Believe it or not but the automobile market remains the most dangerous and speculative with the combination of stingy dealers, clever finance companies(read agents), banks and misleading ads.
If you have zeroed in on your car and have some how managed the down payment the next obstacle is the finance. At every car dealer you will find numerous finance agents as well bank car finance guys who claim that they belong to x, y and z banks.
You have to be very sure whom u r talking to otherwise u r for a big and turbulent ride and purchasing a car might turn out to be a nightmare. Firstly find out how much of loan amt the finance company or bank is ready to provide. 100%(extremely rare) until and unless you are going for a car which has absolutely no takers. 95% if you can get things done in a more professional way thru the finance guy and your loan papers r very much okay. 90% which every Tom, Dick, Harry will give and you need not worry at all.
One thing which determines the loan amount is which segment car you are going for. Small segment cars have lower loan amount and higher rate of interest. After the loan comes the rate of interest.
If its a small car then the loan amount will be less and also the rate of interest very high. The smaller the car the higher it is and especially for maruti cars it?s very high(reasons only the financial institutions and car makers can explain).
The rate of interest is very important but tricky affair and you have to play quite a ball at this. Be ready for talking to every Tom Dick Harry from each and every finance company or bank. It is then that u will get the real picture of who is giving you the best loan at the best rate of interest. Keep your eyes and ears open and do not trust what they say because rate of interest in the car market r very volatile(even our share market would seem steady).
I had a bad experience here, I had almost booked a car and talked to only one finance guy who said he represented ICICI and later on I had to cancel the booking when I found out that he is from Sundaram Finance. A word of advice since ICICI does most of the car finance in the small car segment try to get the rate of interest as lower as u can.
The other banks worth giving a try are HDFC and Citibank. But at the end you will be surprised and shocked that it is here that you will be saving a lot of money because 7.9% and 7.25% are two completely diff rates and if you calculate over the tenure of 5 years you will be saving thousands. Use the loan template for checking the loan amount and the EMI’s available in MS XL sheet.
After the loan amount is approved(well no matter which dealer you have booked the car and have been talking to the finance guys from that dealer you can choose any finance company, bank. Its at your discretion, because what ever the loan amount the dealer is going to get the initial down payment.
Let?s say 10% of the ex-showroom or the invoice price plus the insurance plus the road tax plus the registration charges plus the funny dealer charges. Try to bargain because the dealer can give you a discount on the insurance, cash discount and also basic accessories. Normally for cars that do not do well as well as cars which have a good market the car company gives a discount on a lot of things.
Check out all the freebies and offers(some may be luring but turn out to be nothing major) probably from as many dealers you can find in your city. After the car has been delivered be sure that the dealer gives you all the accessories promised by the sales guy(be very particular and if possible get it in writing before you go ahead with the deal).
Also make sure that the dealer is giving you original accessories. For a meager profit the dealers can substitute the accessories for local make(first time car owners should bring along people who had previously bought a similar car or accessories). Mostly the company fitted car stereo seems to be a cassette stereo so you can exchange that for cash discount and get a CD car stereo from the market.