Buying a car is an important milestone in every individual’s life. In India in particular, a car is a symbol of one’s purchasing power and social symbol. As soon as one is earning, one of the biggest assets they create is a car. You could have any reason for buying a car but most fundamentally, it will make your commute easier.
However, a car, especially a new car does not come cheap and significant finances need to be invested in its purchase. This is why buying a new car is something that must be done with great consideration and without burdening your finances.
If you are in the market for a new car, you will need to be wise enough to balance your aspirations with your finances.
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Here are some great tips for buying a new car in India with an eye on the financial considerations:
- Plan your budget
The first and most important step to take when planning to buy a new car is to determine how much money you can afford to spend. Plan a budget that will let you know if you have enough funds at hand to make a purchase at one go or if you will need to look for a suitable financing option.
Additionally, when buying a car, you will also need to factor in maintenance, insurance costs, registration fees, and fuel. If you think you can manage the purchase and maintenance of a new car without adversely hitting your regular expenses, you are ready.
- Decide the car you want
Depending on the budget you have, the next thing you need to do is decide the make and model of the car you wish to purchase. Aside from your personal choice, factors like the available funds at hand or the amount of loan you have obtained will also affect your decision.
Before you decide on any particular model, you must adequately research all the pros and cons to find the car model most suited to your requirements and also within your budget.
- Get your finances in order
Once you have decided on the car you wish to buy and settled the budget for the same, it is important to get your finances in order. If you are making the purchase with your savings, make sure you can have easy access to them to fund the purchase. However, if you are planning on taking a loan, you will not just need to find a lender but also set aside a sum for the down payment. This is because not all loans provide the complete cost of the car and you might need to supplement the same with a down payment.
- Compare car loans
If you are looking for external financing for your car purchase, you will need to choose the car loan which offers the most suitable terms for you. Compare different lenders for the lowest interest rates, flexible tenures, and foreclosure charges.
If you are only in need of a top-up to upgrade to a slightly better model of car or need to supplement your funds, you can consider financing your new car purchase with an instant personal loan from PaySense, one of India’s leading apps for quick and small loans. With just a click on your mobile or laptop, you can secure a loan without any collateral of up to Rs 5,00,000 lakhs. All you need to do is download the PaySense app, upload your documents, check your eligibility, calculate your EMI and loan tenure and get a loan for a car instantly.
- Keep in mind the total cost
Instead of getting lured by small EMIs, look at the total cost that you will end up paying with a loan with a long tenure. A longer tenure means you end up paying much more in interest as opposed to paying off higher EMIs over the short term.
- Compare pricing deals from different dealers
When you set out to purchase a new car, don’t settle with the first dealer you see. Go ahead and make visits to different dealers in your area to find which dealer is offering you the most attractive offer on the purchase. Many dealers offer reduced prices and/or service benefits on the purchase of a new car in order to lure prospective buyers. Look around the available deals and choose the one which gives you more benefits along with a great car.
- Look for hidden costs
When it comes to buying a new car, it is important that you check for any hidden costs involved with the purchase. Often, the price mentioned at the dealer may just be the base cost of the vehicle itself and may not include the registration costs, insurance costs and the costs of any accessories you may wish to install to personalize the car.
- Negotiate the price and terms
If you are purchasing a new car from a dealer, do not settle for the asking price. You can negotiate the price and terms of the purchase by asking the dealer to give you a good deal. Since the dealer will be keen to close a sale, they will give you a good deal. If you are financing your car through the dealer, a good credit score can also help you negotiate the terms and rate of interest on the loan.
- Ask for the resale value of the car
When purchasing a new car, while selling it might not be on top of your mind, it is a good idea to ask for the resale value of the car. If in the future you need to sell the car or want to upgrade to another car, the resale value of the new purchase will give you an indication of how much you can expect to gain on its sale. Cars that have better fuel efficiency and mileage, as well as a powerful engine and more service centers tend to have a higher resale value.
- Try to avoid add-on purchases
Accessories might appear to be a great idea to add-on to customize your car but they only add to the overall cost of your car purchase. Salesmen might try to get you to buy unnecessary accessories to make sales and you might not even need them. When you purchase the car, add on accessories only as necessary or if you can afford to purchase them. Remember, you can always accessorize your car later when you have additional funds so you needn’t rush into adding accessories at the time of purchase itself.
- Do not buy an extended warranty with your car
The car dealer or salesman might tempt you into buying an extended warranty with your car as an added incentive. However, you could do without it. Most extended warranties come at high costs with minimum coverage. Additionally, if you do not intend to keep the car for long and trade-in for a better model in the near future, an extended warranty will only tie you down. Unless the extended warranty also covers mechanical failures and damage costs, avoid adding the extended warranty costs to the price of your new car.
- Keep an eye on your other debts
If you are financing the purchase of your new car, make sure that you do not encumber any other loans or bills you need to pay on a regular basis. If you have high credit card bills or a home loan as well as sundry other loans, evaluate your finances to see if this additional burden of a car loan will impact your savings and expenses. Also, keep in mind to not let your debt to income ratio be very high as it will negatively hit your credit score.
- Avoid purchasing on an impulse
The most important tip for anyone looking to purchase a new car is to avoid buying on an impulse. Don’t hurry into a purchase if you do not have the funds. Buying a new car is a significant investment of your financial resources and it is therefore important that you take your time looking into all the pros and cons, into the state of your finances as well as the benefits you will get from making such a purchase.
- Test drive
If you are wondering what the test drive of a car has to do with financing it, here’s your answer. It is during the test drive that you will come to know about the car’s design, ease of operation, mileage, and overall benefits. Ask questions of the salesperson if you have any doubts and compare cars on the basis of their on-road performance. Since purchasing a car is a significant monetary investment, it is the test drive that will let you know if you are putting your money in the right place.
Here you are then. 14 best tips for any individual buying a new car in India. Pay heed to these tips and you will find yourself with the best model in the market which not only meets your aspirations but also keeps your financial security intact.
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Aahna Gandhi is an enthusiast traveller, writer and a PR Professional. She likes sharing memorable moments from her travels and inspire others to live a life full of wonder. Known for her content, she has worked for travel, technology, lifestyle, health sectors as well as finance.
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