5 MinsDec 03, 2020
Arjun Singh has been planning to buy a new car but he missed the discounts that auto manufacturers offered during the festive period of Dusshera and Diwali. He is wondering whether to buy a car now or wait for the New Year.
Ideally, Arjun should start the hunt for his dream car and close the deal beginning December. He can get a good deal on the car and accessories.
What’s the big deal about December?
With the festive period extending to Christmas and New Year, many auto companies and dealers may continue with their discounts and hence Arjun should start looking for deals on his dream vehicle.
Another reason why Arjun may be able to get a good bargain is that car dealerships have targets to meet. Quotas start as monthly, quarterly, half-yearly and yearly numbers. Hence, there is a high chance that many auto companies and dealers may offer discounts and incentives to potential customers so that they can meet their targets.
But what if dealerships don’t offer discounts?
Here’s why they just may. Car dealerships have to make room for the new car models that will be launched in 2021. A new year is when car manufacturers launch new vehicles. They don't want old models eating up space at dealerships and hence, would like dealers to clear off old stock. Often, manufacturers also approve discounts to dealers at the end of the year. Essentially, Arjun should treat December as a year-end sale.
What sort of discounts can Arjun expect in December?
For starters, Arjun can expect cash discounts. The final amount will depend on his bargaining power and the dealership in question. He should also press hard for free accessories. Several items like floor mats, navigation systems, and entertainment systems are often not part of the standard package. Arjun can negotiate with the dealer to include those.
Dealers also have tie-ups with insurance companies. If Arjun bargains well, the dealer may agree to pay part of the insurance premium. Arjun should also ask for extended warranties or warranties at a discounted rate.
If possible, Arjun can compare the offers available from earlier during the year and bargain for a better deal now. There is every chance that his New Year wish may just come true.
The discounts on various vehicles makes it a great time to upgrade to a car and strike a bargain for the old car to be adjusted against the newer model.
[Also Read: How you can get the best out of your car loan]
What should he keep in mind when he goes shopping?
The first thing Arjun should do is research on the vehicle he wants. If he is okay, he should choose a model that is getting a new variant in 2021. The dealer is more likely to give away older models at a discount to make space for the new one.
Arjun must understand that he might not have choices when it comes to colours or other specific options. It is better to buy something that the dealer already has.
Are there any cons?
Yes. The year of registration matters when it comes to resale. So, a car registered on say, December 31, 2020, is likely to fetch a lower resale price than a car registered on January 1, 2021, even though the difference is only one day. The December-registered car would be considered an older model, compared to the January-registered one.
But since Arjun is planning on using his new car for at least another five years, the difference by the time he does decide to sell it is likely to be marginal.
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Disclaimer: The Source, a Mumbai-based content creation, and curation firm have authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
