New Car Loan
NEED OF CAR LOAN
In has never been easier or cheaper than now to own a dream car. Owning a car, now is not a luxury but a necessary one among your other household needs. First of all you, yourself pose these questions before owning a car do I really need a car; What is my usage ; Is it in addition to a bike ; What is the budget ; Besides commuting to work and family outings, what else will I be using my car for. One should to select the car that which suits for his/her needs for present and future needs.
WHY DO YOU NEED A CAR :
You have gone up in the corporate ladder and need a car for prestige. You are in a job which demands a higher status of commuting and needs to impress clients. You travel long distances and it is tiring on a local train or bus travel and with your bike. You entertain a lot and need to either pickup or drop your friends and relatives. You have a team of colleagues when going about your job or business deals. You are now married and have a working spouse to drop off at her office. With your kids, it is not safe any longer to carry on with the bike. Look only for a car that suits your daily and family needs.
Now a days you can test a drive your choicest vehicle before you going to purchase it. With a telephonic call, the dealers and financiers will come to your door step with dangling dazzling offers. You can also choose your choice of vehicle by reviewing the performance through Auto magazines and watching T.V. Programmes exclusively made on four wheelers.
CHECK LIST FOR BUYING A CAR:
You need to know the following before you spend money to purchase a car.
i). Safety: Does the car have the latest safety features Most high-end cars have air bags. Many recent models have strengthened sides, and indicate so in their broachers. Does the car has central locking system for doors Etc.
ii). Technology: Many outdated brands have incorporated the latest technologies in their engines. Look out for those have fuel efficiency.
iii). Space: How big is your family Do you normally carry more than 5 people on work, business or picnic/kitty parties Then you need more space ;in seating as well as in the boot to carry sufficient luggage.
iv). Maintenance: If the technology is the latest, the car is bound to be almost maintenance free. One should also look into about battery. Is it one of the latest no-maintenance ones
v). Visibility: Once sit in the driving seat and check your visibility whether it okay for you or not. Is the reversing of the vehicle is strain-free or not Also check out the comfort while holding the steering as well as while changing gears.
The car that you are going to buy have a flawless finish Whether the levels between doors and body even If your spouse travels with you regularly, does he or she find it easy to get in and out through doors also Think about the elders .
CAR FINANCE:
There are a lot of branded models from Audi to Volks Wagon in the world market. One can select their car in the market, as there are ordinary passenger cars, luxury cars, omni vans and high capacity seated luxury cars.
The manufacturers, dealers and the financiers have come together to lure customers with cash discounts, free first year insurance etc. For getting finance/loan dont grab any deal coated with sugary discounts and tantalising add-ons. Read between the lines and conduct a through study of salesmen/ saleswomen, or a direct selling agent.
The financiers have spared no trick to dress up the rate of interest to make it lucrative to the customer. Ask, the
financier whether he means the flat annual rate or the reducing balance rate. The reducing balance rate will be two times the flat rate minus two. For example, at a flat rate of 9% , the reducing balance rate will be 16%. The flat rate of interest per annum that looks lower than the reducing balance rate.
Points to remember while going for a car loan.
a). Meet the financier before going to the show room.
b). Check if the rate of interest is flat
c). Compare discounts, interest rates
d). Do not in a hurry, bargain or convince the financier
e). Read the entire fine print of loan form
f). Give preference to Equated Monthly Installments (EMI)
g). Think about thoroughly the 0% interest rate offers (which burden you more)
It is advisable to go to the financiers or direct selling agents before seeing the dealer. This will help you better negotiate the deal. Most financiers and DSAs have monthly targets and so they will be more than willing to squeeze their margins and pass it on to the customer in the form of lower interest rates and EMIs towards the end of the month.
MARGIN MONEY SCHEME:
Margin Money Scheme is the most favoured since very often, this is also the cheapest. The lender/financier gives a loan of 100% but requires a deposit of 20% of the amount. The effective loan is thus is 80% of the price. The rate of interest quoted on this loan is visibly lower since the financier gets to offset the loss of interest with the money he would be making on the deposit. It could earn simple or compound interest, generally lower than the loan interest rate.
In the advance monthly installment scheme, the lender offer 100% loan but the buyer pays a certain No. of EMIs in advance. The buyer can also take a loan for a longer duration and, in many cases, at lower interest rate.
In the similar scheme the lender provides 80% loan and the buyer to bear 20% as initial payment. Now some financiers are also offering separate loan for 20% initial payment to meet the sales target.
0% INTEREST FINANCE SCHEME:
Financiers offer this 0% interest finance scheme when car manufacturers and dealers give discounts to push up sales. They reduce the price of a car a little bit for certain period and make offer open to customers at 0% interest. Checkout for rebates/discounts and then seek a favourable interest rate loan. In 0% interest finance schemes the period of EMIs are less than a year/12 months. Under 0% interest scheme the EMI amounts are high and it is advised only those who can afford, can take it.
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