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Old 10th June 2005, 13:12   #31
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I have an active car loan and a house loan, both from StanC .. I went for them since they were giving me the best overall package that suited my EMI and repayment terms.

The only grouse is slow response time .. they do respond , but you gotta chase them relentlessly ..
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Old 10th June 2005, 13:22   #32
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ooops .. i forgot .. i also have a personal loan from StanC .. no issues there too ..

life is so full of loans
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Old 13th June 2005, 12:59   #33
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hey all.. this is my first visit and post on this forum...

well, i would like to just get some lead on how to get the interest rate down..?

I am from mumbai and i have booked a Maruti Swift VXi with ABS, i am looking for a good financing now.

Citibank/Icici seems to be giving in 9.5% rate of interest, how do I approach these guys for a lower rate of interest.

Citibank is my salaried account. So i am preffering for citibank.
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Old 18th July 2005, 14:37   #34
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Default Car loan finally

.. have been waiting for the red SWIFT zxi for ages now and here is an update on my loan as well as the delivery..

The dealers at maruti ( sagar auto, bangalore) told me that they will give my car in the maruti finance quota and i have to get the loan from them only...their best interest rate was 8.25%. How can they have quotas for pete's sake to add more controversy to the huge bookings that has already happened.

Since i had booked the car on 19th May, i argued that if they put this condition i will be paying around 6K premium if i chose Maruti finance and there were better finances available and told them that its a nice way to chop money..


The guy spoke to his manager ( apparently!) and has told me that i can go for a finance of my choice.. have gone with ICICI for the same and here is the deal..

Model: SWIFT Zxi
Down payment: Abt 1.65 Lakhs
Tenor: 4 years
Loan Amt: 4 Lakhs ( 1st installment has to be paid imm)
Monthly EMI: 9656 Rs
Bank: ICICI
Interest rate: 7.75% ( it is the least for corporates they say!)
Pre closure penalty: 3 to 4 %
Interest amt paid per year: Around 15.5K per year


Have been told that by thursday morning i wud be gettin the Delivery..hope they dont mess with it..

Cheers

Hurry Home

Last edited by muni : 18th July 2005 at 14:41.
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Old 18th July 2005, 15:26   #35
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congratulations buddy, ur waiting period is nearing its end. i've also availed ICICI car finance (a satisfied ICICI customer- home loan included). For 4.1 L 5 Yrs EMI is 8331.

viv
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Old 22nd July 2005, 10:57   #36
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My fiancee has taken a loan from ICICI for booking her Swift Vxi (without ABS) model. She got a rate of 2014/lac for a 5 year tenure. 90% finance. Not bad huh?

By the way, the dealer is charging some 2K odd as "insurance charges". What's the deal with that?

-- Harish
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Old 13th September 2005, 17:08   #37
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Default Company lease car

What are the pros and cons of taking a loan from the company you work in ..

It's like, the car is bought in the name of the company,
Company pays for the purchase of the car,
You pay a lease rental (EMI) for a certain period (3 to 4 years),
Pay a residual value at the end of the EMI period and transfer the car in your name (you obviously become the second owner).

I understand that you also get a hefty tax benefit on the EMI you pay, since it is not reflected as taxable income in your salary.
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Old 13th September 2005, 18:47   #38
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Quote:
Originally Posted by riddlerr
hey all.. this is my first visit and post on this forum...

well, i would like to just get some lead on how to get the interest rate down..?

I am from mumbai and i have booked a Maruti Swift VXi with ABS, i am looking for a good financing now.

Citibank/Icici seems to be giving in 9.5% rate of interest, how do I approach these guys for a lower rate of interest.

Citibank is my salaried account. So i am preffering for citibank.
Depending on how you negotiate and what credit cards, company you work for, you may bring this down as to as low as 7.5 %. Some companies (M&M for one), deal directly with the financing companies and offer you a good 7% deal for purchase of their Scorpio.
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Old 14th September 2005, 06:27   #39
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Default the best

deal we got was at 7.75% and that was on a corporate discount. What you can do is to tell them that Bank A is offering for so much and u expect them to give atleast the same rate since you have an account in citibank. It can work as at the end of the day, they have deadlines to the no of loans they are gonna sanction. Also inquire about prepayment penalty, processing fees before hand.

Cheers
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Old 14th September 2005, 12:22   #40
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Default Ps & Qs

Quote:
Originally Posted by shuvc
What are the pros and cons of taking a loan from the company you work in ..

It's like, the car is bought in the name of the company,
Company pays for the purchase of the car,
You pay a lease rental (EMI) for a certain period (3 to 4 years),
Pay a residual value at the end of the EMI period and transfer the car in your name (you obviously become the second owner).

I understand that you also get a hefty tax benefit on the EMI you pay, since it is not reflected as taxable income in your salary.
Hi there! Lemme offer some help.

Advantages
For you:
- Tax benefit. But that will depend how you structure your payment. In my case, I was due a raise of 10k and instead bought the car on Company's name. This way, I do not get a raise and so tax does not go up.
For Co:
- Depreciation, specially if bought befor Sept as Co gets to claim more. Fuel/Driver/Maint is all booked under business expence (allowing for FBT of course )

Disadvnatages
For you:
Insurance. YOU are paying everything (in proxy though) and get no NCB at the end of 4~5 years when the car does get transferred. Of course the IDV is less but still you had to cough-up higher insurance cost initially which will not benifit you for the next purchase.
For Co:
FBT and worse still, if the Co decided that you share the FBT component.

Another drawback could be swithing jobs and Co - ownership could become an issue.

