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How to get the best deal on a car this Diwali and make sure it runs well

Here are some tips to get a better deal over and above the Diwali discount.

Diwali the season of light and joy also brings with it discounts on everything, ranging from a Rs. 500 rupee selfie-stick to a car that costs lakhs. Here are some tips to get a better deal over and above the Diwali discount:

Approach your bank

An industry estimate says that around 80% of the cars are bought with the help of a Car Loan. Car dealers and showrooms have made it really easy to not only buy a car but get a loan as well by having a loan agent present in their premise. The dealers are mostly able to offer car loans through pre-existing tie-ups and earn a 1-2 percent commission on the loans. 

Approaching one’s bank or checking deals at a loan portal might assist one to get a better offer on the loan, due to pre-existing relationship with the bank, and will make loan processing easier and quicker. If one is still opting to go ahead with the dealer’s loans, it makes sense to ask them to throw in some more discounts or free accessories. Comparing rates with other lenders may help one get a competitive quote.

It’s always better to go for the fixed rate option, unless the floating-fix rate gap is around 200-300 basis points. Since, there’ a prepayment fee of up to 4 percent for many lenders, chances of one pre-paying the loan, just in case the rates go down are slim to none. It is best to go for lenders who don’t charge a pre-payment fee at all. 

Fixed over Floating

It’s always better to go for the fixed rate option, unless the floating-fix rate gap is around 200-300 basis points. Since, there’ a prepayment fee of up to 4 percent for many lenders, chances of one pre-paying the loan, just in case the rates go down are slim to none. It is best to go for lenders who don’t charge a pre-payment fee at all. 

Use Tact

Festival seasons may be pouring discounts for customers, but car loan agents and dealers have huge targets to meet. With target pressure hovering on their heads, a customer has the upper hand. Make sure to negotiate hard for a better deal, over and above the discount offered, such as an unexpected waiver on the loan processing fee or extra freebies from dealers.

Four years or less:  Ensure to have a loan tenor of not more than 4 years. Many lenders offer a seven-year tenure, but that makes the car purchase too expensive as one pays a lot in interest. A shorter tenor also helps get a better resale value in case one decides to sell the car.

Better price

Choosing the non-popular colour can give one a good discount. Metallic colours are more expensive than non-metallic ones.

Always be ready to walk out the door

Car dealers will create a sense of urgency, convincing one to sign the dotted line, immediately. Willingness to get up and walk has real power. One shouldn’t budge until a favourable deal is struck as there are other dealers who will offer a better deal. 

Most important thing

Buying a car is easy. It’s the maintenance which breaks the back. For the first year or two, one will get free service and many parts are covered under warranty. It is prudent to start collecting a maintenance fund as an SIP every month in a debt mutual fund, the minute one buys a car, so that in a year or two one has enough corpus collected to service it regularly. 

The amount one needs to set aside will really depend upon the car, but Rs 1000-2000 a month is a good start. This is not an emergency fund or for unexpected repairs but for maintenance which happens in an expected timeframe, usually twice in a year. 


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