Getting the best deal for your Car Loans
Buying a new car is a major stepping stone for most of us. However, sentimental values aside, the whole process of buying a car, right from deciding on a model to taking delivery, can sometimes be overwhelmingly stressful. Apart from the rather inane issues involved, such as the colour of the car, accessories etc, there are more serious aspects that need to be looked into more carefully. Sorting out finances, insurance, taxes, and getting a good (if not the best) deal from the cut-throat dealers add to the whole ordeal. Having a few car-buying tips and techniques up your sleeves may not hurt. Here are some that might be of help you in your hour of need.
Car Finance
Thanks to the wide presence of various public as well as private sector banks in India, financing a car has become much easier and trouble-free. Since the coming of age of organised and institutional auto finance in India, companies are offering auto loans at surprisingly competitive rates. Additionally, these products are rightly customised with novel service offerings and subsidies.
Finding the best car loan that works for you is rather easy. Naturally, you should be inclined towards a loan that provides the lowest rate of interest and extended loan tenure. However, do not make a decision solely based on the EMI amounts; also consider how much is entirely forfeited by you in the total loan-term.
Banks can reimburse up to 90 per cent of the rate of the new car you are buying. It is a known fact that public sector banks provide lower interest rates compared to the non-banking funding firms, but paperwork can be tedious and some may even ask for a co-guarantor. And they will definitely take longer for loan processing. Also, nowadays, interest rate and loan eligibility is based on your CIBIL score – the higher the better. You can check your CIBIL score by applying to them at: Cibil Score
Another factor, which should be taken into account is the pre-payment penalty clause, should one decide to close the loan account earlier. Check this out online. There are many websites that allow you to compare the interest rates, processing fee and pre-payment penalties. It is also critical that you work out the EMI details carefully before signing the loan documents. You should know that the down payment you make at the time of your car purchase determines the EMIs that you would be paying every month. Lesser the down payment, higher the EMIs! You can choose the mode of payment – ECS, PDCs, or DD, depending on your convenience.
Car Insurance
Auto insurance in India is a legal necessity. Car insurance protects you against losses incurred in case of accidents. The car insurance covers against theft, financial loss caused by accidents and any subsequent liabilities. Getting car insurance is quite easy as most insurance companies have tie-ups with car dealers and leading manufacturers. These companies offer coverage immediately after you buy the car. There are many other general insurance companies which also offer motor insurance service to customers.
Additionally, you can also research and take tips from websites that give you a critical insight into choosing the best insurance policy for your vehicle. Again, you will find many websites, which allow you to compare rates.
Check if the insurance company selected offers “cashless” claims, where you don’t have to pay any money upfront normally. Also, some insurance companies will offer you a lower premium if you are willing to pay the first Rs 2,000-5,000 of the claim amount from your pocket. Most public sector companies offer lower premiums but some of the newer private insurance companies have been quite aggressive in their premium quotes. However, check the fine print before deciding your insurance provider.
Dealing with the Dealers
Many people consider bargaining with a car dealer a naive thing. But it is totally possible to save a good amount by taking the time to research the price and offers on a particular model. Some determination to haggle also helps! Make use of the internet to locate dealers in your area and find out who has what on their offers’ list. Being well-informed will put you in a better bargaining position than the dealer.
Typically, most dealers will give you the best deal at the time of booking the car. Even for newly launched cars, you can get free minor accessories
Buying a new car towards the end or the beginning of a year is the best time. Usually, dealers inflate the discounts during these times to get rid of the previous years’ models. Some of the areas where you can bargain effectively are accessories, extended warranty and insurance. Remember, you can always get good discounts on loans and the insurance premium, besides the vehicle itself, if you do your homework.In that case, do not ask for exaggerated discounts, as that may discourage the dealer to move further ahead with the deal.
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