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Old 20th January 2006, 13:23   #1
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Default Which scheme is better?

I have some queries regarding Auto Finance:

1>
Auto financiers while offering a car loan , offer two schemes , A> One Advance EMI B> First EMI due after one month of taking the loan.
Which one in better?

2> When Car finance is opted , one can get a cash discount of 3% to 5% (of the amount financed) ,[ Interest rate offered by Honda & Maruti is around 9.5% monthly reducing] , so which is better :
A> pocket the discounts offered
B> Decline the discount but negotiate and lower the Interest rate.


Any pointers?

Last edited by vipulG : 20th January 2006 at 13:24.
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Old 20th January 2006, 13:26   #2
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Quote:
Originally Posted by vipulG
I have some queries regarding Auto Finance:

1>
Auto financiers while offering a car loan , offer two schemes , A> One Advance EMI B> First EMI due after one month of taking the loan.
Which one in better?

2> When Car finance is opted , one can get a cash discount of 3% to 5% (of the amount financed) ,[ Interest rate offered by Honda & Maruti is around 9.5% monthly reducing] , so which is better :
A> pocket the discounts offered
B> Decline the discount but negotiate and lower the Interest rate.


Any pointers?
Not sure about number 1.
But for number 2, you could also explore bypassing the dealer and taking the loan directly from the bank. You won't get discounts but the rate should be in the 7.xx range.
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Old 20th January 2006, 13:32   #3
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Quote:
Originally Posted by vipulG
I have some queries regarding Auto Finance:

1>
Auto financiers while offering a car loan , offer two schemes , A> One Advance EMI B> First EMI due after one month of taking the loan.
Which one in better?

2> When Car finance is opted , one can get a cash discount of 3% to 5% (of the amount financed) ,[ Interest rate offered by Honda & Maruti is around 9.5% monthly reducing] , so which is better :
A> pocket the discounts offered
B> Decline the discount but negotiate and lower the Interest rate.


Any pointers?
In advance emi your emi per month will be slightly lesser than the emi starting the next month. your downpayment will go up as you need to pay that emi along with your downpayment.
Ideally bargain for the most discount from the dealer. Enquire among the other dealers and then tell come back to the dealer where you have decided to purchase the car and tell him that this is the deal offered by other dealers and he needs to reduce. Bargain hard as the dealer will reduce on the margins for a sale.
Also, as far as my knowledge goes the interest rate is around 7.5 to 8%
you need to bargain on that too. Look for a DSA outside the dealer to procure a loan....
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