Cheers
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Old 14th September 2005, 13:56   #41
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Quote:
Originally Posted by Xsailor
Advantages
For you:
- Tax benefit. But that will depend how you structure your payment. In my case, I was due a raise of 10k and instead bought the car on Company's name. This way, I do not get a raise and so tax does not go up.
For Co:
- Depreciation, specially if bought befor Sept as Co gets to claim more. Fuel/Driver/Maint is all booked under business expence (allowing for FBT of course )
Thanks @Xsailor .. pretty structured feedback ..
In my case I will be able to avail of the Tax benefit .. substantial ..
Though I'm not sure whether I'll be able to claim fuel/maint ... so that they are deducted from the net taxable income ...

Quote:
Originally Posted by Xsailor
Disadvnatages
For you:
Insurance. YOU are paying everything (in proxy though) and get no NCB at the end of 4~5 years when the car does get transferred. Of course the IDV is less but still you had to cough-up higher insurance cost initially which will not benifit you for the next purchase.
For Co:
FBT and worse still, if the Co decided that you share the FBT component.

Another drawback could be swithing jobs and Co - ownership could become an issue.

Cheers
However, if say, the insurance paid is deducted from the taxable income , then wouldn't the tax saved therein offset the NCB somewhat ?

My company has already drawn up a scheme wherein the FBT will be passed on to the employee ... inspite of which, it seems the total cost of the car will be less than that in case of taking an external loan ..

Switching jobs - strangely even in the current volatile job market I have no plans to switch in a looooong time to come (hope my boss doesn't read this) !


So overall, company leased cars are financially a good deal, eh ?
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Old 14th September 2005, 16:30   #42
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Regarding gettin a car with the company's ownership:

Hey amit ( sailor man), Useful details there...changing jobs can be a pain/disadvantage for sure with the ownership transfer issue.

And have heard that some companies(was it GE!) take care of the life time road tax when u buy a car thru the company ( It wud be a gud deal i guess)

But could not follow the IDV,FBT and NCB jargon..can u please expand them so that laymen like us who dont bother about the salary components(?) dont hav to google them and understand.


Thanks

Last edited by muni : 14th September 2005 at 16:34.
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Old 14th September 2005, 16:42   #43
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Quote:
Originally Posted by muni
Hey amit ( sailor man), Useful details there...changing jobs can be a pain/disadvantage for sure with the ownership transfer issue.
Yes it could be a pain .. but if you plan it well and say leave 3yrs after purchase, the foreclosure price (to end the loan and transfer the car in your name) you will pay might be less than the market price of the car ... since the company depreciates the car to zero value in around 5 yrs ...

Quote:
Originally Posted by muni
But could not follow the IDV,FBT and NCB jargon..
Am not too conversant with the minute details but ... this is my understanding ..

IDV - Individual's/Insured's Declared Value : I believe the value on which the insurance is calculated

FBT - Fringe benefit tax : Since the car is officially a company car leased to you, as per this years budget, it would attract that tax. Companies are planning to pass it on the the employees as a % of the EMI.

NCB - No claim bonus : It's something like when you go for a renewal of insurance, if you have not claimed insurance the previous year, then you get a benefit .. translates to a rebate on the insurance you have to pay that year .. I understand that if you are buying a new car , you can carry forward the NCB of the previous car .. not sure about the details though ..
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Old 15th September 2005, 09:45   #44
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Default thanks ..

@shuv: Thanks for filling in the details of NCB,FBT and IDV..now it makes sense..
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Old 15th September 2005, 16:18   #45
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@shuvc
All good, mate, all good. Nicely put.

Some more...
I work for/with my BIL. Pvt Ltd Co so being directors, we all draw salaries (However, BIL is the asli owner and self work for him).
In my case (Swift bough in June), the Co takes a loan from bank upto 90%. This Loan entered in Co books as Liability and Car Ex showroom price as Asset.

Margin money/Down payment (DP): This will cover actual Down payment plus Regn plus RT plus Insurance. Since Co is owner, Co has option to Xfer insurance from another vehicle (In my case, we Xfered from OHC which was also in Co name. This way the Co saved a packet on upfront insurance since we had NCB of 50%). The Insurance and Regn get booked as Business expense. DP is added to Asset class (Who actually pays DP? You can not since you are not owner. Best is to kick-off any Bonuses coming your way. I let go the Diwali bonus partially towards DP. Now this is an internal deal and since you rcvd no bonus, Tax Liability TL comes down).
OHC was 6 years old so the IDV was so small that new premia was negligible. H'ever, since NCB missing, Co paid 50% more. In my case, this was footed by the Co.

EMIs: EMIs get paid by Co and since you receive no added wage, your TL is lesser. Now, each EMI broken down towards Princi+Interest. Princi gets booked towards nullifying the Loan liability and Interest gets treated as business expense. Since expenses are booked on interest, company saves on taxes too since profit comes down. Co also claims additional depreciation on the Asset on the books also in Co name with pays the EMI and I do not take the proposed wage hike. The Co enters the EMI as business expenses (Principle towards reducing Loan liability and Interest towards expenses).

Tenure: Towards the end of loan tenure (in my case, 4 years), the Car will have a much smaller Book Value due depreciation (abt 165K for Swift VXi, if I am not mistaken). Cars stays with Co till such time (and Co keeps claiming depreciation on it) that you are ready to buy-back from the Co. If you choose, you may leave it with the Co or sell it off and use the funds towards DP for another new car (I intend to do just that). Alternatively, you can pay by Cheque, to the Co the book value and get the car transferred in your name.

All the above was rather painless till Mr. FM screwed our happiness with the Fringe Benefit Tax (FBT). The area is still a bit grey for me and shall revert with more details.
As my job profile is not purely on Employee~Employer relationship (Jeeja-Saala in fact), lots of stuff gets managed without negotiating with the HR deptt. (which incidentally does not exist in a small Co like ours).

Cheers

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