Buying a new car? Points to evaluate…
I recently went through the experience of researching for new car and I thought I should share it with our readers so that they can benefit from it as well!
Choosing a brand new car without proper planning could place you in a fix – as this is a decision with which you’ve to stick for at least next 4-6 years. It starts with determining your income profile, price affordability, features of a car, negotiation with the car dealer and payment mode options.
Do you actually need a car?
First and foremost, ask yourself whether you need a car? This question will get you a reply in terms of your income profile and affordability range to buy a new car. Evaluate whether your traveling needs can be fulfilled by use of public transport accessible in your locality.
Also, evaluate whether you need a car for daily travel or only for weekend leisure trip purposes. If you need your car for daily travel, you might just want to opt for a car with higher fuel economy and different fuel options such as diesel or CNG, rather than expensive petrol.
Lastly, if you’re convinced that you are buying a new car, it is implied that your income profile is equal to or higher than the mid-income range – and that, you wish to ride to your destination in the comforts of a private car over readily available public transportation.
Evaluate the Car needs
Now that you’re sure to go for a new car, evaluate which type of vehicle you would like to buy – a compact car, a sedan or a SUV? Your income profile and affordability aspects will again come into play over here, along with your preference and liking for a particular class of four-wheeler.
Remember, giving your preference a priority over the affordability would be like stretching your legs beyond the length of the coverlet. For example, you walk into a Hyundai showroom with intent to buy a Santro car; but get carried away by the looks & features of i20 model; you straightaway get overboard by 2-3 lakhs over your budget range.
Choose a Car & its Features
Now that you’ve evaluated your car need, step forward to choose a new car from various models available with different car-makers, fit within your price range.
Take, for instance, your target price range for a new car is Rs. 4 lakhs. First, evaluate which automakers manufacture cars in the range of Rs. 3.50 lakhs to Rs. 4.50 lakhs. Make a list of such four-wheeler vehicles, screen them according to your needs & preferences and compare the short-list based on feature and value proposition offered by each of them.
For example, cars that cost around Rs. 4 lakhs are Hyundai’s Santro and i10, Maruti’s Alto K10, Zen Estilo & Wagon R and Chevrolet’s Spark amongst others. Engines of all these cars range between 1000cc to 1100cc.
On further evaluation, you realize that Alto K10, which costs around Rs. 3.40 lakhs, is a low structured car in terms of height. If you’ve elders in your house with knee problems, you might want to go for a higher seat arrangement vehicle.
Among higher seat arrangement vehicles, Hyundai’s Santro Xing would cost you around Rs.3.70 lakhs, whereas i10 would cost in Rs.4.10 lakh range from the South Korean company.
While Maruti’s Wagon R would ask you for nothing less than Rs. 4.50 lakh, Zen Estilo can be bought at around Rs. 3.90 lakhs. Most of these on-road Mumbai prices are arrived at by clubbing various discount schemes; along with comfort features such as air-conditioning, power steering and front-door power windows.
Thus, now you’ve various choices to make your decision as to which type of car suits the most, based on your income, affordability and the value that each car provides suited to your lifestyle. If your budget is Rs.2 lakhs only, than Tata’s Nano is the only available option for you at this juncture, in India.
Wait for the Discount Melas
Never forget to ask for discounts and bonuses while buying a new car. Most car-makers offer special discounts and loyalty and exchange bonuses to the prospective customer, on purchase of a new car. Often, such rebates sum up to Rs. 25-40 thousand of savings.
For instance, most car dealers in India try to woo customers by offering special festival (Diwali) discounts to match consumer aspirations. Moreover, year-end discounts are also lined up by auto dealers during December to clear-up their old inventories. Infact, December is sometimes the best month to buy as people want engine manufacturing date of new year (for resale purposes). During these times, heavy discounts are offered by dealers & car manufacturers.
If such festive occasions are stacked up in near-term horizon, it makes sense to wait for another couple of months to avail of such clearance sales. While some companies offer free insurance along with the new car, others might be offering extended period warranties on a new car. You just need to ask for these freebies!
Payment Mode options
Payment mode is the most important decision you’ve to take with regard to your car, from the financial standpoint. Buying cars on loans is the latest trend in the market. But, remember, where money is involved, trend is not what you should be following, but your financial well-being that ought to dictate your decision making process.
If you have idle reserves in your savings bank account, there is no better mode of payment than cash payment. Loans, or even short tenure subsidized loans, are always going to be extra burden on your principle amount.
In case, you still have to take loan, ensure that you accept the best offer from the financial institution that charges lower interest rate and least pre-payment penalty.
So, are you ready for your long drive?