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Tips for negotiating car prices and getting the best deals

Buying a car is one of the biggest excitements for many of us but it also demands a huge cash outflow. To save the maximum while buying or leasing your car you must pay the right price. Understanding the various constituents of a car’s price is essential to make an informed decision. It saves you from any unexpected financial surprises. Although a large part of the car price is a fixed cost, you can negotiate for a few things and get a reasonable price beyond its sticker price. Let’s dive in and see how to get the best car price with negotiation in a fair way.

Constituents of a Car Price

  1. Ex-showroom price: It’s the basic cost of the car that includes the manufacturing cost, profit margin and tax payable. This price doesn’t include the expenses such as registration charges, insurance, and fees applied. You can compare the ex-showroom price of various car models and brands to narrow down your choices.
  2. On-road price: It is the total cost you pay to legally drive the car on the road. It’s reached adding the ex-showroom price, road taxes, registration charges, and insurance costs. Remember, the road taxes changes from one to another state so gather knowledge about the rates in your state beforehand. Also, the registration charges are fixed by the regional transport office (RTO).
  3. RTO charges: To register your car legally you pay the RTO charges. It includes the registration fee, road tax, and other fees. It also changes from state to state and is generally taken at a fixed percentage of the total car price. It depends on the car’s engine capacity, ex-showroom price, and the state’s taxation rules.
  4. Car insurance: Car insurance protects your vehicle and your rights as an owner against any loss related to your car. It’s a crucial figure of your car price while also in India every vehicle must have a third-party liability insurance cover. You can also go for comprehensive insurance that covers both third-party liability and own damage to the vehicle. The insurance premium of a car depends on factors like; its model, age, and driving history besides the chosen coverage.
  5. Financing: Financing a car is a very common thing nowadays. While it’s good to pay as much as the down payment you can, it’s also advised to finance your car to save from a huge cash outflow. A car loan includes the total price of the car and the interest applied. The rate of interest depends on your credit score, loan tenure, and the lender’s policies.
  6. Accessories and services: Accessories can give your car a personalized touch and they include features like alloy wheels, infotainment systems, seat covers etc. Services are extended warranties, annual maintenance, and other value-added services. You must carefully choose these extras as they can exponentially raise the price of your car.

Know These Factors to Reach The Best Price on the Car

  1. Ownership cost: The ownership cost includes expenses such as fuel consumption, regular maintenance, repairs, and depreciation. In the long run, these will affect your budget. If your car is fuel efficient it can save you some money and also stay fit to run for more years. Research well the vehicle’s reliability and expected maintenance costs before actually paying for your vehicle.
  2. Financing options: The interest rates on your car loans varies significantly between lenders and the loan tenure. It affects the total interest paid over time and thus the value of the car to you. To save the most interest you should shop around and negotiate with different financial institutions to secure the least rate.
  3. Car variant: In one car you can have many variants which can be slightly to a lot more different from one to another. From basic to higher end, these models also get more expensive. Based on your desired specifications and features you should find out the right model for you.
  4. Insurance: Car insurance is mandatory and its value affects the price of the car. As high as the coverage you opt for so will be the insurance premium. Before choosing whether you need comprehensive insurance or third-party liability insurance, decide your needs, budget and expected run of the cost. You must compare the insurance plans from different providers to get a suitable policy with adequate coverage and at a competitive price.
  5. Maintenance cost: The maintenance cost of a car depends largely upon its manufacturer, model and on-road run. If you go for a car made in Japan or America or any non-Indian brand, you pay more maintenance price. It happens because the services are expensive for the manufacturer in our country. Also, check the customers’ reviews about their experiences of maintaining the same brand car to know the actual picture. It helps you reach the estimated value of the maintenance costs and you can make an informed decision.

