8 Lessons For Smart Car Buying: How To Get The Best Deal

Festival season is the time for reduced interest rates and zero processing fee offers. Unlike earlier, dealers these days have ties-ups with most banks and NBFCs

Get a clear idea of the market price, features, and performance, so you can make an informed decision when offers start rolling in.

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A car is one of the most aspirational purchases of one’s life. Whether it is your first car or an upgrade, it is a major milestone and requires the same meticulousness and planning that any other milestone demands. Two Diwalis ago, I upgraded my first car after 15 years of use. Here are some more lessons that got reinforced in the process of getting a new car. 

1. Start your research early. Have your options shortlisted by the time the festive season is here. Get a clear idea of the market price, features, and performance, so you can make an informed decision when offers start rolling in. Factor in costs like handling fees, insurance, and registration so you have a clear idea of what the final bill is going to look like. This gives you more power to negotiate. 

2. Test drive the car you intend to buy even if you've driven the same model before. There may be subtle changes especially in case of newer or upgraded models. Plus, a test drive ensures the car suits your driving style and comfort preferences. During the festive season, there might be rush, so schedule your test drive in advance, preferably at a time when the roads are freer.

3. Compare offers available at the dealership. Both automakers and dealerships offer special discounts, cashback schemes, and financing options during the festive season. Often, different dealers for the same brand may have different offers. Compare these offers from different dealers and brands to see which one gives you the most value for your money.

4. Evaluate any exchange offers if you have an old car. Festive seasons might bring better valuation on exchanges. Also look up government incentives or rebates for buying electric or hybrid vehicles, which could add to your savings.

5. There's always room for negotiation but be sure you are negotiating for the right things. Don't hesitate to negotiate on the price, both, purchase and resale, especially if you are armed with research about the car's market value. Check for discounted or even complimentary first-year insurance. Negotiate on the add-ons as well, as you may get them at a discounted rate or even free as part of a festive offer. At the same time, remember to opt for only those that improve your experience in very tangible way. For instance, I was offered bigger armrests with cup-holders for a fraction of the cost. But considering no one ever gets to carry any beverage other than water into my car, it is a perfectly useless add-on. Take an informed decision. Don't feel pressured to close a deal immediately just because it's presented as a limited-time offer.

6. Festival season is the time for reduced interest rates and zero processing fee offers. Unlike earlier, dealers these days have ties-ups with most banks and NBFCs. These loans are very easy to process and usually include the best deals. Nevertheless, do your own research. There’s every chance that you may find a cheaper loan or one with better terms and conditions. In any case, look at the Key Fact Sheet very carefully and make sure you understand the terms and conditions of the loan clearly. Go for the shortest tenor you can manage. Remember, your car is a depreciating asset. So keep costs low.

7. Make the right trade-off. Sometimes a slightly more expensive car might be cheaper in the long run when you consider the long-term costs of owning the car, including maintenance, fuel, and depreciation. Same goes for financing. I had two loan options: one was 10 basis points higher than the other but let me prepay after a year; the other had lower rate of interest but a prepayment penalty. The additional interest on the loan was smaller than the prepayment penalty, so I chose the higher interest rate and prepaid my loan as planned. So consider your options and choose wisely.

8. Lastly, check the delivery timelines. All those discounts translate into high demand and, very often, longer delivery days. Instead of planning your delivery around a special day during the festival season, consider making the downpayment or finalising your purchase on that day. So you always have that memory to cherish and a few delays here and there wouldn’t matter. 
Happy driving!

The author is AVP Communications at BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar.