Go Back   Team-BHP > Team-BHP > Team-BHP Advice > On buying a car


Reply
 
Thread Tools Search this Thread
Old 2nd March 2007, 09:33   #31
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 43,429
Thanked: 61,543 Times
Default

Quote:

I would like to have a proper understanding about this.IN magazines like Autocar and all its mentioned 4.5% discount on the loan amount.Is this discount that you have mentioned that they are talking about.Is discount on principal that is being asked or on the amount that has been received by them as inerest.
The amount that will / has been received by them in interest. Yes, Autocar speaks about the same thing.
GTO is offline   Reply With Quote
Old 2nd March 2007, 09:50   #32
BHPian
 
rohitbagai's Avatar
 
Join Date: Aug 2006
Location: New Delhi
Posts: 401
Thanked: 226 Times
Default

Quote:
Originally Posted by GTO View Post
The amount that will / has been received by them in interest. Yes, Autocar speaks about the same thing.
4% is of the amount of loan that we take up and not the interest income. Suppose I take up a loan of 4,00,000. I will get a discount of 16000 for sure. Also most ppl dont know that there is a discount on the interest we pay too. If the total interest we pay is 1,50,000 the DSA's of many banks give additional discount of 2.5% of it. i.e. Rs. 3750.

EDIT:- Also if getting a loan through DSA/DMA discuss with them what more discount they can give if you get your car insured through them. I have seen many of my friends get 50% off on insurance. For a car like verna it could be around Rs. 13000 additional discount. Ask them to adjust in EMI and you will pay full.

Last edited by rohitbagai : 2nd March 2007 at 09:56.
rohitbagai is offline   Reply With Quote
Old 2nd March 2007, 19:54   #33
BHPian
 
jobinjv's Avatar
 
Join Date: Feb 2006
Location: Chennai, Thiruvalla
Posts: 109
Thanked: 2 Times
Default

Quote:
Originally Posted by rohitbagai View Post
4% is of the amount of loan that we take up and not the interest income. Suppose I take up a loan of 4,00,000. I will get a discount of 16000 for sure. Also most ppl dont know that there is a discount on the interest we pay too. If the total interest we pay is 1,50,000 the DSA's of many banks give additional discount of 2.5% of it. i.e. Rs. 3750.

EDIT:- Also if getting a loan through DSA/DMA discuss with them what more discount they can give if you get your car insured through them. I have seen many of my friends get 50% off on insurance. For a car like verna it could be around Rs. 13000 additional discount. Ask them to adjust in EMI and you will pay full.
Thanks mate.. But more doubts are coming up.. First, could u abbreviate on DSA/DMA.. Say I plan on Verna and the Hyundai dealer has ICICI at there disposal but I want a loan for a nationalized bank say SBI, will they willing to give me the so called discount or i can have it only if I am to go through the dealer specified bank.

Things confusing
jobinjv is offline   Reply With Quote
Old 3rd March 2007, 00:46   #34
BHPian
 
rohitbagai's Avatar
 
Join Date: Aug 2006
Location: New Delhi
Posts: 401
Thanked: 226 Times
Default

Nationalized banks don’t give such discounts. Private Banks like ICICI HDFC Etc give these types of discounts. DSA/DMA's are Direct Sales Associates/Direct Marketing Associates for the private banks. Many small financers are DSA/DMAs of private banks. They usually give better discounts than bank itself. Dealers are least bothered to give you best discounts as they have other streams of revenues. They just need DO (Delivery Order) from bank or financer to deliver you the car. Also if you have an existing relationship with the bank for example a home loan or a credit card from ICICI. The bank will give additional 0.25% discount on the overall rate of interest. On the other hand the FI report is not necessary in such a case and you can get loan disbursed more quickly.

Last edited by rohitbagai : 3rd March 2007 at 00:51.
rohitbagai is offline   Reply With Quote
Old 19th March 2007, 11:19   #35
BHPian
 
Join Date: Feb 2007
Location: Bangalore
Posts: 191
Thanked: Once
Default

Quote:
Originally Posted by cpserrao View Post
Many thanks for posting this information. Using this information I was able to play ICICI bank against SBI and Citi and negotiate a rate 0.5% less than what was originally quoted. Got an effective rate on 9.65% (after finance payout etc) on 4.75L for 36 months. Managed to lock in the rate before the increase happens.
How much does that work out to in EMI? How did you calculate effective rate? I did this quick calculation based on infor available at the HDFC website for 13.5% interest (which is what I think they are offering)

amount yrs EMI
total diff % higher 350000 3 11878 427608 77608 22.17371 350000 5 8054 483240 133240 38.06857

It seems like we payout 1,33,240 more for a 3,50,000 loan amount over 5 years. Crazy difference, if you ask me.
wizardofid is offline   Reply With Quote
Old 20th March 2007, 11:41   #36
Distinguished - BHPian
 
supremeBaleno's Avatar
 
Join Date: Dec 2005
Location: Weekdays@Chennai, Weekends@Kerala
Posts: 5,081
Thanked: 1,398 Times
Default

Quote:
Originally Posted by jobinjv View Post
@supremeBALENO, You had stated of one document that you wanted to be removed.Was there just one or more than that.if so please provide information.
There were atleast 3-4 such pages in that thick booklet. He wanted me to sign all. I only signed the ones that were relevant and crossed out the illogical / irrelevant ones.
Take the time to read through the pages and you will know which ones to sign and which to avoid.
supremeBaleno is offline   Reply With Quote
Old 20th March 2007, 12:12   #37
Senior - BHPian
 
esteem_lover's Avatar
 
Join Date: Jul 2006
Location: Madras/Py
Posts: 7,551
Thanked: 428 Times
Default

Quote:
One of the declarations that they wanted me to sign was "Even if all the EMI cheques were honoured, they still retain the right to seize my car".
Dont tell me the manager's name is Don Corleone. man, which bank was that ?


