Car Loans: Car Shopping Festival

For prospective car buyers, the festivities have truly begun. Carmakers are going all out with upgraded variants of existing models and tweaked festival special editions, like the Utsav Alto by Maruti-Suzuki, to create a little more excitement this festive season. Banks are also spicing up their car loan schemes with offers like “no processing fee” to win a bigger share of the car-financing market, at a time when the business loan segment is sluggish.

Interest rates on car loans range from a little over 9% to a tad over 11%. And while some lenders charge a flat processing fee of Rs 2,000-5,000, others levy it based on the loan value—ranging from 1% to 2.5%. Given the variance in lender charges and the rates offered, it pays for wise car buyers to hunt for better deals for their car finance. If you have already zeroed in on the car you want, you should scout around for a better financing deal from lenders for the same model.

It may happen that the lender offering the best rate has an arrangement with a dealer other than the one you visited. But that shouldn’t be much of a bother as long as the dealer is offering the same price and the festive benefits as the other. If not, negotiate to get the deal you’ve been offered by the other.

Sometimes, you might even be able to better the deal offered earlier. It is all about being a street-smart shopper. If you find that some of the benefits and add-ons that a dealer is offering are the kind you don’t much care for, ask for swapping the benefit with one you value. You’ll be surprised how often dealers will be accommodative of such requests.

Buyers looking to trade up the value chain through seconds also have reason to cheer. With the entry of several organized players into the seconds market and undertaking certification of cars, there are enough options for financing of such vehicles too. The interest rates in the segment will likely be higher, because of the higher incidental risks for the lender, but you still have affordable loans on offer given that the asking prices of vehicles in seconds are significantly discounted.

If you are looking to buy a new set of wheels, the festive season is a good time as every car-maker and lender is willing to go the extra mile to grab a larger share of the festive pie. So, what are you waiting for? It’s time to get set and vroom!

(A marketing initiative by Open Avenues)

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