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Old 9th July 2007, 20:56   #16
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Before jumping to conclusions as to whether the palio is considered a decent buy or not, let us first see which bank offers 7 year loan on what car. to my knowledge, i can only think of the Hondas & the premium marutis/hyundais since these cars have resale value even after 5 years, the same cannot be said of the palio or the TATA, am i right ?
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Old 9th July 2007, 21:25   #17
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Hey sqwall,

I had a chance to talk to these finance guys. He told me that the max tenure for any cars in A,B,B+ segment is 5yrs and for C and D segment it is up to 7yrs. I really wonder if any one has got the loan for 7 yrs for A,B,B+ segment cars

With Best Regards
Ravi
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Old 9th July 2007, 21:39   #18
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Quote:
Originally Posted by Jaggu View Post
banks look at resale and residual value and both of them are bad in Palio's case and hence the issue.
Slightly OT: Popular banks in the US like Bank of America and Citi do not finance for Suzuki and Daewoo cars. I can understand their take on Daewoo though.
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Old 9th July 2007, 21:44   #19
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Most of the banks(as far as I know) offer Auto loans for a maximum duration for 5 yrs.. Only SBI offers it for 7 years.. I think your agent has surely taken you for a ride.. they do tell all sorts of stories to get the buyer fall into their trap.. Most probably your agent wants to convince you into taking a 5 yr loan since he cant offer 7yr loan..

All the loans are almost same except the home loans which have lower interest rate..
therefore take my advice- it makes more sense to buy a car on a personal loan rather than an Auto loan.. I am telling this from my own personal experience.. I did a lot of research on loans before buying my car as well as bike..

Firstly the interest rates are almost same for Personal Loan and Auto loans. Your agent may misguide you with higher rate in either case.. so try 2-3 agents and 2-3 banks.. You can even bargain the intrest rates in case of private banks..

Secondly, if you buy your car on a personal loan, the car will not be hypothicated to the bank.. Thus if you ever want to sell it before or after the loan term ends, it will be very hassle free an convinient.. Selling hypothicated vehicles is more cumbersome- either you have to prepay the loan to dehypothicate the vehicle or you have to transfer the loan to the new buyer(Senior guys, please share your experience on this)..

Thirdly After the Car loan ends you will have to run to the RTO to dehypothicate your vehicle and mind it that there are additional fees to be paid to dehypothicate a vehicle.. Moreover you need to dehypothicate the vehicle within a certain time period(which is a few months I believe) from the issue of NOC by the bank for the vehicle.. So if you donot do it in the given time you might need to get another NOC while dehypothicating it in the future..

Fourth-The processing fees for personal loans are fixed irrespective of the amount.. Last year it was Rs500 for ICICI bank for any amount of Personal loan.. whereas for Auto loans it is a percentage of the loan amount..

Fifth- You can actually go for OTR price incase of a personal loan and you can even go 20-30k extra for the accesories where as in case of Auto loans it is always 70%-90% of the Ex-showroom price.. thus requiring huge down payment..

Sixth- you need to pay advance EMI in case of most of the banks where as no advance EMI/downpayment is required for personal loans..

Finally personal loan is solely basd on your monthly income where as auto loans have many more factors involved and more complex..

Also keep in mind these points-

Private banks have hidden clause that make the life difficult for customers.. e.g. private banks charge huge pre-payment fees which can be upto 4%.
SBI charges daily reducing intrest rates which results into lower EMIs as compared to monthly reducing loans of private banks..
So dont rely simply on the figures ask the agent to provide the EMI per Lakh figure for the loan tenure you are looking for.. It will vary for the same intrest rate depending the type of method the bank employs to calculate the intrest(Daily/monthly/yearly reducing)..

Last but not the least, donot allow the bank to dictate your choice of car.. Palio is an excellent car and you will never regret buying a Palio.. A car is not meant to be bought for its resale value.. A car has to be a good car in the first place.. Stocks are bought for resale not cars..
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Old 10th July 2007, 00:21   #20
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Quote:
Originally Posted by huntrz View Post
Firstly the interest rates are almost same for Personal Loan and Auto loans. Your agent may misguide you with higher rate in either case.. so try 2-3 agents and 2-3 banks.. You can even bargain the intrest rates in case of private banks..
This is absolutely wrong... personal loan rates are around 14% whereas one can easily negotiate an auto loan down to 11% or so.
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Old 10th July 2007, 00:24   #21
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@esteem_lover, about two weeks back my colleague got his wagon r financed for 7 years.

