Buying a car can be exciting, especially if it’s your first. You have probably watched many of your friends enjoy the fruits of their labour and owning your car has been one of those medium-term targets you set for yourself. With the ring of festivity round the corner, make this festive season grander by buying a car. Har Dil karo Roshan!
But be warned; there are many things to consider before you put up your hard-earned money. The most important piece of advice anyone can give or receive is “don’t rush it!” Once the deal is finalised, it cannot be undone – at least not without considerable loss to you.
You do not need to be a car expert; it is simply about common sense. So here are ten things to keep in mind while planning to buy your dream car.
- Identify your needs
It may be tempting to buy the same flashy model your boss drives, but if you or your spouse is mostly doing school runs and other mundane activities, it is better to be practical. Here are a few things to consider that will help you narrow down your list:
- Seating capacity (both, now and a few years later)
- Safety features
- Parking space
- Boot/luggage space
- Fuel efficiency
Once your list is ready, research the following to figure out which car best suits your budget and needs:
- Price
- Reliability
- Safety record
- Features
- Insurance
- Other costs (fuel, repairs and maintenance, servicing, etc.)
- Get your financing in place
- Get your financing in place
Before visiting a car showroom, you should have a good idea of the deposit amount you can afford. It also helps to research available Car Loans, so you know what your monthly EMIs are likely to be. By pre-qualifying for a loan, it sets in stone the amount you are willing to spend and the ability to say, “This is my budget. What can I get for it?” Don’t let the loan repayment max out your budget; there are many more costs involved with car ownership. Learn to calculate your Car Loan EMI if you want to be sure of your outgoings.
Do not sign a loan agreement – whether it is with the bank that has agreed to extend you a Car Loan, or with the car dealer – until you know exactly what you are getting into. If you, like the rest of the world, are baffled by fine print, request friends or family who know their way around legal agreements to look it over on your behalf. And remember, lenders such as HDFC Bank offer Car Loans for both, new and used cars. So, whatever your preferred car, you will get the financial help you need.
- Don’t buy more than you can afford
After doing your online research and falling in love with a car, the temptation is to rush to the nearest car dealership immediately. And that is precisely what you do. After some haggling, you finalise a sweet deal. Your excitement mounts as the delivery date approaches.
But have you made the right choice? Did you buy a car that fits in your budget, or did you succumb to taking a longer-term loan for that higher-priced model with the fancy alloy wheels? Ensure you don’t fall into a trap in which you owe more on the car than it’s worth, thanks to depreciation. A good rule of the thumb is that you don’t want more than 20 percent of your monthly take-home salary to go towards your car’s EMI.
- Decide how long you plan to use the car
A new car loses most of its value in the first three years. To balance out the higher price you will have paid; you need to keep it for about eight years. If you buy a used car that’s 2-3 years old, the most substantial chunk of depreciation will already have been used up, so you need to keep it only for 4-5 years to get the most value for your money.
You could even buy a much nicer pre-owned model – which will cost you a lot less than a new hatchback – and then upgrade every few years to get more bang for the buck. On the other hand, if you plan to buy a new car and drive it until the wheels fall off, go for it. You will get your money’s worth even though the car costs more. But if you want to upgrade in a few years, a used car is a much better option.
- Shop around online
Sit in the comfort of your living room and browse a host of reputable websites. This is where you should get a first orientation, and not at a car dealership, where your first visit will involve seeing the car in the flesh (so to speak), kicking the tyres, and taking a test drive.
You can get copious amounts of information online on every conceivable make and model available. So, make notes, compare prices and technical features, read reviews – and if you know a friendly mechanic, ask him for his thoughts too. But always ensure the final decision is yours.
Read more about applying for a Car Loan online or offline here.
- Take a proper test drive
Make the test drive count! A quick spin down the street and back will not suffice. Drive in heavy traffic, open it up to expressway speeds if possible, take it down roads you are familiar with, see how easy it is to park, check its braking capacity. In short, put the car through its paces and pay attention to the details.
Don’t get too enamoured with fancy gizmos and sales talk. If a salesperson is with you, make sure you are the one asking questions. You’re going to spend your money on the car, own it for a few years, drive it for thousands of miles, so becoming familiar with it is essential.
- Check the warranty
In the case of a new car, most items not subject to ‘wear and tear’ are now covered by warranty in the first year or two, but after that, you will want to make sure that any future costs are not going to kill your budget totally.
Age-old advice might tell you to forget about extended warranties. However, some types of optional warranty coverage make sense. Consider lost keys, for instance. Depending on the type and model of the car, replacing keys can pinch your pocket. You should still be wary of extras, so make sure you fully understand what is covered, and for how long, in the warranty agreement.
- Look for these benefits
Dealers will try and get you to finance the car through them. Why? Because they often make as much money from this as from selling you the car! It may be difficult to see how much you are spending when the amount is spread over time, but dealers are trained to see an opportunity immediately. Do not fall for the sweet talk. Shop around for other benefits like Zero FC, accidental cover, disability cover, Top Up Loan.With HDFC Bank Festive Treats, get 100% funding on Car Loan at 7.50% onwards for New Car Loan and 9.75% onwards for Used Car Loan. Benefit from zero foreclosure charge, top up loans at 10.75% onwards. If you are a government employee, you are entitled to special benefits. The offer is valid from 15th Sept - 30th Nov 2021.
- Don’t forget to factor in Car Insurance
In India, Car Insurance is built into what’s called the ‘on-road’ price. However, it is not mandatory for you to get an insurance policy from the dealer, so shopping around is a good idea – as long as you ensure that each quote is for the same type of coverage. Check your options online and talk to friends and family members who own cars. A little research can go a long way in helping you get proper insurance.
- Finally, take a step back and review your choice
You’ve done the hard work and checked off each item but do go through the list again. Look at each part of the purchase process. Have you been rational? Have you missed any important steps?
This festive season, as you revel to commemorate King Mahabali, pick that dream car for your family. Even if you find your choice of car just out of reach, that doesn’t mean it cannot be yours a few months from now. But bear in mind how quickly the various costs of buying and owning a car can add up. So, here’s the thing – make smart and realistic decisions now, and you’ll be able to afford that dream car in the future. Happy driving!
Looking to apply for an HDFC Bank Car Loan? Click here to know more!
Now all is possible with HDFC Bank Festive Treats. For offers on EMI and much more, click here.
Har Dil karo Roshan!
* Terms & conditions apply. Loan disbursal at sole discretion of HDFC Bank Ltd. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Other charges and taxes as applicable. This scheme is part of Step Up cum Baloon EMI for 84 months. Nil FC after 50% tenure completion subject to minimum 24 months and Nil cheque bounce. Insurance bundled with the offer.