Tips to Negotiate the Best Car Price

  1. Research the best car and seller for you: Decide your needs and wants about a car before finalizing the right car model and manufacturer for you. List down a few cars and their dealers in your area. Now compare the prices, features and customer benefits available at various sellers. Don’t miss to check out the customer reviews and reputation of the particular dealer you decide upon.
  2. Quote lesser to get the best car price: the oldest yet effective way of starting negotiation is quoting the least possible reasonable price of the car. On the other side, the dealer will open the negotiation with the maximum possible price. After this, discuss the advantages you have as a customer like a good credit history, high credit score, high trade-in value, references, eligibility for a corporate discount etc. The dealer will then present a counter offer and after a few adjustments, you can negotiate a price suitable for you.
  3. Shop online at multiple dealers: the internet has it all and before you make one of the biggest purchases of your life, do check the resources on it. Here you can check the plans of different dealers, cars of various kinds and other benefits like easy financing and a reasonable rate of interest. You can also get some time-bound discounts running on a car or at a dealer and avail advantage of it. Going online is the best way to find out a few cars suitable for your budget and needs.
  4. Get preapproval on financing a vehicle: Pre-approval on a car loan proves your eligibility and also gives a price window between which you can buy your car. This improves your negotiation power and you can easily get the finance on your vehicle with the best price.
  5. Know the negotiables and non-negotiables: Not everything on a car price is negotiable hence know them before starting the negotiation. It saves you from a bad opening and looking naïve as a customer. For instance, the ex-showroom price is non-negotiable, but expenses like insurance, extended warranties, and accessories are mostly open to negotiation.
  6. Check your credit history and score: Your credit history and credit score are crucial to make you a potential borrower. Not just the car loan but they play a major role in the approval of any loan you take. When you are planning to finance your car, do check these details and wait for corrections and improvements needed before purchasing your motor vehicle. Doing this can also get you a better rate of interest with no hidden costs on your car and loan. Check out how to maintain good credit score
  7. Separate the exchange value of the old car: Deal separately for the trade-in value of your older car while buying the new one. Sometimes the deals try to obscure the actual total value of the car by bundling the exchange value and the car’s price.
  8. Eliminate expensive add-ons: Extended warranties, paint protection, bigger insurance with insignificant coverages, extraordinary seat covers etc. are many such add-ons that a dealer tries to sell you. Stay attentive to not get lured for such things and save from paying any extra costs.

How to be Ready for Negotiating Car Prices

  1. Be prepared: check out the market trends, car prices and financing options before finalizing your car deal.
  2. Stay firm: prepare a budget and stick to it while negotiating your car deal. Do not get swayed away by the pressure tactics of the dealers.
  3. Be ready to walk away: Buying only one car or from a particular dealer is not the only option. If the dealer is not meeting your requirements, you can switch to other dealers.
  4. Switch the sales person: Sometimes a salesperson can be tough to tackle for negotiating car prices. You can always ask for changing the person at the dealership.
  5. Read the fine print: Before signing the loan deal, you must know all the terms and conditions of it. You can find a few loopholes and possibly take advantage of these to get a better price on your car shopping.
  6. Buy at the right time: Take advantage of seasonal promotions, year-end discounts, or when a new model is about to be released.
  7. Focus on monthly payables: Staying within your budget and calculating the monthly payables in the form of instalments on financing, your car is crucial.
  8. Save your emotions: showing too much excitement or urgency can cost you higher. While purchasing your car avoid these emotions and negotiate calmly.

Top 7 Price Discounts to Ask for

  1. Corporate discount: Many manufacturers and dealers offer corporate discounts to employees of a few particular organizations. Before visiting the lender check out of you are eligible for such discounts. It can cast a substantial difference in the payable price of your car depending upon its value.
  2. Manufacturer discount: These discounts are also known as cashback offers or cash discounts. These discounts are given by the manufacturers to boost the sale of the car and directly reductions in the car’s ex-showroom price.
  3. Exchange bonus: While you can reduce the price payable by exchanging your old car, you can also get a discount on this. It’s the additional discount over the exchange value and the performance of your old car can affect it.
  4. Loyalty bonus: Dealers and manufacturers often give this discount to their existing customers. This discount encourages customers to stick with the brand for their next purchase but works in your favour as you get a better deal. Also, in this case, your loan approval becomes easier.
  5. Insurance discount: You can compare various insurance plans and ask for a discount from lenders with higher insurance costs and premiums. Sometimes, deals and insurance companies also promote such discounts.
  6. Financing discount: If you choose the in-house financing of the dealer, chances are high that you get a discount on this. Before finalizing the deal, ask for these options and compare the plans to avail of maximum benefit.
  7. Additional discount: Your negotiation skill, time of purchase and dealer’s incentives are a few additional discounts you can get on your car purchase. Suppose a car model is about to discontinue in the market, you can buy that car with a bigger discount. Before the annual budget comes in, you can get better prices or when the fuel price is inflating heavily, additional discounts can be given by the lenders to raise the sale.

A car is a dream for many of us but also a liability. When you spend a big section of your income in buying a vehicle routinely, maintenance expenses and the monthly cash crunch can be regular. To stay financially unstressed getting a credit backup is crucial. FlexSalary Personal Loan in the form of line of credit can give the budget that pushes and help you in a smooth financial run.