Now that the festival season is upon us, buyers are being bombed with messages of sales, discounts, cash-backs and so on. Mouth-watering deals are there for taking both online and offline. In such a heady atmosphere, it is easy to make rash buying decisions that you might repent later. Remember this saying: If a product costs Rs 20,000 and it is being offered at Rs 15,000, you don't save Rs 5,000 by buying it. Instead you spend Rs 15,000. So, ensure you get the bang for your buck.
With the real estate market in the country caught in a downturn, offers are available all year round. The offers made during the festival season might not be substantially different from those made during other times, say experts. "Developers have been offering good deals to customers for quite some time now. There is not much more that they can offer during the festival season," says Ashutosh Limaye, national director-research, JLL India. He advises buyers to be decisive. "If a particular project meets your requirements, arrive at a decision early and conclude the deal. Developers make their best offers to customers who they feel are committed, and not to those who they think are just fishing around," he adds.
As far as possible, go for cash discounts. The level of discount will vary, depending on how well a developer's project is selling, and how badly he needs your money.
If you opt for gifts in kind, such as a free modular kitchen or free furniture, you might end up with something that you neither like nor want. "If the gift in kind is not to your liking, try to get that offer converted into a cash discount," says Limaye. In-kind offers work out better for the developer. He might buy a modular kitchen unit, which costs Rs 1.5 lakh in the market, for Rs 1 lakh only, by making bulk purchases. But, when he gives it to you, he will claim to be giving you an offer worth Rs 1.5 lakh.
Finally, don't let the proverbial tail (the offer) wag the dog (the product). "Real estate is an important, long-term and big-ticket purchase. Buyers should above all focus on the quality of the product on offer - the location, the developer you are buying from and his track record of timely delivery, and the project's specifications. The offer per se should not be his primary criterion of selection," says Sunil Mishra, chief business officer, PropTiger.
Five kinds of offers are currently available in the consumer durables segment: Extended warranty, on-the-spot free gift, lucky draw, financial offers (lower down payment, interest-free EMI, etc), and cash back on credit and debit cards. "Go for offers that give you instant gratification instead of those that give you deferred benefits," says HS Bhatia, managing director, surpluss.in.
Price discounts and cash backs fall in the former category. The advantage of such offers is that they expand your budget. If you spend Rs 50,000 using your credit card, and it gives you cash back of 2.5 per cent, you can spend another Rs 1,250 right away.
When buying a consumer durable, focus on the product first. Learn about the latest technology available, and also compare product features and specifications. Thereafter, focus on the overall offer: Price, discounts, warranty and service quality. Next, the customer should select a trustworthy brand. Do a lot of online research before you step out to make the purchase. If you ask the dealer for his opinion, he might nudge you towards products that he wants to get rid of.
Nowadays, both the brand and large dealers make their own offers. The same holds true for online retailers. "Sometimes the dealer might give you his offer but omit to give you the one from the brand. Make sure that you bag both," says Bhatia.
According to experts, you shouldn't buy a car just because the offer on it is great. First, take into account your budget, then decide on the type of car you need - hatchback, sedan, MUV, etc. Next, compare the specifications of the cars that meet these criteria. Thereafter, decide whether you need a petrol or diesel vehicle, manual or automatic gear, and so on. Once you have decided on the car, try to take advantage of the deals available. In the automobile sector, good deals are available not only during the festival season but also at the end of the year, when dealers are trying to get rid of old inventory. In fact, end-of-year discounts tend to be higher.
A wide variety of offers is available currently: Free one-year insurance, cash back, exchange bonus, gold coin, corporate discount, loyalty bonus, cheap loan, complimentary warranty for extended periods, and so on. When evaluating different offers, take two things into consideration. "What should matter to buyers is the final on-road price. Also, look not only at the cash discount but at the net benefit from different offers.
Buyers can do so by putting a monetary value against each offer," says Vikrant Verma, business head-new car dealers, GirnarSoft (parent company of CarDekho.com). Offers like one-year free insurance, attractive rate of interest on the car loan, and so on also have a monetary value which should be factored in when making the buying decision.
THE HIDDEN CATCH IN OFFERS
- In a subvention scheme, if the developer misses out on an EMI, your credit score gets hurt. | Ensure EMI holiday is until possession and not for a limited period
- A free car with a house is usually hogwash. The price is bundled into the cost of the house
- If offered a price discount, compare the developer's final price with those being offered in the secondary market
- Sub-standard material could be used in free modular kitchen and interiors
- Products from top brands last for five-seven years, hence, raising the warranty from one year to two is not such a great benefit
- Lucky draws are done by the companies themselves. There is no guarantee of fairness
- In the case of interest-free EMI scheme, be wary about the price charged, down payment demanded, and whether one EMI is taken in advance