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Old 8th January 2007, 11:03   #1
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Exclamation Auto Finance for WagonR Vxi???

Hi all,
I had been to RNS motors(Yeswantpur,Bangalore) yesterday and as i was opting for a finance deal for the WagonR Vxi model, i asked for on-road funding. Maruti guys finance with Citibank to which i'm a member and even so these Maurti dealer sales rep. quoted a staggering 11.5 interest!!! whereas SBI quotes 9% interest. When asked about it they said that service charges from SBI will come to the same 11.5% itself and also as service charges sales rep. quoted Rs. 650 as service charge(only once paying). Is it true that SBI quotes are including those service charges and will come up to 11.5% interest??? I got the quote as below for a 5 yr period:

On-road cost of the vehicle: 4.29 lakh.
Total Discount: Rs. 17,863( Free insurance+ 4k discount)
Down payment: 1.03 lakh.
EMI : Rs. 6800/-

As this is my first car and not much ideas on insurance and stuff, which would be more economical for me? To go for Maruti finance or say any other finance?? Plz excuse my innocency!!!


Regards,
Kiran.
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Old 18th January 2007, 11:08   #2
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Based on my own personal experience(and others), I would recommend SBI always.

But I've also heard that there is a tieup for Maruti Finance with SBI. Then try that option since you may get discounts on Extended warranty etc & finance payouts.
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Old 23rd January 2007, 10:34   #3
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Thanks mithun.U mean its not wise to go with dealer finance(Citibank)?? hmmm SBI. I've an account in SBI and will that help me to get a better deal. When i asked about a month ago they(SBI) quoted 9% interest. Don't know whether it includes all the charges. How much loan will they approve for me. They said 1 lakh/annum should be my income and its way above it.

One more Q. How should i approach the dealer say that i've got bank approval of the loan sanctioned. Then what should i pay as downpayment. Is it that what ever the dealer quotes or say i give some money and the rest will pay as EMI?? I'm ready to give a downpayment of 75K. Will it be ok with the dealer?? Plz clarify.
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Old 23rd January 2007, 10:52   #4
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I'd called a local ICICI franchisee to check on finance rates a few days ago, also for a WagonR.

Over the phone, the executive offered an amount of Rs. 2131 per lac for a 5 year loan, which works out to a flat interest rate of 5.57% on the loan amount. The executive did hint at slightly better deals for those employed in the 'corporate' sector.

I'm not sure if there are other charges that apply, but one EMI is expected up front, which makes the rate slightly higher.
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Old 23rd January 2007, 11:07   #5
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ramki067, forget about the charges to be paid. Ask both banks/dealers to give you a final quote with all additional expenses included. please compare EMI per lac and see which one is favourable. Also, try and bargain for a favourable prepayment penalty clause. I would suggest taking the loan from a lender who allows you the option to prepay at a very low penalty (but a slightly higher EMI) as compared to someone whose EMI is a little less but you can't prepay that loan due to an exorbitant penalty. vbmenu_register("postmenu_350355", true);
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Old 23rd January 2007, 11:23   #6
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ok. if i take loan from SBI then whts the amount should i pay to the dealer?? How do i go about it?? Pardon my innosence.
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Old 23rd January 2007, 11:29   #7
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Quote:
Originally Posted by airfoil View Post
Over the phone, the executive offered an amount of Rs. 2131 per lac for a 5 year loan, which works out to a flat interest rate of 5.57% on the loan amount. The executive did hint at slightly better deals for those employed in the 'corporate' sector.

I'm not sure if there are other charges that apply, but one EMI is expected up front, which makes the rate slightly higher.
If EMI is 2131 per lac for 5 years, then interest is 10.13% (you can check using PMT function of Excel). 'Flat rate' is the fancy term, which converts 10.13% to 5.57%.

Normal scenario (EMI per lac):
For 5 year loan, EMI is between 2125-2149 (rate 10 to 10.5%).
For 3 year loan, EMI is between 2076-2112 (rate 9 to 9.75%).

Usually they charge 500-750 as processing/administration fee. This might be waived off during sale & festive season.

Anything above this range is bad deal & anything below is excellent !.

IMO, banks club too many extras into car loan (like insurance policy, free accessories) and jack up the EMI. Work out and go for cheaper option.

Last edited by msdivy : 23rd January 2007 at 11:34.
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Old 23rd January 2007, 11:34   #8
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Quote:
Originally Posted by ramki067 View Post
ok. if i take loan from SBI then whts the amount should i pay to the dealer?? How do i go about it?? Pardon my innosence.
Downpayment while booking and remaining payment during/before delivery.
Bank would release the draft for the remaining payment.
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Old 23rd January 2007, 11:46   #9
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So it means i pay in fulll to the dealer and take the vehicle and pay EMIs only to bank? right? SBI a month ago quoted 9% interest and they said any amount can be given if my annual income is 1 lakh+. How about this deal?
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Old 23rd January 2007, 15:13   #10
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Ramki, You will need to pay only the balance amount to the dealer. The bank will give you a sanction letter once you have submitted all the documents. You will then have to sign up the loan agreement and other documents.