And always insist on a copy of the document that you have signed, which will be very useful for future references.

Last edited by esteem_lover : 20th March 2007 at 12:27.
esteem_lover is offline   Reply With Quote
Old 20th March 2007, 12:35   #38
Distinguished - BHPian
 
supremeBaleno's Avatar
 
Join Date: Dec 2005
Location: Weekdays@Chennai, Weekends@Kerala
Posts: 5,081
Thanked: 1,398 Times
Default

Quote:
Originally Posted by esteem_lover
Dont tell me the manager's name is Don Corleone. man, which bank was that ?
GE countrywide. Yeah, they had some real stupid clauses in there.


Quote:
Originally Posted by esteem_lover
And always insist on a copy of the document that you have signed, which will be very useful for future references.
Yes, this is also a point to remember. Also, do not sign anything which has blanks (interest rates etc) that they will fill later.
supremeBaleno is offline   Reply With Quote
Old 1st May 2007, 09:12   #39
BHPian
 
ScarySkulls's Avatar
 
Join Date: Mar 2004
Location: Halifax, N.S.
Posts: 623
Thanked: 18 Times
Default

Brilliant Topic.

Discounts can be had on used car loans too..??
I'm keen on SBI

Last edited by ScarySkulls : 1st May 2007 at 09:14.
ScarySkulls is offline   Reply With Quote
Old 1st May 2007, 09:37   #40
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 43,429
Thanked: 61,543 Times
Default

Quote:
Discounts can be had on used car loans too..??
Absolutely yes; in fact the potential for bringing down the rates for used car loans is more than on new cars (due to the inherently higher rates).
GTO is offline   Reply With Quote
Old 1st May 2007, 20:46   #41
BHPian
 
ScarySkulls's Avatar
 
Join Date: Mar 2004
Location: Halifax, N.S.
Posts: 623
Thanked: 18 Times
Default

That is good.

Asked because the rates are Really pretty high
18% reducing for pvt banks like ICICI
around 14% reducing for SBI Etc.
ScarySkulls is offline   Reply With Quote
Old 23rd May 2007, 12:22   #42
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 43,429
Thanked: 61,543 Times
Default

Added a superb "Loan Amortization Schedule" excel sheet to the opening post; members can download the same. Thanks to BHPian nikunj_cal for sharing it with us. It will help you to calculate the EMI for different loan amounts, juggle between interest rates, calculate total interest, calculate foreclosure charges and so on.
GTO is offline   Reply With Quote
Old 24th May 2007, 13:51   #43
BHPian
 
adityapd's Avatar
 
Join Date: Feb 2004
Location: Mumbai, Philadelphia
Posts: 288
Thanked: 0 Times
Default

Guys,

Are the interest loans on cars on a downward trend these days ?
saw a couple of ads with Optra being offered at 7.5% and the xeta as low as 5.9% a couple of days back.

~A
adityapd is offline   Reply With Quote
Old 24th May 2007, 14:02   #44
BHPian
 
appuchan's Avatar
 
Join Date: Jan 2006
Location: Bangy
Posts: 639
Thanked: 13 Times
Default

Its done by banks/financial institutions using special tie-up with car makers (who will compensate the bank for low rates). Since more than 75% of the car purchases were done with loans, car makers are now facing the heat due to high interest rates.

Please do take care to read the fine prints regarding the so-called low interest rates, as there may be some other clause like pre-payment penalty, freedom for the banks to hike the rate substantially after disbursement, no freebies from dealers, higher processing/admin/whatever fees etc.
appuchan is offline   Reply With Quote
Old 24th May 2007, 14:19   #45
BHPian
 
nikunj_cal's Avatar
 
Join Date: Oct 2006
Location: Kolkata
Posts: 450
Thanked: 0 Times
Default

Quote:
Originally Posted by GTO View Post
Added a superb "Loan Amortization Schedule" excel sheet to the opening post; members can download the same. Thanks to BHPian nikunj_cal for sharing it with us. It will help you to calculate the EMI for different loan amounts, juggle between interest rates, calculate total interest, calculate foreclosure charges and so on.
Wow thx GTO , !!!

Just a point to add , SBI calculates its installemnts on the basis of Daily reducing Balnce and my guess is so does the Excel Sheet . ICICI and UTI have their own funny ways of doing it .IMO Daily Reducing Method is the best as you end up paying more towards the principal and less towards the Interest !!!
nikunj_cal is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
ARTICLE: Lease OR Loan? Which EMI is better for you GTO On buying a car 207 26th July 2016 16:03
Bangalore & Kolkata: Lowest average speed of traffic in India dpkbehera Street Experiences 5 11th January 2016 11:15
HDFC Bank Car Loan- Is this a good finance deal ? manumani Indian Car Loans & Insurance 7 22nd July 2010 21:03
Got 15"alloys and tyres,good deal or bad deal? .anshuman Tyre & Alloy wheel Section 10 4th April 2006 12:58


All times are GMT +5.5. The time now is 07:14.

Copyright 2000 - 2016, Team-BHP.com
Proudly powered by E2E Networks