Bangalore: Opting for the best car loan in the market has become easier these days, reports Vidyalaxmi of the ET Bureau. Going for the best option is tricky though. Still, the procedure to achieve this has been made easier.

Car loan advertisements are not wrong when they say that they offer loans at lesser interest rates. Still, one cannot entirely depend on these. Many banks have tied up with car manufactures to provide people with better options. Hyundai had offered an interest rate of 5.99 percent as a promotional scheme. Nissan India gives auto loans at an interest rate of 5.98 percent. Last year, IndusInd Bank tied-up with Toyota Kirloskar Motor to provide financial aid to their potential customers. Tata Motors has a tie-up with SBI to provide car loans. It is sometimes better to avail such offers as these are given at lower interest rates than banks. Car loans are usually given at 11 percent or 13 percent interest rates.

Banwari Lal Sharma, AVP of Marketing at Car-Wale Automotive Exchange, says, "Typically, car manufacturers collaborate with financiers to come up with a custom offer on one or all the cars they have in the portfolio. Both the car manufacturer and finance company go the extra mile to make the deal sweet. This way, these deals are normally cheaper than the generic auto loan schemes offered by the banks. The availability and sweetness of these schemes depend on how badly a car manufacturer is looking to do sales. With a slow market like today, there are plenty of such deals even on fast-moving cars."

Still, one cannot decide on the rate of interest alone. One also needs to evaluate other categories like EMIs (Equated Monthly Installments) before deciding for a car loan.  Ashok Khanna, Senior Executive VP and Business Head of Vehicle Loans at HDFC Bank, says, "The bank specifies the rack rate on which it would propose to lend. The dealer has the option of ploughing back his commission, thereby reducing the interest burden for the customer. The decision on the extent of commission to be ploughed back rests with the dealer. Manufacturers also provide subventions, from time to time, to ensure stock liquidation, and these may also be passed on to the customer to reduce his effective interest burden. However, the bank would continue to maintain its lending rate."