Based on the sanction letter, the dealer will tell you what is the balance to be paid. You will need to submit the dealer's letter to the bank and get the DD issued. Then go with the bank's pay order (and bank's rep who will also go with you) and your own DD to the dealer.

Be sure to negotiate with the dealer for discounts on ICE, sunfilm, etc that you want.
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Old 23rd January 2007, 15:57   #11
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Will SBI issue me the on-road loan amount or say 85% of the on-road price?

Sorry wheeliej, the dealer RNS Motors,Yeshwantpur is not willing to give any discounts on anything.. no sunfilms or ICE are free. The dealer rep. Mr. Srinivas Murthy said only mud flaps are free with the vehicle. Is it ok or should i go for another dealer?
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Old 23rd January 2007, 16:51   #12
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ram i have bought 5 months back a wagon-r from RNS near bomanahalli and i had got sunflame and mudflaps and some small accessiors , pls enquire at bomnahalli showroom , contact rep sriram no:9886371491
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Old 23rd January 2007, 16:56   #13
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Hi, it is always a good idea to check with a couple of dealers when finalising for car purchase. it gives you better negotiating power and you can play one off against the other. Call up a couple of other dealers and enquire about the on-road price and also ask for bank contact details; most dealers have tied up with one or two bankers and their customers may be entitled to special deals.

Banks will normally finance only 85-90% of the ex-showroom price; which means that you will have to raise funds for 10-15% of ex-showroom price + taxes + insurance + service charges. But I hear that SBI does provide finance for on-road price, but again, you will have to negotiate with the DSA's (direct sales agents for banks).

Since you have finalised on the car that you are looking for; ask RNS for a quote for the same so that you can contact a bank/finance company for the loan; negotiate and start the process for your loan (without naming a dealer) and then approach different dealers telling them that you can close the deal within a couple of days and see what kind of response you get. Try to hit the dealers on 29th of Jan when they are keen to close sales for month-end.

Since we are still in January, you will also have to ensure that they dont palm you off with a 2006 manufactured vehicle. On the other hand, If you are not worried about 2006 vehicle (i.e., if you plan on owning that car for a long time like 6-7 years), find out which dealer still has stock of 2006 vehicle and ask for a discount on that.

All the best.
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Old 23rd January 2007, 16:56   #14
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Quote:
Originally Posted by ramki067 View Post
Will SBI issue me the on-road loan amount or say 85% of the on-road price?
That depends on your profile. Negotiate and wait. If you know the manager, then it will be easy.

Quote:
Originally Posted by ramki067 View Post
Sorry wheeliej, the dealer RNS Motors,Yeshwantpur is not willing to give any discounts on anything.. no sunfilms or ICE are free. The dealer rep. Mr. Srinivas Murthy said only mud flaps are free with the vehicle. Is it ok or should i go for another dealer?
I would suggest you get quote from all dealers in Bangalore and then select the dealer.
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Old 23rd January 2007, 18:02   #15
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Hi, I just took a car loan from SBT for my new car. The loan amount was 4 lakhs and the payment term is 36 months.
1. For your information, the loan interest rate for nationalized banks vary depending on the term of pre-payment. For e.g., for SBT, for a term of 36 months or less, the interest rate is 9.5%, whereas it goes upto 10% if the term is between 36 and 60 months. So, please verify with SBI, regarding the interest rate for your convenient repayment term.
2. The processing fees for these nationalized banks vary from 0.5% to 1% of the loan amt (based on data from SBI, SBT and Corporation bank). There may be discounts and offers on this. At SBT, it was 0.5%.
3. Regarding the loan amount, SBT has provision to give you loan upto 20 times the monthly take home salary. (Please verify this, as it may vary)
4. The nationalised banks dont charge any pre-payment penalty (data from SBI, SBT and Corporation bank). You may close the loam the next day also, if you want.
5. While paying the EMI, there are two options (EMI in advance or arrears). Make sure that you get the correct information from multiple banks. As somebody else suggested, it is always better to get EMI/lakh for the loan term.

Now, once I finalized the vehicle, this is what I did for getting the loan
1. Get the invoice from the dealer with the exact split-up of ex-showroom price and other charges.
2. With the invoice and other documents to prove your income/identity and guaranteer (if required), approach the bank where you want to take the loan. Specify the loan amt in their application, submit the docs and the bank will issue a DD to the dealer in one or two days, after you sign the loan agreement and some other forms for hypothetication.
3. The DD will be given to the dealer and you will get the order booking form from the dealer with the loan details and other discount details (b/w you and dealer)
4. If you have not paid the full cash/cheque while getting the invoice, pay the remaining cash before vehicle registration/delivery.
Hope this helps..
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