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 discounts and offers 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, the most popular offers and discounts by leading car manufactures during this festive season are: Accessories, cash vouchers, loyalty exchange bonus, free insurance etc. In the flurry of these offers, the factors one has to consider before buying a car this festive season are:
Financial impact
Our decision to buy a car should be driven by necessity rather than the discounts on offer. Analyse the following financial impacts before buying a car.
- Understand the implication of down-payment and EMI (equated monthly installments) 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.
- 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 Dussehra and Diwali. A new car bought towards the end of the year will become previous year's model within a couple of months.
Buying such cars though less expensive at the current rate can affect the re-sale value of the car.
Analyse the discounts and check if they are useful to you
As a buyer of new car it is always better to analyse 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 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 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 offered are always extra features, which may not be essential for us.
Loyalty exchange bonus
This offer may 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.
Whether, it's festive season or not, buying a car can have a big impact on our personal finances. Buying a car during the festive season should be based on collective factors of the financial impact and whether the discount offered matches our requirement or not.
ArthaYantra provides personal finance advice online.
Disclaimer: The opinions expressed in this article are the personal views of the author. NDTV Profit is not responsible for the accuracy, completeness, suitability, or validity of any information on this article.
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