Need help in negotiating best price for a new car that I want to buy

[akrish01]

Greetings to everyone.

I need help from fellow T-BHPians on arriving at the best price for my new car purchase.

I’m planning to purchase a new car shortly. I’ve to decide between the Chevrolet Aveo U-VA & the Hyundai Getz 1.1 or 1.3.

Since it is March end, both dealers are offering some discounts.

Step 1 – Bargaining on the on-road price of the vehicle

1)Chevrolet Aveo U-VA 1.2 LS (2007 model – dealer says month of manufacture is Dec 2007)
The On-road price quoted by dealer is Rs. 4,81,250/- (Rs. 4,34,359 + Rs. 16,301 insurance + Rs. 30,562 registration & life tax). The dealer initially offered free insurance + free music system with 2 speakers. I asked the dealer to settle for Rs. 4.50 lakhs on road but he says the best he can do is offer Rs. 20,000/- cash discount, making it Rs. 4.61 lakhs on-road. Is this a good price (approx 4.2% discount)?. But for this price, he’s not giving me the free music system. Should I haggle for it?

2)Chevrolet Aveo U-VA 1.2 LT (2007 model – dealer says month of manufacture is Dec 2007)
The On-road price quoted by dealer is Rs. 5,34,798/- (Rs. 4,73,600 + Rs. 17,774 insurance + Rs. 32,916 registration & life tax). The dealer initially offered free insurance + free music system with 2 speakers. I asked the dealer to settle for Rs. 4.90 lakhs on road but he says the best he can do is offer Rs. 20,000/- cash discount, making it Rs. 5.15 lakhs on-road. The music system is included in this price. Is this a good price (approx 3.7% discount)?

Step – 2 – Bargaining on the finance scheme
The DSA has quoted me the following figures:

1.2 LS
Loan amount = Rs. 3,30,000/-
Loan tenure = 5 years
Interest quoted = 11.75%
Margin money = Rs. 1,51,250/-
1 advance EMI = Rs. 7,323/-
Processing Fee = Rs. 2,450/-
Less discount = Rs. 20,000/-
Actual down payment = Rs. 1,41,023/-

1.2 LT
Loan amount = Rs. 4,00,000/-
Loan tenure = 5 years
Interest quoted = 11.75%
Margin money = Rs. 1,34,798/-
1 advance EMI = Rs. 8,876/-
Processing Fee = Rs. 2,450/-
Less discount = Rs. 20,000/-
Actual down payment = Rs. 1,26,124/-

I’m yet to get quotes from other DSAs/ banks. But after going through several posts on this forum, I have come to understand that I can negotiate on the EMI by at least 5% - say is the figure quoted is Rs. 2,200/- per lakh per month for a 5 year loan, I can expect to bring it down to about Rs. 2,100/- per lakh per month. I hope I have understood correctly. Pls correct me if I’m wrong.

Step – 3 – Asking for a finance payout
I have read on this forum that about 4.5% of the loan amount can be obtained as a finance payout. This works out to Rs. 15,000/- for the 1.2 LS & Rs. 18,000/- for the 1.2 LT. Can I go ahead & start negotiating with the DSA?

Step – 4 – Asking The DSA to pass on a part of his dealer’s commission to me as a discount
I read in the forum that all DSA’s give commissions to the dealers for having them as their preferred agents and that we can ask them to pass on a portion of that as our discount. Can I go ahead with it & start bargaining with the DSA? What figure can i expect for these car prices?

Are there any more discounts or freebies that I can get? Pls advise.

After getting all these discounts, do I reduce them in the down payment or the loan amount? I presume deducting it from the loan amount will be better as we will save interest. Pls advise.

Will be visiting Hyundai dealer tomorrow & will post the figures from there when I have them.

Looking forward eagerly to your valuable responses.

Krishnan

[akrish01]

Come on friends. Pls give me your views. Calling all you finance experts to chip in with your valuable inputs.

regards

Krishnan

[djay99]

Hi Krishnan. If you want to go with Aveo Uva then get finance from PSU banks.
SBI is offering int rate of 11.25% for 5 year tenure with minimum processing fee.
All the payouts and discounts are marketing terms. Stick to lowest interest rate rather than all these stuffs.
From SBI, for a loan of 4lac for 5 year, EMI comes at 8746. You also have option to prepay and partpay with lesser rates.

Also get cash discounts from dealer than freebies. You can buy same stuff from outside at much lesser rates.