Yes personal loan rates are always 4-5% higher.

I guess Ill go get my car soon then :-)
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Old 10th July 2007, 02:31   #22
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We have some horrible experiences with Fiat. Zak (SpeedZak) would know better. I suggest you to be very careful while choosing your car.

Our family still love Fiats and they are waiting for some new cars to be launched soon. No! They didn't like the Stile!
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Old 10th July 2007, 02:35   #23
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Must be a SBI only policy! I just bought home a Fiat palio adventure through Prerana motors and was financed by TMFL,i was offered finance all the way to 7 years.
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Old 10th July 2007, 03:11   #24
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Damn, 11% interest rate for auto purchase?? Thats the rate people with bad credit history get in the US.
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Old 10th July 2007, 08:18   #25
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Quote:
Originally Posted by Mayavi View Post
Damn, 11% interest rate for auto purchase?? Thats the rate people with bad credit history get in the US.
One shouldn't compare US interest Rates with Indian Interest rates. Japanese rates are the lowest while indian is high but southamerican countries have much higher interest rates.
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Old 10th July 2007, 08:59   #26
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Quote:
Originally Posted by ravikn View Post
Hey sqwall,

I had a chance to talk to these finance guys. He told me that the max tenure for any cars in A,B,B+ segment is 5yrs and for C and D segment it is up to 7yrs. I really wonder if any one has got the loan for 7 yrs for A,B,B+ segment cars

With Best Regards
Ravi
I have got a loan of 4.5 lakhs from SBI for 7 year tenure for my Swift VDi. It is supposed to be in B+, am I right?
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Old 10th July 2007, 09:32   #27
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Considering the bad resale of the Palio, this is hardly surprising. Say you default on your loan amount, the bank may be worried that the car is worth less than the principal amount due on it.

Quote:
it makes more sense to buy a car on a personal loan rather than an Auto loan..
Thats a first! I dont agree with this; Personal loan interest rates are far higher than car loans, for the simple reason that the car itself serves as collateral security.
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Old 10th July 2007, 09:41   #28
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Quote:
Originally Posted by sqwall View Post
@esteem_lover, about two weeks back my colleague got his wagon r financed for 7 years.

Thank you sqwall.

Quote:
Firstly the interest rates are almost same for Personal Loan and Auto loans. Your agent may misguide you with higher rate in either case.. so try 2-3 agents and 2-3 banks.. You can even bargain the intrest rates in case of private banks..
Could someone put up the interest rates for both these loans please ?
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Old 10th July 2007, 10:01   #29
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Quote:
Originally Posted by sqwall View Post
I was taken aback by this silly comment.
Nothing silly about it. Imagine you default the loan payment after, say 2 years. What does bank do? Sieze a car that is hardly worth 2 lakhs?

Quote:
Originally Posted by sqwall View Post
Is it true that Palio has a bad rapo with banks?
If you had done the reserch before finalizing on Palio, this question doesn't make sense. If not, please do so.
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Old 10th July 2007, 10:53   #30
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Quote:
Originally Posted by esteem_lover View Post
let us first see which bank offers 7 year loan on what car. to my knowledge, i can only think of the Hondas & the premium marutis/hyundais since these cars have resale value even after 5 years, the same cannot be said of the palio or the TATA, am i right ?
I can say you are wrong here John. My friends Palio 1.6 Sport bought at about the same time as mine was funded for an On-Road price of around Rs. 5,30,000/- (Principal @ 90% of on-road price comes to Rs. 4,77,000) for 7 years at 9.75% interest (IIRC) and he is paying an EMI of Rs. 7,857/- for 7 years.
EDIT: Even my elder brothers Getz is financed for 7 years through SBI and my cousins Santro is for a 7 year loan too!

So can we infer that private banks have the hassle whereas banks like SBI, Bank of _____ (a particular state) do not care for what car you buy!

@ huntrz only a DSA for a certain bank will make a statement which says "ROI for a Personal loan and a Car loan are the same" There is a LOT of difference!

Btw to all, there is a route to avoid the DSA route and nationalised banks is the way to go here. Banks like ICICI are big cheats and I say lets stay away from them. Nationalised banks have their share of hassles initially but then you can sort out everything by keeping your cool. I have heaped lots of benefits by choosing this approach and all the cars in my family except one Santro are funded by SBI! That makes it 3 cars to be funded by the bank.
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