Customers are often bombarded with various special offers of rate cuts by banks and discounts by the dealers during festival seasons to woo them into making the purchase with a car loan. However the offers are not as simple and beneficial as they appear prima facie. In order to derive meaningful benefits from these offers the customers have to understand several aspects of car loans and then have a smart plan ready to exploit the situation as and when it presents itself. There are a few aspects that the customer needs to keep in mind when being lured by any such special offer or rate cut.
Check Affordability and Utility
Many customers tend get carried away by such attractive offers into buying which they neither afford nor have requirement for. Thus this factor should be on the top of your mind when any such offer is put forward. The total cost of a car through a loan will be substantially higher after considering the high interest rates and other associated miscellaneous fees and charges that are applied. The car loan EMI that is worked should be considered as to being within range of monthly income before selecting the model of the car. The actual predicted utility of the car in terms of family size, requirements and design features must be carefully analyzed in order to avoid buying a rather costly car through a high interest car loan which may not be needed. Just because an offer is on do not go in for a car which is not affordable or needed by the family.
Cut down on fancy stuff
In all such offers of rate cuts customers often get tempted to go for unnecessary expenses such as a specific color or model that may cost a fortune without any real term value. The dealers will try to push all kinds to non essential accessories citing that the money saved through the offer be utilized in getting the best for your car. The customer needs to evaluate the requirements for himself and not squander away the savings on trivial additions.
Bargain hard with Financiers, Dealers and Agents
Despite the cuts being announced upfront there is still great deal of scope of bargaining further discounts. It must be borne in mind that the financier or the dealer is providing rate cuts and discounts in order to increase sales. Use the same tactic by approaching them at the end of the month or quarter when they are struggling with their target figures to pressurize them into a better deal. Use the comparisons available online to have a better insight that arms you well to deal with the fraud figures that agents often put forward to convince customers. In case you can bargain a great reduction in interest rates then the best policy is to keep the tenure at 4 years only so as to derive maximum benefit of the lowered rate. Long term loans even with less interest will still work out costlier. Push the dealer into providing a good insurance cover free of cost or at a discount.
Having a clear perception of the real implications of such rate cuts and discounts helps the customers avoiding the fraudulent claims that the financiers, dealers and agents make of such offers which might even work out to be costlier than a normal car loan in the long run.