Bargaining on new car purchases in India

caliper · 5th July 2007, 11:24

I'm going to buy a new car, and I've been researching the methods that car salemen use. The links are below, and they are very interesting.

One of the methods recommended to fight back is to solicit bids from multiple dealers, preferably by fax. After you get the lowest bid, you give all a chance to beat it.

A few questions/comments:

1) Bargaining- I was told that dealers in India don't entertain bargaining on price. The reason given is that the company feels it would be hurting it's price/brand in the market. Is this true? It would seem strange since bargaining is such a part of buying anything else in Indian life.

2) Accessories- If they won't bargain on price, what about accessories? I.e., don't cut $30k off the price, but give it to me in accessories. But I was told that even if you get the salesman to do that, when it comes time to drive off they'll present you with a bill. You'll go to the agency owner, and then it becomes a he-said, she-said where nobody will take responsibility for saying that the customer is to get X accessories free.

I suppose one way to fight this would be to get a bill in hand for $1 for all the accessories.

3) Four-square- The article on the "four-square" is very interesting. Basically, you ought to be focusing on the price of the car, but salesmen make you look to the monthly payment, which may end up making the total amount paid over time huge.

4) Invoice price- Finally, there's the concept of "invoice price" paid by dealer to the manufacturer. How can we get the invoice price in India? Smart people in the West try to pay a few hundred over invoice. Could you even get the dealer to show the invoice in India?

Links:

Dealerships Rip You Off With The "Four-Square," Here's How To Beat It
http://consumerist.com/consumer/four-square/dealerships-rip-you-off-with-the-four+square-heres-how-to-beat-it-248445.php

Confessions of a Car Salesman
http://www.edmunds.com/advice/buying...2/article.html

http://www.cartransportcentral.com/

http://www.carbuyingtips.com/

http://www.insidercarsecrets.com/buynew.html

DCEite · 5th July 2007, 12:44

Related Article:
http://www.team-bhp.com/forum/buying...ance-deal.html

caliper · 5th July 2007, 18:49

I appreciate the link, but a lower EMI is exactly what I am trying to avoid. That's how they trick you.

If you go in and say you need an EMI of 7500 rs. per month, they'll give that to you. But with possibly high interest and longer loan term, plus no break on the price of the car. So it's a lower monthly, but much more overall.

However, I want to ask about getting the best cash car price.

Has anyone solicited bids from multiple dealers? By fax? If so, how did it go?

vanchi_s · 5th July 2007, 18:56

I couldn't get it through fax but got their (two different dealer) hand written pricing with accessaries. Also, I defined term and loan amount and requested for the EMI. This way I know what I am paying for.

ankit.jhamb · 5th July 2007, 23:14

i dont think there is any problem in bargaining before buying the product .....because you may get a good deal by bargaining with different dealers ...

msdivy · 5th July 2007, 23:34

Quote:

Originally Posted by caliper

2) Accessories- If they won't bargain on price, what about accessories? I.e., don't cut $30k off the price, but give it to me in accessories. But I was told that even if you get the salesman to do that, when it comes time to drive off they'll present you with a bill. You'll go to the agency owner, and then it becomes a he-said, she-said where nobody will take responsibility for saying that the customer is to get X accessories free.

I suppose one way to fight this would be to get a bill in hand for $1 for all the accessories.

I got the list of free-goodies given by the dealer written in the invoice while making the down payment (actually they had a column for this). This is useful for us and also to them to track their promises.

1100D · 6th July 2007, 01:01

Lot of the points in the links are not applicable in India. Firstly there are not many number of cars sold. Secondly the ex-showroom price of a car is fixed. Agreed that one can work up the accessories bit, but then with absence of Multiple dealers for the same brand in a few cities, theres hardly anything to baseline expectations on. Moreover salesmen in the car dealerships in India dont make much money, so it does not even feel right to take it from their kitty.

caliper · 6th July 2007, 10:46

Quote:

Originally Posted by 1100D

Lot of the points in the links are not applicable in India. Firstly there are not many number of cars sold. Secondly the ex-showroom price of a car is fixed. Agreed that one can work up the accessories bit, but then with absence of Multiple dealers for the same brand in a few cities, theres hardly anything to baseline expectations on. Moreover salesmen in the car dealerships in India dont make much money, so it does not even feel right to take it from their kitty.

Is the price of the car fixed by the manufacturer? I.e., do they prevent the dealer from discounting the price by contract? That's probably what they would like you to think, though some have mentioned cases of discounting above.

It's true there are few cities with multiple dealerships, but if you take the region you live as a whole (i.e., "North India"), the savings you could realize might more than pay for 1-2k rs. of petrol/diesel.

