Regarding Corporate Discount!

[ramki067]

Hi all,
I've chosen to opt for loan from Canara Bank,my salary bank.From which i wish to obtain a loan for my car Alto purchase(new). My question is if i take a loan from Canara bank, will i be eligible for Corporate Discount..company is BHEL. I'm a little confused on this corporate discount,how does it work when i take a loan from Canara Bank which is not related to showroom guys? Please help me.

Thanks and Rrds,
Ramki.

[itwasntme]

Hi Ramki067

As far as I am aware, Corporate Discount is not linked to the financier at all. It is solely based on your (or your spouse's) employment and is linked with the number of cars (of that manufacturer) that has been bought by employees of BHEL and/or by the BHEL itself.

Every manufacturer has different rules for grading corporates and the higher the number by the particular corporate, the higher is the discount added to the retail discount.

Keep in mind that at the end of the day, it's purely a sales gimmick so bargain very hard with your nearby Suzuki dealers! Threaten to walk away - it is YOUR money at the end of the day and you have the choice to negotiate for the best deal.

Happy buying!

BR,
ItWasntMe

[ramki067]

Thanks for the reply,itwasntme.
Thereby i will be getting the discount based on the sale i've made to the dealer right? If yes..i'll be enjoying a good 3-4 K discount.... I'm planning for the Diwali purchase.

[phamilyman]

The corporate discount should apply to you. Dealers in Mumbai have given me logic like it should be public ltd (govt/listed firms). my present employer, which is a 100% subsidiary of an overseas firm (although very big in terms of profit) doesnt qualify. BHEL should.

[Zappo]

Corporate discounts have no thumb rules as such. Just as there is no generalized global list. However, the corporate discount has nothing to do with the banks. Its given out by the manufacturer (predominantly). These manufacturers have a list of corporate entities whom they extend the discount. Mostly these are the big listed companies and the Navratna PSUs. So even if you do not take the loan from your corporate banker you will still get the corporate discount if BHEL is in the list of Maruti (which it should be). Again, the amount of discount extended may/will vary for every corporate.

However banks provide you special interest rates, based on your companies clout, which could be 50 to 100 basis points less than what the regular customers get. Remember, a bank will always tell you the rack rates (much more than the actual going rate). You should strive to go via a DSA. Of course you have to be shrewd enough otherwise DSAs only add to the muck. However if you play your cards right DSAs get you a lower rate than the rack rates that the bank advertises.

So at the end of the day what you need to do is to find out what is the best rate Canara is willing to offer to you. Then shop around a little. Talk to a couple of DSAs and let them know you are looking for a car loan. They will fall over themselves calling you up and woeing you to get the business. Pit them against each other. Let them know that X is giving you a better deal than him. He will try to better that. Again play the game against Y with the rate that the earlier guy gave you. You will be surprised that the rates are often lower than what your corporate banker is willing to provide you.

For corporate discount, dealer discount and any other discounts you need to play the same game with the dealerships. This way you will get the best rate from the dealers. Finally do not forget to ask for finance discount from your financier.

[ramki067]

Originally Posted by Zappo

Corporate discounts have no thumb rules as such. Just as there is no generalized global list. However, the corporate discount has nothing to do with the banks. Its given out by the manufacturer (predominantly). These manufacturers have a list of corporate entities whom they extend the discount. Mostly these are the big listed companies and the Navratna PSUs. So even if you do not take the loan from your corporate banker you will still get the corporate discount if BHEL is in the list of Maruti (which it should be). Again, the amount of discount extended may/will vary for every corporate.

However banks provide you special interest rates, based on your companies clout, which could be 50 to 100 basis points less than what the regular customers get. Remember, a bank will always tell you the rack rates (much more than the actual going rate). You should strive to go via a DSA. Of course you have to be shrewd enough otherwise DSAs only add to the muck. However if you play your cards right DSAs get you a lower rate than the rack rates that the bank advertises.

So at the end of the day what you need to do is to find out what is the best rate Canara is willing to offer to you. Then shop around a little. Talk to a couple of DSAs and let them know you are looking for a car loan. They will fall over themselves calling you up and woeing you to get the business. Pit them against each other. Let them know that X is giving you a better deal than him. He will try to better that. Again play the game against Y with the rate that the earlier guy gave you. You will be surprised that the rates are often lower than what your corporate banker is willing to provide you.

For corporate discount, dealer discount and any other discounts you need to play the same game with the dealerships. This way you will get the best rate from the dealers. Finally do not forget to ask for finance discount from your financier.

Zappo,
Thanks for the suggestions, however i've more doubts now. Please excuse me for my innocence.
1. Dealer discount is the one which they say at present 11K discount on Alto? or is it anything else. I thought this is given by Maruti. If this is so, then does bargaining with different dealers fetch even more discount?
2. What is this finance discount. How do i go about finance discount from my financier,i.e., Canara bank.They are offering 11.75 interest for me, and this is the same when you see even in their websites.No change. Please explain.
Thanks in advance.

