It’s no fun buying a new car right now. Interest rates are creeping up. You have to pay an additional excise duty on bigger cars. And fuel prices are going through the roof. Right? Well, not exactly. Although the sentiment dampners are there, this could well be as good a time as any to pick up a car.
For one, although interest rates have climbed to 13-14%, depending on your debt history, banks will be willing to offer you better terms. For instance, if you have ‘preferred customer’ status with one of the big three financiers, ICICI, HDFC or Kotak, you will be able to get yourself a much better deal than what’s on offer in the market.
Also typically the bigger the car, the better the interest rates. Financiers see the big car buyers as lower risk customers so the rates dip as go along. Which means although you cough up anywhere between Rs 30,000-50,000 ex-showroom thanks to the excise hike, a bigger car will get you better EMI rates than a smaller one.
Add to that the fact that banks offer special schemes for women and many car companies will also do their bit to sweeten the pill for their customers. For instance if you already own a car from a particular brand and are ready to change the model, dealers and financiers will doubtless offer you attractive terms.
For a mass market C-seg car, for instance, the rates can be as low 11.5-12%, which is a good 2-2.5%lower than that on small cars. And then you have to factor in the discounts. Car companies, eager to push volumes to beat the sentiment slump, have upped the rebate levels substantially.
For example, B-seg models are currently fetching anywhere between Rs 25,000-45,000 in discounts. The C-seg sedans, particularly models that have been around for a while, will get you anywhere between Rs 30,000-60,000 off, sometimes even more.
Even when companies have launched facelifts or new variants, in most cases prices have remained unchanged. Which means you get better features at the same price. And in most of these cases, the dealer throws in something to make the deal sweet so you won’t drive away without some bargain tidbit.
There’s another reason why buying a car right now may be a good idea. Although financiers aren’t willing to bet on it, the buzz is that yet another interest rate increase may be right round the corner. If that happens, your loan will become even costlier. So it may be a good idea to opt for it and push for a good bargain while you are at it.
Of course there’s one very good reason why you may want to wait till the festival season. There are a slew of new launches that are lined up and those brands which don’t have a new model ont he anvil will offer mucho rebates and other attractive add-ons to make it worthwhile for you.
Traditionally that mad scramble for consumer mind space is what makes festival buying a good bargain. But this year, with the Nano debuting, the scramble will be madder. Which means the goodies on offer will be that much more for you, dear buyer.
Finally does it make better sense to go for a cash payment rather than financing your new car given the rising rates of interest? Not yet. Financiers throw in a decent amount of discount and dealers on their own will likely not be able to match the combined rebate coughed up by them, financiers and the car companies.
Already, with demand slackening, dealer margins are fairly thin. So if you have to depend only on them for your bargains, you won’t get that much. You may argue that you pay more on interest which gobbles up the rebate over the loan period. That’s true.
But chances are you would change your car before the loan runs out so you can roll your interest without paying the entire amount and get a rebate on your new car as well. Happy bargain hunting.
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