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Car buying `interest`ing now: Indian Express
New Delhi, June 22: Buying a car is no longer a problem as most of the banks are offering up to 90% financing which can be availed at an interest rate varying between 9 to 12%
New Delhi, June 22: Buying a car is no longer a problem as most of the banks are offering up to 90% financing which can be availed at an interest rate varying between 9 to 12%
After a brief spurt in April and May, the automobile market is down once again. But with spirits down but hotting competition, car companies are now offering deals on interest rates and this may just be an opportune time for you to buy a car that you have been dreaming about. These days any car can be parked in your portico just by paying merely 10 per cent of its price. Financing is no longer a problem as most of the banks these days are offering up to 90 per cent financing which can be availed at an interest rate varying between 9 to 12 per cent. You can even negotiate for a lower interest rate by going for bigger size of financing.
To get the best deal for your car, its important for you to make sure that you get the lowest interest rate with a suitable tenure for loan repayment. The earnest monthly installment (EMI) that works out for you should be comfortable to your pocket and sustainable in the long term. One should also clarify whether the loan is in advance or in arrears.
The offer of range of deals and discounts are truly bewildering these days. However, the catch lies in the cash discounts. These discounts are given by the dealers who give up their commission or by manufacturers who give incentives to dealers for selling more cars.
Even financiers give incentives to dealers for financing their loan and one should also check the percentage of this discount before making any purchase.
While the usual interest rate is around 12 per cent for most cars now, some dealers do not give customers the full up-front discount, but adjust this to get a lower interest rate.
For instance, at Rana Motors, Maruti 800 Deluxe is available for Rs 2.39 lakh and dealer discount is only Rs 1,000. After getting Rs 2 lakh financed, you can get further discount of Rs 7,000 while the loan can be repaid within three to four years at an interest rate of 11 per cent. However, if you decide to forego this discount, the rate of interest can go further down to 10 per cent.
At Hyundai Hans, all the five variants of Santro can be bought with 4 per cent overall discount on the cost of car. On 85-90 per cent financing, the standard applicable rate of interest is 11 per cent on reducing balance but if you forego the upfront cash discount, the rate of interest can be as low as 9 per cent.
Take the case of C-segment Maruti Esteem. The Esteem LX with a basic price tag of Rs 4.66 lakh at Gautam Motors carries Rs 15,000 discount. If you take a loan of Rs 3.5 lakh for this car with a repayment option of three years, the interest rate works out at 10 per cent while foregoing the discount can fetch you interest rate as low as 8.5 per cent for the same amount of loan.
Ford’s Ikon can also be bought at a heavy discount. Harpreet Ford is giving 4 per cent upfront discount on per lakh loan.
On 85 per cent financing, the applicable rate of interest is 11.5 per cent on reducing balance. This goes further down to 9-10 per cent if no cash discount is taken at the time of purchase. The dealer at the moment is also giving free insurance on 1.6 litre petrol Ford Ikon.
At the same time, high priced cars costing between Rs 13 lakh to Rs 17 lakh like Hyundai Sonata, Ford Mondeo or Honda Accord are straight away available at 9 per cent interest rate. This can be lowered downed further to 8.5 per cent by negotiating on the discount and the amount of loan financed. Most of the dealers say that when customers go for bigger amount of loan financing, say Rs 10-12 lakh or more, they automatically command higher credibility in the market.
Several auto companies, like Fiat and even Maruti allow you to pre-pay loan after a minimum period of six months. For this, you pay the balance off in one go, and around 2 per cent interest on each lakh that’s left on the principal loan.
The offer of range of deals and discounts are truly bewildering these days. However, the catch lies in the cash discounts. These discounts are given by the dealers who give up their commission or by manufacturers who give incentives to dealers for selling more cars.
Even financiers give incentives to dealers for financing their loan and one should also check the percentage of this discount before making any purchase.
While the usual interest rate is around 12 per cent for most cars now, some dealers do not give customers the full up-front discount, but adjust this to get a lower interest rate.
For instance, at Rana Motors, Maruti 800 Deluxe is available for Rs 2.39 lakh and dealer discount is only Rs 1,000. After getting Rs 2 lakh financed, you can get further discount of Rs 7,000 while the loan can be repaid within three to four years at an interest rate of 11 per cent. However, if you decide to forego this discount, the rate of interest can go further down to 10 per cent.
At Hyundai Hans, all the five variants of Santro can be bought with 4 per cent overall discount on the cost of car. On 85-90 per cent financing, the standard applicable rate of interest is 11 per cent on reducing balance but if you forego the upfront cash discount, the rate of interest can be as low as 9 per cent.
Take the case of C-segment Maruti Esteem. The Esteem LX with a basic price tag of Rs 4.66 lakh at Gautam Motors carries Rs 15,000 discount. If you take a loan of Rs 3.5 lakh for this car with a repayment option of three years, the interest rate works out at 10 per cent while foregoing the discount can fetch you interest rate as low as 8.5 per cent for the same amount of loan.
Ford’s Ikon can also be bought at a heavy discount. Harpreet Ford is giving 4 per cent upfront discount on per lakh loan.
On 85 per cent financing, the applicable rate of interest is 11.5 per cent on reducing balance. This goes further down to 9-10 per cent if no cash discount is taken at the time of purchase. The dealer at the moment is also giving free insurance on 1.6 litre petrol Ford Ikon.
At the same time, high priced cars costing between Rs 13 lakh to Rs 17 lakh like Hyundai Sonata, Ford Mondeo or Honda Accord are straight away available at 9 per cent interest rate. This can be lowered downed further to 8.5 per cent by negotiating on the discount and the amount of loan financed. Most of the dealers say that when customers go for bigger amount of loan financing, say Rs 10-12 lakh or more, they automatically command higher credibility in the market.
Several auto companies, like Fiat and even Maruti allow you to pre-pay loan after a minimum period of six months. For this, you pay the balance off in one go, and around 2 per cent interest on each lakh that’s left on the principal loan.