New Delhi, June 30 -- Buying a second-hand vehicle may look like a budget-friendly choice, but financing it can make a big difference to the final cost you end up paying. Financing accounted for nearly 60% of all transactions on platforms such as Spinny, according to an Autocar-Spinny used car study this year.

The study also found that in the last five years, the use of financing in the pre-owned car segment has doubled from 16% to 32% due to easier access. Lenders treat used cars as depreciating, higher-risk assets, so in used-car loans, they price that risk through higher interest rates, tighter loan-to-value ratios, shorter tenures, and stricter eligibility criteria than they would for a new-car loan. Mint spoke to borrowers, dealers ...