Imagine you have finally decided to buy a particular car after countless hours of research. You go to a dealer and he quotes a final on-road price and you find it somewhat high. Many of us face this situation and we go to some other dealer who also quotes a similar price. So, what makes these dealers inflate the price tag? The answer is simple. They have a margin on your car and a greater margin on the official accessories and specialized warranties. Based on user feedback, we have made a list to help out the average buyer to negotiate and get the best bang for the buck.
The Discount Factor – Discounts on cars were often unheard a decade back and people used to buy at whatever rate the dealer quoted. With increasing awareness nowadays, people have started negotiating for the right price and reducing the burden on their pocket.
There are some Golden Rules towards a successful rate negotiation, the best one being “negotiate to the point when the dealer asks you to get out of his showroom literally”. This idea may seem crazy but gives an approximate idea of how much he can reduce the price point to.
Do not expect any discount if the car is just launched or is in very high demand with extra-long waiting periods. For example, Skoda has phased out the Fabia and if you are considering it as an option then you can negotiate it to a point of atleast 10%.
Note – If the dealer suddenly gives a big discount on a high-selling car, then do not fall to his trap and make sure that the car is not going to be facelifted/updated. There have been cases of Maruti Suzuki dealers giving a good discount and insisting customers to buy the Wagon R in between December 2012 and January 2013. Many customers fell for this trap not realizing the facelifted version was launched in the middle of January. It was a two way benefit for the dealers as they were clearing the previous year’s stock and clearing a model which was to be updated!
Almost all the carmakers offer discounts in December and January to get rid of the old stock and it is solely your decision whether to go for it or not depending on how long you intend to keep the car and how much you care about the resale value. If you do not consider these factors much then surely December-January is really a sweet time to buy cars with raining discounts!
Corporate Discount – Employees of certain reputed companies and PSU’s have a very good chance of getting a corporate discount which is offered by the car manufacturer rather than the dealer which is normally around Rs. 25,000/-. Filling a form online at the manufacturer’s website or simply contacting the dealer can help you get this. Different companies have tie-ups with different manufacturers which give them discounts. Everyone in a company likes to buy a car which offers them maximum discount. There have been cases of Honda City S MT version being sold around Rs. 7 lakhs (without taxes and insurance) to some PSU’s before it was facelifted!
Exchange Bonus – If you plan to exchange your old car, the dealership you are purchasing your new one insists on an exchange bonus which is typically around Rs. 30,000/-. The dealer earns a neat margin on your old car and it is always advisable to sell your car to an individual and you can get a better deal if you are not in a hurry and are not dependent on the money from the old car to buy a new one. You can always use an online classifieds service such as Motorbeam Classifieds.
Loyalty Bonus – If you luckily happen to have another car from the same manufacturer then you can insist upon a loyalty bonus which is typically around Rs. 10,000/- and this is offered only by a few manufacturers but there’s nothing wrong in asking for it.
Finance Commission – Finance companies give a fair share of commission to the dealers for selling their loans. Although the dealers generally give the maximum finance payout to the customer, he earns a decent amount of commission which is less than 1% of the total finance payout. You can always push the dealer to give you the maximum finance payout and reduce his margin on the commission. Alternatively, you can get a quote from the dealer and get a loan yourself which saves the commission part. All it takes is a little patience to check the interest rates on the internet.
Insurance Commission – Insurance companies generally give a fair share of commission to the dealer which is around 30-40% of the insurance premium on the vehicle. You can ask for a 20-25% discount on the premium. If the dealer does not oblige to give any discount you can get it done on your own. Make sure to get your car insured before taking its delivery by noting down the engine and chassis number. The dealer generally does not deliver the car unless it is insured; also it is illegal to drive a car without insurance.
When renewing the insurance policy, make sure to ask for ‘No Claim Bonus’ from the insurance company if you did not claim anything from the insurance company from the previous policy.
Other Discounts, Extended Warranties and Accessories – Sometimes there are charges for things which seem unjustified and you can always ask the dealer to cut them off. You can always bargain for handling and service charges.
Getting an extended warranty is a good thing and will save you from the exorbitant prices of some components. Make sure you do not modify anything in such a manner which will render your warranty void. Many dealers force customers to choose some extra care package or an addition to a warranty and it is always at the will of the customer to accept it or not as all cars come with a standard warranty. On the other hand, the authorized accessories may be costly but fitting them at authorized dealers will not void your warranty.
Small accessories like floor mats, car cover, number plates are generally given by most of the dealers but nevertheless it is a task of the customer to insist the dealer to give them. Many of the bigger cars come with black door handles in their base models. If you are planning to buy one of those, ask the dealer to get them painted to body-colour for free.
Never be ashamed to ask any of the above from the dealer because if you are not asking it then mostly you won’t be getting them!
Remember to insist upon these and if you can get more than one type of discount or some free accessories, then you would surely be driving home with a fatter purse!
Before Buying the Car – While booking the car it is highly advisable to inform the dealer that you would like to do a pre-registration inspection. This is extremely important because once your car gets registered with the RTO, it is highly improbable that the dealer will allow you to swap your car for another model. After booking your car be updated with the dealer about the status of your vehicle and it is always better to get the engine number and chassis number before your car gets delivered so that its delivery is guaranteed to you. Once the car is delivered to the dealer’s stockyard, ask the dealer to wash it clean and perform a PDI (pre-delivery inspection) for scratches, dents, odometer reading, paint finish, tyre condition, etc. It is always better to be accompanied by an experienced mechanic while performing the PDI. If you happen to find any defects, negotiate with the dealer and ask him either for a discount (if the defect is very minor) or a complete replacement (if it is major one like a crack on the windscreen).
After you are fully satisfied with the car ask the dealer to register it with the RTO. Complete the formalities and drive home your dream car!