Checked out the car loans & offers still open?

Lest you forget, the festive season is still on at the car marts, with fabulous discounts and freebies on offer.

Typically, this time of the year sees banks and non-banking finance companies lure consumers with interest rate discounts of 0.25-1% on car loans, besides reduced processing fees. The dealers, on their part, outright discounts of as much as 5-15%, cash-back guarantee and freebies ranging from music systems, car covers, teflon painting and accessories.

Here’s a checklist of aspects to keep in mind.

Picking the best time
The August-December period is usually the best time to buy a car as most major festivals figure in these months.

If you are not concerned about the year of make of the car, you can also consider buying it in December as the dealers are eager to sell the inventory of last year and stock cars for the coming year. You might get a good discount of about 10-15%.

You can also look at March as this is the time when dealers have to close the accounting and they want to sell as many as possible to improve their sales figures.

Finding the best deal
Don’t forget to look up the offers to land just the bargain you need. While there are plenty of deals going, you should educate yourself and scout for the best one.

Choosing the car
First and foremost, choose the car you want to buy in keeping with your budget. This should be based on both affordability and requirement. Shortlist at least two cars in the price range you prefer.

Scouting for a loan
Check out the loan offers from different banks. Also fix the tenure of the loan. This will help you compare the various loan deals. Some banks may give you loan at a lesser interest rate but charge a high processing fee. Others may charge a little higher interest rate but may not charge processing fee at all. Calculate the effective payouts in different schemes before settling for one.

Also, sometimes dealers offer loans through banks with which they have tie-ups for loans. This may sound like a good proposition in the beginning, but you should check out the rates they are quoting and compare them with the rates in the market.

Don’t forget to check the prepayment charges. Typically, these charges are pretty high on car loans (as much as 5%).

Getting discounts/ freebies
Some dealers offer discounts and some offer freebies. The deals may vary depending on the make and model of a car. Instant discount is always the best option as it generates immediate cash flow.

Freebies can be deceptive in nature. Most of the time, the buyer does not have any idea about the price of freebies. It helps to do some research to find out the prices of the items being given as freebies. This will help you negotiate a better deal.

At the same time, see if there is an option where you can exchange freebies with cash-back or discount. In most cases, the freebies are not of high quality and you end up buying those again, e.g. stereo system in the car. So, it may be better to get some money back.

Getting a special discount
Look for special discount schemes over and above those being offered. Special discounts are given to some specific segments of people such as students, defence personnel, specific company professionals, and sometimes to women buyers. See if your company has tie-ups with banks or dealers to avail cheaper loans.

Other options
You can also check with your bank for any scheme for existing customers. If you have a good credit history, you can get a better deal from your bank.

Adhil Shetty is the CEO of Bankbazaar.com