ARTICLE: How to get the lowest EMI & the best Finance Deal

anandpadhye · 5th October 2007, 20:39

Excellent thread.

I always talk to the banks in terms of per lack per month EMI and that makes wonders.

Also, negotiations are best done towards the end of the month as mentioned in the opening post. Dealers are willing to go that extra mile to achive the monthly numbers...

And I think last 2 weeks of November will be the best time as people (resale value types) want to have new year registrations and also Diwali is over by then so sales are slow...

Sahil · 8th October 2007, 13:27

Anil Ambani is all set to shake up the car financing rates come Oct 18th. As promised in todays Economic Times, the company will provide the lowest rates.

I am holding my paper work with my financier till the 18th. Atleast i hope to get some benefit of the 3 month waiting period on the car !

GTO · 8th October 2007, 15:14

Reliance entering car finance and shaking the market up? That, I am eagerly waiting for.

doctorque · 22nd October 2007, 19:18

reliance is already here and they are definately very aggresive in their approach, they are also ready to break any ICICI quote, which is the best car financing bank.
any finance related issues , you guys are free to call me for advise...
its part of my job.

Sahil · 23rd October 2007, 03:44

doctorque- I am currently arranging the financing for my car, whats the best rate on a 3 year loan on reducing balance ?

prabuddhadg · 23rd October 2007, 10:00

Quote:

Originally Posted by doctorque

reliance is already here and they are definately very aggresive in their approach, they are also ready to break any ICICI quote, which is the best car financing bank.
any finance related issues , you guys are free to call me for advise...
its part of my job.

I beg to differ doctorque. ICICI is NOT the best car financing bank. They get their DSA's to do all the dirty work. They poach customers from other banks with false promises of lower interest rates and better emi's and when the customer realises what he has got himself into, it is too late.

If you want transparent service, and competetive rates, go to the nationalised banks, SBI for instance.

Sahil · 24th October 2007, 17:15

Got a qoute of 9.6% on reducing balance on a 3years loan of 39lakhs... are there any better rates around? Would be great if someone could give me contact nos for good finance agents in Mumbai asap.

GTO · 24th October 2007, 17:37

@ Sahil : Try the nationalised bank that you may have a business account with. Bargain with the branch manager.

Sahil · 24th October 2007, 17:57

GTO- I did check with them, their rates were much higher.
Do you get your financing done outside or your nationalised bank?

tushar79 · 8th November 2007, 11:55

Quote:

Originally Posted by rohitbagai

4% is of the amount of loan that we take up and not the interest income. Suppose I take up a loan of 4,00,000. I will get a discount of 16000 for sure. Also most ppl dont know that there is a discount on the interest we pay too. If the total interest we pay is 1,50,000 the DSA's of many banks give additional discount of 2.5% of it. i.e. Rs. 3750.

SBI is offering me 11.25%
The EMI is Rs5,193 [Rs 2 lakh for 4 years]

The dealer is offering ICICI's 13.75% (+3.5% finance payout)
The EMI quoted is Rs5,171

Does that mean the finance payouts negate the PSUs' lower interest rate advantage? Or is there something wrong here?

Also, does daily reducing/yearly reducing matter when the EMi is lower?

tsk1979 · 8th November 2007, 12:01

Better stick with PSU. 20rs/month extra is not worth goons knocking on your doors.

balugita · 20th November 2007, 18:38

Quote:

Originally Posted by tushar79

SBI is offering me 11.25%
The EMI is Rs5,193 [Rs 2 lakh for 4 years]

The dealer is offering ICICI's 13.75% (+3.5% finance payout)
The EMI quoted is Rs5,171

Does that mean the finance payouts negate the PSUs' lower interest rate advantage? Or is there something wrong here?

Also, does daily reducing/yearly reducing matter when the EMi is lower?

wrong calculation on icici emi for 2lakhs for 4 years its comes Rs.5440/- @13.75% SBI emi is correct Rs.5193/- @11.25%
Please check once again at your end.
balu

tushar79 · 13th January 2008, 15:26

Quote:

Originally Posted by balugita

wrong calculation on icici emi for 2lakhs for 4 years its comes Rs.5440/- @13.75% SBI emi is correct Rs.5193/- @11.25%
Please check once again at your end.
balu

When the finance payout is adjusted in EMIs, not downpayment

nishantgandhi · 21st January 2008, 15:54

Car finance can become complex because of the financing deal between the car dealer and the bank.

It will help you negotiate better if you follow the process below:

1) Finalize your decision on the car you want to buy. The interest rates vary from car to car; so, what is available on one car may not be available on another car

2) Fix the amount of vehicle loan you need. Suppose the car costs
Rs 8 lakh on the road and if you are ready to make a down payment of Rs 2 lakh, then freeze your loan requirements at Rs 6 lakh. Interest rates that you get also depend on the loan amount.

3) Ask around for preliminary quotes for the given loan amount for the given car. Freeze on the lowest EMIs that are offered.

4) Now, negotiate on the processing fees. Most times, the processing fees can be waived.

5) Then, start negotiating for cash discounts that can be adjusted against your down payment. The DSAs/dealers will offer to reduce the EMIs, but resist the temptation and insist on a cash discount. Also, the dealer/DSA will offer accessories in lieu of cash discount; again, resist and insist on cash discount.

6) Once you find that the cash discount limit has been reached, you can try for a small freebie on car accessories such as car mats, boot mats etc.

