Tired of haggling with auto rickshaw drivers over fares and shelling out a bomb as surge fees during traffic hours and inclement weather? Buying a car may help you get out of this rut, but you should consider several things before you take the plunge. Buying a big-ticket item like a car is a big step and you should consider opting for it only if you are ready. That’s because unlike a mobile phone or a tablet, buying a car is sort of an irreversible decision. Once you’ve made the first payment towards your car, you cannot back out.
One thing you should also note about buying a car is that is a depreciating asset. So, you won’t be able to sell the car at the same price that you bought it for. Since there’s little you can do to stop the depreciation, here are a few pointers that you should follow that will help you save a significant amount when you’re purchasing a car:
Now that you’ve arrived at the decision of buying a car, start the legwork of researching on what type of car you should buy. In order to decide this, consider factors like your lifestyle and the amount of time you spend commuting. Unless your car will be heavily used over long distances every day, it makes little sense to opt for a diesel variant. You can consult a variety of resources to dig up all the information that you will need to zero in on your dream car. Subscribe to automotive magazines, join car owner club forums, check out motor head websites for tips and comments. If you need help with a specific query or information you can always post a question on these platforms. Current owners should be able to help you with your questions.
In fact, if you know a good mechanic or a driver, you can even seek their opinion. People like them know the ins and outs of cars and will be able to give you valuable, objective information. This should help make your buying process a lot easier.
Are You Financially Prepared?
Who doesn’t want a swanky, dream on four wheels like an Audi or Porsche? But if you must give up on your necessities to own such a car, it’s best to keep your dreams more realistic. Buying a car would mean paying monthly EMIs towards repayment of your Car Loan. Before signing on the dotted line, calculate how much you would you be able to afford as EMIs vis-à-vis your net monthly income. It’s best to know from the start that this won’t be the only amount that you would paying towards your car. There will be additional charges like the running and maintenance cost of your car, parking expenses, insurance cost, and recurring expenses like the cost of fuel etc. A good way to estimate how much this will cost you every month is to check the prevailing fuel prices and calculate your weekly, monthly and yearly fuel charges.
If you’re driving in urban areas, your car is likely to consume more petrol. As a safe estimate, add 40% to your fuel budget This is because car owners end up driving much more than they accounted for.
Adding up all these costs will give you a fair idea of the total costs involved towards the upkeep of your car. If you feel comfortable with the figure, then move to the next step.
Look For Pre-Approved Loans
Once you have a fair idea of the costs involved, it’s time to start shopping for loans with the best interest rates. Instead of going door-to-door visiting banks and checking their Car Loan rates, you can visit online marketplaces like BankBazaar that round up offers from various banks based on your eligibility and preferences absolutely at no cost. If you’ve been pre-approved for a Car Loan from your bank, ensure that you pick up a letter of offer from this bank to show to other car dealers. This will help you negotiate a better deal with them as these letters are worth their weight in gold.
One thing to bear in mind here is that banks will run a credit check on you to draw up their best Car Loan offer for you. So, do not make too many applications mindlessly as this may tank your Credit Score.
Having at least more than one offer letter will give you the flexibility to land a better deal with car dealers as well as the confidence to choose the deal that works for you best.
Time Your Market Entry
The car market always has something going on or the other. Keep an eye out for sales, new launches, launch of improved versions of old models, deals, promotions etc.
In fact, if you find it difficult to keep a track of these changes, hit the market at the end of the month-this is usually the time when salespersons are trying to meet their quota for the month. You are surely likely to land a good deal around this time.
Once you have the sales contract in your hands, go through the fine print carefully. You might across several charges like add-on fees etc. Remember, you can always negotiate and not agree to pay such fees. If you encounter a pushy salesman, you can always choose to walk away. It’s better than finding yourself stuck in a raw deal. If you’re thinking of selling your old car for a new one, explore the used-car market carefully. In fact, you don’t necessarily have to sell it to the same dealer. You can sell it to another dealer, get the cash and use it to buy another car.
Once you’ve bought your new car, remember to get a good mechanic who you can trust to keep your car in good working condition.
BankBazaar.com is India’s leading online marketplace for loans and credit cards.