When buying a car in India, how can you find the greatest deals?
Considering purchasing a vehicle? Here’s how to obtain the greatest bargain and calculate the true cost of ownership.
With the festive season approaching, beginning with the navratras in the first week of October, there’s a line-up of about two dozen auto models set to be released, as well as an inversely intriguing discount lagniappe.
This is in addition to the recent launches of new buses such as the Tata Tiago, Toyota Innova Crysta, Hyundai Elantra, and Maruti Vitara Brezza. People are getting ready to make their big-ticket auto purchases, aided by the release of the Seventh Pay Commission and the removal of the diesel vehicle ban in Delhi.
The only stumbling block is deciding which automobile to purchase. ET Wealth partnered with CarDekho.com to bring you the top five alternatives in the three price ranges below Rs 5 lakh, Rs 5-10 lakh, and Rs 10-15 lakh to help you make the best award for your budget and needs. To compare their features and prices before settling on one, go here. Do you intend to purchase a vehicle this holiday season? Then there are the fashionable options for various budgets.
While pricing is an important element, you should also consider a number of other aspects that can help you save money when buying a car.
Calculate the true cost of electricity.
Fix a budget first, then look for buses in that price range. The cost of the car, on average, should not exceed 60 percent of your gross monthly income. So, if your monthly income is Rs. 8.4 lakh, the auto should not cost more than Rs. 5 lakh. Remember, though, that the purchase price isn’t the only amount you’ll be paying if you take out a loan.
Calculate the true cost of power, which will include the EMI amount deducted from your yearly budget and the total amount of interest owed, yearly energy bills, enrollment and road taxes, insurance decorating, and conservation expenditures.
If you’re taking out a loan, though, making a down payment is a fantastic way to minimise your EMI. Examine whether you’ll be able to shoulder the financial strain of the new expenditure.
Options for financing
However, the next great concern is how to finance it. If you’ve opted to go with a car. There are three alternatives available to you. One, if it’s a low-cost automobile and you have the funds, you can pay for it whole. In fact, financial planner Pankaaj Maalde advises against taking out a car loan. “One should not obtain a loan for the put down asset and by choice utilise the EMI to invest in something more significant,” he advises. Of course, if you plan ahead, you may save and invest for it.
For example, if you want to buy a Rs 4 lakh car in three years, you can start contributing Rs per month via Drafts in a balanced fund and, with a 12 percent return, you’ll have the required cash.
However, you obviously prefer to have the automobile sooner rather than later. Should you get it via your bank or from a dealer? “First, try to acquire a loan from your bank,” advises Umang Kumar, President of CarDekho.com and CEO and Co-Founder of Gaadi.com.
Once you’ve chosen on a loan, make a down payment of at least 20 percent to keep your EMI low. Also, make sure that the EMI does not exceed 15 percent of your annual post-tax income, and that your total loan EMIs do not surpass 35 percent of your income. While the loan period is usually five times, attempt to cut it to three or four times and repay as soon as possible because it does not provide any duty benefits. Another conundrum is deciding whether to go for’EMI in advance’ or’EMI in arrears.’ In the first case, you pay a single EMI to the bank in advance, which is deducted from the loan amount paid to the dealer. The EMI advance helps to minimise the total loan amount.
In the end, no advance EMI is paid to the bank, and the complete loan amount is given to the dealer. The former is a good choice because it lowers your EMI. Look for a reputable dealer. Savings are also determined by the quality of your dealer. So take some time to look for one.” At the very least, speak with two or three vendors.
Though they are not permitted to offer discounts beyond the OEM (original equipment manufacturer) amount, speaking with at least three dealers will allow you to negotiate for a better bargain. Also, separately negotiate with the dealer, both with and without the financing. You can frequently get a better bargain with a loan because the dealer earns a commission on it, but double-check with your bank,” Kumar advises.
Look for the following features:
The next selection is whether to purchase the base interpretation or the top-of-the-line bone. ” You should choose the advanced interpretation because there are some features that you cannot upgrade. For example, you can’t go from a manual to an automated transmission,” Kumar explains. ” However, do not jump to education based on all of the status.
You may do it down with the navigation point because most mobile phones allow that,” he says. Of course, safety measures like as airbags and rear parking detectors should be prioritised. Picking a mid-level model rather than a fully equipped one and upgrading with the features you desire on your own is a fair compromise.
While there are no insurance discounts, you can save money if you transfer your no-claim bonus from your previous vehicle to the new one. A Rs ornamentation, for example, can be reduced to the Rs with a 50 NCB. There are various ways to reduce the cost of an automobile. Time your purchase to coincide with the festive season or specific months such as December or March, when there are significant discounts.
However, keep in mind that a December purchase will reduce the resale value of your vehicle because it will be regarded older than a January or March model. You might also be able to find better rates on buses that aren’t on the waiting list, are an unusual colour, or are variants. Keep these cost-cutting strategies in mind as you move through the list of top buses in three orders in the following runners to make the season even more merry.
What is the true cost of keeping a car?
The amount you pay for a car isn’t the only expenditure you avoid. After taking into account loan interest, energy costs, conservation, insurance, and enrollment fees for a Maruti Suzuki Alto 800 over a five-year period, this is the actual amount you’ll spend.
THE VALUE OF POWER (For Maruti Suzuki Alto 800 Std)
Price of purchase
The car costs Rs2.49 lakh.
The cost of a loan
1.99 lakh rupees (80 loan at 10.5 percent for five years)
Rs 55,411 in total interest
The car costs Rs3.04 lakh in total.
The price of gasoline
Petrol costs Rs64.05 per litre (Delhi)
20.3 km/l is available.
In 5 times km, you’ve covered a distance of km.
The whole cost of energy was Rs1.89 lakh.
Road tolls/registration fees (approx)
The registration fee is Rs 10,000.
Road levies for a five-times-Rs-20,000 vehicle
Rs 30,000 in total
The average cost of a periodic is Rs 10,000.
The total cost of the five times is Rs 50,000.
The price of insurance
The average cost of insurance on a monthly basis is Rs 7,718. (PolicyBazaar)
The total cost of the five times is Rs 38,590.
Ownership costs total
Rs 6.11 lakh = Rs 3.04 lakh + Rs 1.89 lakh + Rs 30,000 + Rs 50,000 + Rs 38,590