The months of October and November witness heightened activity in auto sales in India. The car manufacturers and dealers across the country come up with various festive discounts to support the festive sentiments of consumers. Most of us delay our decision to buy a car till the festival season in order to take advantage of the offers given during this period. For example, during this festive season, Maruti Suzuki is offering accessories worth Rs. 30000 to Rs. 35000 and cash vouchers on Alto, WagonR and Estilo. Similarly, Honda is offering discounts worth Rs. 60000 on Brio, City, Civic and Accord models. These discounts include free accessories, loyalty exchange bonus and free insurance and Ford is providing free accessories worth Rs. 52000 on its Endeavour SUV model. In the flurry of these offers , the factors one has to consider before buying a car this festive season are:
Our decision to buy a car should be driven by necessity rather than the discounts on offer. Analyze the following financial impacts before buying a car.
- Understand the implication of down-payment and EMI on future cash flow if availing an auto loan.
- Don’t let any cash discounts lure you to stretch your budget and get a bigger car than the one you have set out to buy. Compare cars before hand to be cost effective.
- Buying a car will necessitate other expenses like fuel and maintenance which will increase the monthly expenses.
- Festive discounts are timed during the last three months of the year around Dusheraa and Diwali. A new car bought towards the end of the year will become previous year’s model within couple of months. Buying such cars though less expensive at the current rate can affect the re-sale value of the car.
Analyze the discounts and check if they are useful to you
As a buyer of new car it is always better to analyze how purposeful a particular discount is. Generally most of the discounts are product based. Cash discounts can be more valuable than product discounts as we may not need specific items being offered by the dealer/maker of the car. Here are some of the most popular product discounts during the festive season:-
- Insurance for Rs. 1/- It is better to check for insurance’s features than avail it just because it is close to being a free product. Most of these auto insurances that are offered as freebies are not necessarily a comprehensive product covering most aspects of vehicle damage.
- Free accessories – Free seat covers, extra navigation system, alloy wheels etc. are some of the popular offers. Accessories that are offered are always extra features which may not be essential for us.
- Loyalty exchange bonus- This can be considered only if we already own a car from the same maker and are looking to exchange for a different model or version of the same brand.
Conclusion: Whether it is festival season or not, buying a car affects our personal finance decisions. Buying a car in festive season should be based on the collective factors of the financial impact and whether the discount offered matches our requirement.
Written By Arthayantra