5 Handy Tips to Negotiate a Car Loan
After endless hours of researching auto sites and consulting friends and family, you have finally decided on your dream car. You have found the exact make, color and model. Now, comes the tricky part: finding the best car finance in the market. With so many choices, how do you ensure that you’re getting the best deal?
Here, in this article, you can find five tips for negotiating your auto loan smartly. Don’t make the mistake of falling for the sales pitch of loan agents. Gain the upper hand, by playing your cards, the right way. Read on to find the best deals for your vehicle loan.
Tip #1 – Don’t skip Negotiating the Price of the Car
Most buyers make the mistake of assuming that car prices are non-negotiable. When you drop into any showroom, a smartly dressed salesman appears by your side and shows you the vehicles on display. As you check out the specifications and make of your dream car, make sure to ask for deals on the market price.
Remember that a dealer makes a considerable profit from the sale of each car. So, if you are willing to negotiate, chances are you can avail lower prices. Also, if there is more than one dealer for the same brand in your city, make sure to check out all dealers. Remember that as the price of the car comes down, so does the auto loan.
Tip #2 – Choose your Lender
Most dealers suggest a bank for their customers. This is because the dealer has a tie-up with a particular lender and earns a commission for each loan applied. Don’t make the mistake of choosing the lender suggested by your car dealer.
Instead, look around, do your own research and find the bank or NBFC that gives you the best interest rate.
Tip #3 – Always Negotiate the Rate of Interest
The rate of interest is the single most crucial factor in determining your loan amount. Make it a point to negotiate with the lender to bring down the offered rate of interest. A high CIBIL score will work in your favour while negotiating the interest rates. Try to improve your CIBIL score before you apply for a car loan.
Tip #4 – Shorter the Tenure, Higher are your Savings
Don’t fall into the sales pitch of owning a Car at the Lowest EMI. Lower your EMI; longer is the tenure and higher the interest you end up paying. Cars are assets that depreciate in value. So it makes sense to keep the tenure of the car loan as short as possible.
Tip #5 – Avoid Unnecessary Frills
Don’t include the additional accessories and add-ons in your car loan. Most dealers make huge profits in the extra-fittings they sell. So, if a dealer is pushing you to take additional add-ons and include them in your loan amount, try to take a firm stand and avoid it.
Do not Fall Prey to Gimmicks
Make sure to follow these handy hints while negotiating a car loan. Also, it pays to be aware of the existing interest rates and the EMIs available with the help of an online auto loan calculator.
Stay informed, make a better choice and enjoy the best deals on car loans.
