Buying a car is one of the most significant and expensive decisions that we make in our lives. This investment is not that small to change every month or two. This is an investment we use for years. So one small blunder in choice can make you regret it for years. So, in this article, we’ll know in detail how to save money while buying a car.
How To Save Money While Buying A Car
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While purchasing a car, there are many things to keep a check on from minor to major, i.e., from budget to utilities to maintain the finances and so on. It usually takes time, commitment, or a big salary to pay cash for a car. To ensure that you buy a car that is not only suited to your needs and condition but is also easy on the pocket. Here are some points and The Strategies For Money Saving While Buying A Car to consider
Time Duration 4 minutes
1. Make A Fixed Budget Prior To Your Car Purchasing:
The first and important step when planning to buy a car is to determine how much you can afford. When you select a particular car, you have to consider primarily about how much your pocket is permitting you to spend.
While purchasing a car, you should keep it in mind that total spending on the car, including expenses on fuel, insurance premiums, maintenance costs, and more within a household, should be 25% of your total monthly income.
Thus, you have to set a budget that does not interfere with the payment of your bills, savings, and other regular expenses.
2. Decide What You Want To Purchase A New Or Second-Hand Car:
Once you have made your mind while considering various factors and by arranging all your finances, make up your mind to purchase either a new or second-hand car.
At this instant check for all the features of some models and make a list of your preferences.
Going through all the pros and cons, you are now ready to assess your dream car’s perfect model and calculate the total cost.
3. Think About The Resale Value:
When you make a large investment, you should analyze all your gains and losses considering future situations.
In simple words, to think about resale value is farsightedness. For reselling, some cars may have better reasons over others due to the availability of various factors.
These factors could be a powerful engine, improved fuel efficiency, and the manufacturing brand’s popularity.
Since cars’ maintenance is one of the biggest concerns for buyers, cars with more service centers and better spare parts availability have higher resale prices.
When you are looking to buy a car, you have to sell it during the financial crisis or upgrade later. For these aspects, resale value is one of the crucial points to consider.
4. Features Of Car And Your Lifestyle :
Make a list of the features and specifications of the car that you need.
These could be seating, comfort, convenience, performance, and safety features. Select the car which suits your lifestyle and pocket both at the same time.
You also have to decide whether you want to opt for a car with a diesel or petrol engine because this also covers the central focus of essentials.
5. Secure Your Finances:
The most frequent mistake that every car buyer commits is not showing up in financing options before going to the dealership. While most dealerships offer or prefer financing options to help their customers buy their desired car, the interest rates offered during such situations are usually higher than the rates available in the market.
So first go through the market interest rates or banking interests before opting for the financing options.
6. Do Proper Research:
Make sure you take care of MSRPs, i.e., Manufacturer’s Suggested Retail Price.
Invoice the prices of the cars that you have shortlisted from the Internet.
It is advisable to choose a car that is 5% below your fixed budget. This will allow you to cover additional costs related to the car. While the prices mentioned on third-party websites may not be accurate, it can help you get a general idea about the actual prices.
7. Always Take Test-Drive:
Even if you have surf about the car and its features on the Internet, you should take your time with a test drive.
Make sure you like the feel and controls of the car while driving and otherwise.
Even when the car is parked, you can experiment with comfortable seating and other salient features in it.
8. Check For The Net Value Instead Of Monthly Payments:
Don’t be tempted to say yes to a low-cost deal for the long term, as they may eventually cost you more.
In addition, make sure you know the total price of the car. You should include all hidden costs, such as dealership costs, delivery fees, taxes, car preparation, and more.
Trying to trick potential buyers into expensive deals is another nature for salesmen, so beware.
Dealers often do not tell customers about these additional charges until buyers inquire about them.
Discounts For You To Follow To Save Money While Buying A Car
a. Discount From The Manufacturer End:
Check discounts on offers from the manufacturer itself. Go to the website and see the latest offers. Ask the dealer for clarification on the same. This exemption is supported by both manufacturer and dealer to increase sales volumes. What usually happens is that the dealer can try to save a percentage of the amount he has to let go to comply with the assisted rebates. So do the research and grab all the discounts for which you are eligible.
b. Dealers End:
Dealers mark their orders to manufacturers beforehand. After purchasing the stock, they had to pay for shelf life, maintenance, and interest of the loan which he took to purchase cars. To grab more deduction from a dealer is to consider letting go of his margins against pushing the car to age the stock and paying the interest amount until it is sold.
