Driving a hard bargain on car price may be difficult this Diwali

But even in a seller's market, some tricks like selling your car instead of exchanging it, and buying a less popular colour, can help you save money

With Diwali around the corner, automakers like Maruti Suzuki, Hyundai Motor, Mahindra & Mahindra, Honda Cars, Tata Motors, and Renault are targeting customers with a variety of discounts and other benefits. Customers must try to get the best deal not just on the car but also on the car loan.
 

This Diwali the discounts are decent but not mouth-watering (see table). Ravi Bhatia, president and director, JATO Dynamics, an automotive research firm says, “It's a seller's market right now, not because the seller is being unreasonable but due to supply constraints.” If you need a car desperately, your choices are limited. Bhatia says, “Take what's available. If you have a car that works, don't rush to buy a car now. Do so after sometime, when supply normalises, better discounts become available, and sellers begin to run after customers again.”
 

Those who want specific models (for aspirational purchase) should wait till the supply-side constraints get ironed out and the car can be delivered. Choosing a slow-moving colour can get you faster delivery. So, won't it make sense to buy in 2022 and avoid a 2021 registration? Hemant Dalvi, auto expert, and director, Flashline Multi Products India says, “Diwali discounts include not just reduction in price. Sellers throw in exchange offers, accessories, free insurance, etc as well.”

Bhatia adds, “Car prices have increased 20 per cent over one-and-a-half years. This trend will continue, so customers are locking in the price by paying the booking amount.”

There are a few things you should keep in mind when trying to get the best deals.

Exchange offers: These let you dispose of your old car and get a new one. Dalvi says, “You are better off selling your old car rather than exchanging it as you can get Rs 25,000 to Rs 50,000 more by doing so.”

Colour affects price: If you aren’t keen on a certain colour, go for a not-so-popular one and ask for a discount. Metallic colours are more expensive than non-metallic ones. Dalvi says, “The difference between a metallic-colour and a non-metallic car can be Rs 5000 to Rs 20,000.”

Resale value: A car that gives you a better resale value will reduce the cost of your next purchase. Some car companies and models can fetch 60-70 per cent of their original price, others less than 50 per cent (after, say, three years). Dalvi says, “Avoid black as it has the lowest resale value.”

Don't settle for freebies such as free mats and car cover. Dalvi says. “Ask for free insurance.” And approach multiple dealers to get the best deal.

Try to minimise cost of loan
 

Getting a good deal on a car also requires getting a good deal on the car loan. Adhil Shetty, chief executive officer (CEO) Bankbazaar.com says, “Talk to the bank where you have a pre-existing relationship. Getting the loan sanctioned may be easier there. Better still, look at online portals and decide on a loan that is the least expensive and which you are likely to be eligible for.”

The dealer, too, will offer you a loan through a tie-up with a financier. While this is fast and convenient, it could be expensive.  Dalvi says, “Dealers usually get a commission of around 4.5 per cent on such loans.” This adds to your cost. If you still prefer
taking the dealer’s loans, ask for a hefty discount, or a free accessory such as a car stereo.

To reduce the cost of your loan, ask the lender for a waiver on the processing fee. If you have a good credit score, ask for a better interest rate. Check the fine-print regarding pre-payment, which can reduce the cost of the loan. Shetty says, “Look for a loan that allows you to make part prepayments without penalties.”
 

Remember, interest rates vary on different car models (even from the same bank). Finally, choose the shortest loan tenure you can afford to keep your total cost low.