider using the resale value of the car for a multitude of car accessories: 

• Car Add-Ons

Car add-ons are physical components or technical features you want to add to your new car. Since these are beyond the manufacturer's standard features, they might typically incur a separate cost. The cost depends on the type of car add-on you choose.  

• Extended Warranty

Most cars come with a warranty period that ranges for a few years. The automobile companies offer financial coverage if the car is damaged during the warranty period. Also, almost all automobile companies offer an extended warranty option at an additional cost.  

• Customised Number Plate

If you want to get a number plate that is meaningful to you, it is possible. Such a number plate is known as a special number plate and is additionally chargeable. Ensure the request complies with the state's official regulations.  

• Registration Charges 

You need to pay the registration charges for your brand-new car. This is mandatory by law. The charges may vary depending on the state of residence and car type.  

Unless you pay the registration fee, the state government will not register the vehicle, and the car will not receive a valid registration certificate. This makes it illegal to drive on public roads. 

Reasonable maintenance costs, access to modern driving technology, and enhanced safety – upgrading your car brings many advantages. When upgrading, consider determining the total funds available for it by adding up your current car's resale value and the approved New Car Loan.  

Consider using the Car Loan amount solely to finance the purchase and utilise your old car’s resale value toward related expenses. You must look for a Car Loan with easy-to-meet eligibility criteria, a hassle-free application process, and up to 100 % financing at competitive interest rates.  

Financing solutions like HDFC Bank’s Xpress Car Loan and Used Car Loan offer flexible options to support both new and pre-owned car upgrades.