If you contact the dealer at the end of one month, there is a possibility that the dealer may settle for a bid given by you. In addition, dealers have a wide range of margins on the products and services you sell.
- They have their clear margin on the ex-showroom price of the car.
- The insurance that they sell to you and also have a large margin on it.
- They sell you extended warranties with huge margins values holding in it.
- Apart from this, there is a huge margin in goods as well as earnings.
Some Of The Ways Where You Can Ask For Deduction From Dealer:
The following deductions will surely help you to save money while buying a car.
i. Check for the car dealer’s VIN, who is trying to sell you the car. Dealers are highly concerned about clearing existing stock. If the car is more than a month old in stock, you can consider a hard conversation. Cars older than 3 months come under old stock, and you can easily get direct discounts of up to Rs 25,000.
ii. If your preferred car model is not in the dealer’s stock with whom you are negotiating with, and he had to take it directly from the factory. There is a high probability that you can get a good margin of discount from his side just for the sake of running a business. You can enquire about the ex-showroom costs in this situation.
iii. Dealers have a huge margin on the insurance they sell. Consider getting values from an outside broker. Show it to the dealer and ask them to cut your huge margin. Also, do not forget to get important insurance add-ons such as zero-depth, engine safety, consumables, return to invoice, etc.
iv. Dealers usually have a standard goods package to sell to customers. Check if you need the goods the dealer is selling to you and if it meets your requirement. If it is not useful, ask the dealer to cut it out or replace it with other alternative products you are interested in purchasing. You should ask for a huge amount of discount while purchasing an extended warranty as they don’t even include mechanical fuel into it.
v. If you find it inconvenient to work with the above process, ask the dealer for the on-road price from the services you need. After receiving the price, leave the actual quote you are willing to offer. Do not show your hurry or intense interest first.
Other Handy Tips That Save Money While Buying A Car
1. Never Shy From Bargaining-
You are not going to maintain any kind of relationship with the dealer. So come out of your shell and try to negotiate in all aspects possible. This is the expensive investment you are working for and to achieve most of your necessities of dream car comes true. This is necessary to save money in all aspects possible and make it a better version of purchase. This is the ultimate funda to buy a car in India
2. Consider Buying In Specific Occasions:
In India, purchasing on specific occasions like Diwali or changing of seasons or any other XYZ reason proves to be very handy for getting good margins.
3. Avoid Taking Car Insurance From The Dealer:
Dealers have a great margin in the insurance area. You can ask for a huge amount of discount specifically in this errand as insurance companies offer them a large amount of commission.
4. Free Goodies:
As you decide the car to buy, its time to start the negotiations on the free goods. The dealer has many money margins, so give it a try and take as much as you can.
5. Before Making Payment:
Avoid paying the full amount until you are sure that everything is finalized and is noted on the company’s letterhead.
6. Tax Benefits:
Through section 80EEB, you can have deductions in tax if you are purchasing an electric vehicle. So this is in view of pollution considerations. Through this scheme, the government tries to attract consumers towards electric vehicles. This is in view of decreasing the number of fuel-based ones on roads.
7. Wait:
Interaction is a wait and watches the play. Sit calmly, yet show your perseverance in buying. Most likely, within the greatest of 15-20 days, the dealer will compromise your bid if it is genuine and not insane.
8. Warranty Extension:
As far as the extended warranty is concerned, don’t take it. As it includes huge margins and unsatisfactory services. Even mechanical fuels also don’t lie in this warranty. If then too you are considering buying it, try to negotiate as much as possible in terms of getting a huge discount on that portion.
Tips To Reduce Maintenance Charges
Apart from buying a car, the maintenance charges are no less. However, we can certainly go through the below-mentioned ways to keep a limit on them.
a. The major expenditure on cars goes in fuel. So, the better your car is tuned, the less fuel goes in vain.
b. After fuel expenditure next goes on the engine. The better and flexible the engine is, the fuel consumption goes well. Make sure after you travel for a certain distance, you change your fuel. The frequently you change your fuel, the life span of the engine goes that long.
c. Added to the engine, take care of the car’s air filter. Make sure you clean it after every long drive or every month.