Regards,
Ramki.

[itwasntme]

Ramki,

I'll let Zappo add his valued advice but I took a recent car loan for me after researching the PS banks like PNB, Canara, IOB etc. 11.75% is a decent rate in my opinion. Finance discount from PS banks looks unlikely as it originates from the financier like ICICI, HDFC etc because their rates are a lot higher anyway! That's why they throw in some 'finance discount' to make the buyer feel good and also distort the actual interest rate.

Stay away from such discounts and stick to the transparent interest rate offers. They are always easy to calculate and offer us the best deal!

ItWasntMe

[megger]

I think the car dealers get 1 EMI (or whatever) as commission from the finance company if you go through car dealer to their preferred car finance company. They roll it back to you sometimes to make the deal attractive.

[ramki067]

Zappo any suggestions regarding my previous post?

[Zappo]

Originally Posted by ramki067

Zappo,
Thanks for the suggestions, however i've more doubts now. Please excuse me for my innocence.
1. Dealer discount is the one which they say at present 11K discount on Alto? or is it anything else. I thought this is given by Maruti. If this is so, then does bargaining with different dealers fetch even more discount?
2. What is this finance discount. How do i go about finance discount from my financier,i.e., Canara bank.They are offering 11.75 interest for me, and this is the same when you see even in their websites.No change. Please explain.
Thanks in advance.

Regards,
Ramki.

Oh, I missed out on your post earlier. Let me answer them in the same order as your questions,

1. Yes, that 11k is most probably the dealer discount. Now, many a times they pit in everything into one and give a consolidated discount. In actual terms Dealer Discounts are extended by the dealers to push stock. They have a margin for each car sold. From that they may give you some discount.

Say a dealer makes 15000 rupees by selling a car. He may very well give you a discount of 10000 rupees if you buy the car from him. This is the dealer discount. This may vary from dealership to dealership. Every dealer may not give you the same dealer discount.

However, it is possible that if you did not ask for it the salesman figured that you are unaware of various other discounts possible on the final figure. So he very shrewdly adds another 5000 rupees as the corporate discount with the dealer discount (if you buy the car then he will ask for the necessary documents for this part of the deal) to show you a big discount figure.

So at the end of the day you have to shop around to find the maximum discount that you can extract from the dealer. Ask your dealer that you also need the corporate discount, so what will be the final figure of discount? Either he will let you know that its already included or else you will get some more of discount.

2. Finance discount is something which is primarily seen amongst the private banks. If you go through them for your loan you get some amount back as finance discount. This ranges from 1.5% to 3.5% (at least as I have seen/heard). I do not know whether Canara will give you any finance discount though.

So, finally here is the strategy that may help you cut out of all the haze.

* For discounts, negotiate hard with the dealers. Go to each of them and let them know that you are also talking to the others. Drop some figures, even if a little exaggerated, as the quote you got from a competing dealer. And then fish for what more he can give you. Try dealer discount, finance discount, corporate discount, any other discounts in that order.

* Approach a good few bank DSAs and fish for the best rates. Again reel out some figures and ask them to better it to get your business. Always ask them what will be the exact EMI for your loan amount and tenure. Once you think you have got the best rate, ask for the finance discount. While doing this remember to ask and ensure that they do not pass off some processing fee or professional services fee or some similar charges under one pretext or the other.

Its a bit laborious but then may fetch you the best deal as well.

[ramki067]

Thanks Zappo, will keep all this in mind when i start hunting in October.

I saw the add in local newspaper stating discounts on all Maruti Cars which specified all the dealers in Bangalore..thereby got confused whether its manufacturer given or dealer given. Now no confusion,thanks for that. Cheers.

[psmith]

I recently booked a Punto. The dealer was earlier offering a corporate discount.
Since then however, Fiat has announced free insurance and extended warranty on Punto.
Now the dealer says that the corporate discount will be much lower as the dealer part of the corporate discount
will not be available because they are letting go of the insurance.
I am not convinced as I was under the impression that the corporate discount was offered predominantly,
if not entirely, by the car manufacturer and not the dealer.

My question is who really offers the corporate discount.

[GTO]

Psmith : Corporate discounts are given out of available profit margins (whether dealer or manufacturer). If the product is discounted, the corporate discount can go lower (though not always).

[psmith]

Originally Posted by GTO

Psmith : Corporate discounts are given out of available profit margins (whether dealer or manufacturer). If the product is discounted, the corporate discount can go lower (though not always).

Thanks GTO for that piece of info.

I had called the Fiat Helpline and they told me that the corp discount for Punto ranged from 4k to 8k whereas the dealer
had earlier mentioned it be from 6k to 12k.
I went to the dealer today and saw a spreadsheet which showed the difference in the two values to be the dealer's contribution.
This is the part that is not available anymore.