Buying a pre-owned car is smart financial planning — you get more car for your money. But financing a used car is different from a new car loan. Here's everything you need to know.
Interest Rates for Used Car Loans
Used car loan rates are 1–3% higher than new car loans, reflecting the higher risk to the lender. Typical range: 10.5–15% in 2026 depending on car age, lender, and your CIBIL score.
LTV (Loan-to-Value) Limits
| Car Age | Max LTV |
|---|---|
| Up to 2 years | 80–85% |
| 3–5 years | 70–75% |
| 6–8 years | 60–65% |
| 8+ years | Most banks decline |
Age & Make Restrictions
Most banks finance cars up to 7–8 years old at loan end (not at purchase). Popular resale brands (Maruti, Hyundai, Honda) get higher LTV; luxury and uncommon brands face lower offers.
Certified Pre-Owned Advantage
Cars bought from manufacturer-certified pre-owned programs (Maruti True Value, Honda Auto Terrace) often qualify for better rates and occasionally for new-car-equivalent loans.