7) Remember to claim your no-claim bonus on the insurance policy for the new car if you have a claim-free record on your existing old car.

(Adopted from Apnaloan.com)

carlover98 · 22nd January 2008, 14:21

Hi all,

I had taken a car loan from HDFC 3 years back at a rate of 6% and they had fixed the EMI for 5 years (Approx Rs 8650 for 4.5 Lakhs for 5 years).

Will my EMI still remain the same till the end or will it change as the bank rates have gone up over the last 3 years? I dont want to get a shock of my life when I go to close my loan after 2 years.

Cheers!!

5th October 2007, 20:39	#61
anandpadhye Distinguished - BHPian Join Date: Apr 2007 Location: Pune Posts: 3,054 Thanked: 3,312 Times	Excellent thread. I always talk to the banks in terms of per lack per month EMI and that makes wonders. Also, negotiations are best done towards the end of the month as mentioned in the opening post. Dealers are willing to go that extra mile to achive the monthly numbers... And I think last 2 weeks of November will be the best time as people (resale value types) want to have new year registrations and also Diwali is over by then so sales are slow...
	() Thanks

8th October 2007, 13:27	#62
Sahil Distinguished - BHPian Join Date: May 2004 Location: Bombay Posts: 6,292 Thanked: 7,607 Times	Reliance to enter Car Financing Anil Ambani is all set to shake up the car financing rates come Oct 18th. As promised in todays Economic Times, the company will provide the lowest rates. I am holding my paper work with my financier till the 18th. Atleast i hope to get some benefit of the 3 month waiting period on the car !
	() Thanks

8th October 2007, 15:14	#63
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,501 Thanked: 300,611 Times View My Garage	Reliance entering car finance and shaking the market up? That, I am eagerly waiting for.
	() Thanks

22nd October 2007, 19:18	#64
doctorque BHPian Join Date: Jun 2007 Location: Mumbai Posts: 565 Thanked: 404 Times	reliance is already here and they are definately very aggresive in their approach, they are also ready to break any ICICI quote, which is the best car financing bank. any finance related issues , you guys are free to call me for advise... its part of my job.
	() Thanks

23rd October 2007, 03:44	#65
Sahil Distinguished - BHPian Join Date: May 2004 Location: Bombay Posts: 6,292 Thanked: 7,607 Times	doctorque- I am currently arranging the financing for my car, whats the best rate on a 3 year loan on reducing balance ?
	() Thanks

24th October 2007, 17:15	#67
Sahil Distinguished - BHPian Join Date: May 2004 Location: Bombay Posts: 6,292 Thanked: 7,607 Times	Got a qoute of 9.6% on reducing balance on a 3years loan of 39lakhs... are there any better rates around? Would be great if someone could give me contact nos for good finance agents in Mumbai asap.
	() Thanks

24th October 2007, 17:37	#68
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,501 Thanked: 300,611 Times View My Garage	@ Sahil : Try the nationalised bank that you may have a business account with. Bargain with the branch manager.
	() Thanks

24th October 2007, 17:57	#69
Sahil Distinguished - BHPian Join Date: May 2004 Location: Bombay Posts: 6,292 Thanked: 7,607 Times	GTO- I did check with them, their rates were much higher. Do you get your financing done outside or your nationalised bank?
	() Thanks

8th November 2007, 12:01	#71
tsk1979 Team-BHP Support Join Date: Feb 2005 Location: San Jose, CA Posts: 23,717 Thanked: 22,825 Times View My Garage	Better stick with PSU. 20rs/month extra is not worth goons knocking on your doors.
	() Thanks

21st January 2008, 15:54	#74
nishantgandhi Senior - BHPian Join Date: Jan 2008 Location: Mumbai Posts: 1,220 Thanked: 156 Times	Car finance can become complex because of the financing deal between the car dealer and the bank. It will help you negotiate better if you follow the process below: 1) Finalize your decision on the car you want to buy. The interest rates vary from car to car; so, what is available on one car may not be available on another car 2) Fix the amount of vehicle loan you need. Suppose the car costs Rs 8 lakh on the road and if you are ready to make a down payment of Rs 2 lakh, then freeze your loan requirements at Rs 6 lakh. Interest rates that you get also depend on the loan amount. 3) Ask around for preliminary quotes for the given loan amount for the given car. Freeze on the lowest EMIs that are offered. 4) Now, negotiate on the processing fees. Most times, the processing fees can be waived. 5) Then, start negotiating for cash discounts that can be adjusted against your down payment. The DSAs/dealers will offer to reduce the EMIs, but resist the temptation and insist on a cash discount. Also, the dealer/DSA will offer accessories in lieu of cash discount; again, resist and insist on cash discount. 6) Once you find that the cash discount limit has been reached, you can try for a small freebie on car accessories such as car mats, boot mats etc. 7) Remember to claim your no-claim bonus on the insurance policy for the new car if you have a claim-free record on your existing old car. (Adopted from Apnaloan.com)
	() Thanks

22nd January 2008, 14:21	#75
carlover98 BHPian Join Date: Jan 2007 Location: Trivandrum Posts: 78 Thanked: 2 Times	Hi all, I had taken a car loan from HDFC 3 years back at a rate of 6% and they had fixed the EMI for 5 years (Approx Rs 8650 for 4.5 Lakhs for 5 years). Will my EMI still remain the same till the end or will it change as the bank rates have gone up over the last 3 years? I dont want to get a shock of my life when I go to close my loan after 2 years. Cheers!!
	() Thanks