d. The maximum wear and tear of the car are on the tyre. There are people going for cheap tyres to save more but trust me; there’s no long run. The better quality tyre you purchase, even if it’s costlier than the other, but it goes on for a long duration. Added to that, it also saves on the fuel expense, increasing mileage. Even good quality tyres bear shock absorbers. By this, you can ride your car over humps, without even feeling it. Plus, your coffee won’t spill too.
e. Under the tyre issue, there comes pressure even. Pointing out in a different point to make it more clear. Ever pedaled a cycle with low pressure? How difficult and more strenuous it is. Isn’t it? Similarly, for a car, it uses more fuel, even for a small distance. So, check on the tyre pressures before you take your car out every time.
f. Make sure your battery has good fluid content. Better the water levels in the battery, the more distance it can cover on a stipulated fuel.
g. Also, keep a check on the brake/clutch/coolant timely.
Tips To Keep A Check On The Driving Expenditure
If you’ve gone through the above-mentioned points correctly, then you can sure save bucks on maintenance. However, there are even ways to save on your driving expenditure. Mentioned below are few such points.
1. Ever thought how much you can save on public transports than private? But for every work, it is not possible. So, why not go for a carpooling instead? You can accompany your colleagues to work as well as save money on fuel. Apart from everything, you also contribute a fresher air to nature as well, eco-friendly. One week you can take your colleagues in your and the next week, any of your colleague can.
Apart from mileage, company, and eco-friendly, carpooling has other good factors as well. Even in your car insurance, if you mention that you use your car very often and the distance covered is not much. By this, you can gain better in the future while selling it.
By sharing cars, you can also keep a check on the maintenance charges. If it is less used, so certainly you’ve to spend less on maintenance. Isn’t it?
2. Make a habit of driving under a stipulated speed. Switching off your engine in traffic signals and keeping a watch on gears.
Steps To Save On Car Insurance
Imagine you’re a poor driver, but you love your car the most. So, certainly, you won’t even think of taking a risk. Will you? No, right! But added to that, car insurances are way exorbitant. However, we’ve some interesting ways for you to save money while buying a car. So, let’s go on then.
- Imagine you got a BMW car. That’s way expensive. Isn’t it? So, there must be expensive things fitted on it as well. You can easily save more by showing it to your insurer.
- Suppose your car is outmoded. You’ve been using it for a very long time now. Thus, if your car is more than 5 years, spending on it would be regarded as funding on depreciation as per government laws. So, don’t purchase big insurance for such models.
- Different insurance providers have different policies. They also demand different charges for their service. So, before jumping on the first insurer, you get, make sure you’ve done a proper comparison. However, if you already have a health or property insurance policy, go for the same insurer. By this, you’ll surely get some deductions since you already know him for a long time.
- There are some companies that provide deductions based on the age of the person and the occupation pursuing. As per the terms, for a person of age group 25-60 years and by profession, a doctor or an army man has most likely an option to get insurance interest deductions.
- There are even options like, you’re a member of a vehicle company. So, by showing your membership cards, you can get discounts.
These small things are quite minute to notice, but you can add to your pocket when you sternly keep it in your mind. Yes, you’ll make mistakes once or twice but when you repeat, know if you’re cutting your own pocket short.
Frequently Asked Questions
1. How can we negotiate while purchasing a new car in India?
Negotiation is a wait and watches the play. Sit calmly, yet show your perseverance in buying. Most likely, within a maximum of 15-20 days, the dealer will compromise your bid if it is genuine and not insane.
2. Is this the perfect timing to buy a car?
In India, purchasing on specific occasions like Diwali or changing of seasons or any other XYZ reason proves to be very handy for getting good margins.
3. What things should we consider while purchasing investment over cars?
Dealers have a huge margin on the insurance they sell. Consider getting values from an outside broker. Show it to the dealer and ask them to cut your huge margin. Also, do not forget to get important insurance add-ons such as zero-depth, engine safety, consumables, return to invoice, etc.
4. Should I buy an extended warranty?
As far as the extended warranty is concerned, don’t take it. As it includes huge margins and unsatisfactory services. Even mechanical fuels also don’t lie in this warranty. If then too you are considering buying it, try to negotiate as much as possible in terms of getting a huge discount on that portion.
Final Talk:
There are various ways where you can keep a check on your expenditure. Be it your car costs or travels. The more consciously you handle things, the thicker it goes into your wallet. In this article, I hope you must have made plans on how to save money while buying a car. Enjoy!
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