As far as salesmen, I hadn't thought about what they are making as much as what the dealer is making. If, by chance, I don't buy from the salesman who gave me a test ride, I'll send him a gift certificate for a hundred rupees in fruit so that I can save tens of thousands of rupees on the price.

Moreover, with the fax bid route, it's hardly more than 15min. of their time to fax a quote over, so I'd say a reduced amount of compensation is plenty.

shobhit15 · 6th July 2007, 12:03

Here is the method I employed when I bought Baleno in 2005. I did not opt for loan and did full down pament.

1. Go to "Dealer 1". Get the quote price.

2. Copy the quote on another sheet of paper but reduce Rs 8 - 10k in it. Lets call this "Quote 1"

3. Go to "Dealer 2". Show him "Quote 1" and get a lower quote, "Quote 2".

4. Copy the quote on another sheet of paper but reduce Rs 3-5k in it to get "Quote 3".

Repeat the above process to get the least price desired. I managed to get Baleno LXi @ Rs 5.57 OTR in Delhi.

DCEite · 6th July 2007, 12:08

Quote:

Originally Posted by shobhit15

Here is the method I employed when I bought Baleno in 2005. I did not opt for loan and did full down pament.

1. Go to "Dealer 1". Get the quote price.

2. Copy the quote on another sheet of paper but reduce Rs 8 - 10k in it. Lets call this "Quote 1"

3. Go to "Dealer 2". Show him "Quote 1" and get a lower quote, "Quote 2".

4. Copy the quote on another sheet of paper but reduce Rs 3-5k in it to get "Quote 3".

Repeat the above process to get the least price desired. I managed to get Baleno LXi @ Rs 5.57 OTR in Delhi.

By the way this is the exact way i assembled my PC in Nehru Place, but i doubt this will work with cars.

shobhit15 · 6th July 2007, 12:32

Quote:

Originally Posted by DCEite

By the way this is the exact way i assembled my PC in Nehru Place, but i doubt this will work with cars.

Yes, it really does work.

caliper · 7th July 2007, 10:24

What I find interesting is the variation in stated prices by the dealers. It's one thing to have a dealer discount a price, but I'm just talking about the "list price" for the dealer.

For example, if you go to the Innova price list at

http://toyotabharat.com/inen/forms/pricelist.asp

and find Galaxy Toyota in Delhi, you get

VM 2.5 VM (Diesel) 7 1,046,820
2.5 VM (Diesel) 8 1,050,830

But if you click Uttam Toyota (Delhi), you get

2.5 VM (Diesel) 7 1,031,310
2.5 VM (Diesel) 8 1,035,290

That's a Rs. 15k difference!

Can anyone confirm that this is the price that Uttam gives before any negotiating?

5th July 2007, 11:24	#1
caliper BHPian Join Date: May 2007 Location: India Posts: 160 Thanked: 3 Times	Bargaining on new car purchases in India I'm going to buy a new car, and I've been researching the methods that car salemen use. The links are below, and they are very interesting. One of the methods recommended to fight back is to solicit bids from multiple dealers, preferably by fax. After you get the lowest bid, you give all a chance to beat it. A few questions/comments: 1) Bargaining- I was told that dealers in India don't entertain bargaining on price. The reason given is that the company feels it would be hurting it's price/brand in the market. Is this true? It would seem strange since bargaining is such a part of buying anything else in Indian life. 2) Accessories- If they won't bargain on price, what about accessories? I.e., don't cut $30k off the price, but give it to me in accessories. But I was told that even if you get the salesman to do that, when it comes time to drive off they'll present you with a bill. You'll go to the agency owner, and then it becomes a he-said, she-said where nobody will take responsibility for saying that the customer is to get X accessories free. I suppose one way to fight this would be to get a bill in hand for $1 for all the accessories. 3) Four-square- The article on the "four-square" is very interesting. Basically, you ought to be focusing on the price of the car, but salesmen make you look to the monthly payment, which may end up making the total amount paid over time huge. 4) Invoice price- Finally, there's the concept of "invoice price" paid by dealer to the manufacturer. How can we get the invoice price in India? Smart people in the West try to pay a few hundred over invoice. Could you even get the dealer to show the invoice in India? Links: Dealerships Rip You Off With The "Four-Square," Here's How To Beat It http://consumerist.com/consumer/four-square/dealerships-rip-you-off-with-the-four+square-heres-how-to-beat-it-248445.php Confessions of a Car Salesman http://www.edmunds.com/advice/buying...2/article.html http://www.cartransportcentral.com/ http://www.carbuyingtips.com/ http://www.insidercarsecrets.com/buynew.html
	() Thanks

5th July 2007, 12:44	#2
DCEite Senior - BHPian Join Date: Sep 2004 Location: NCR Posts: 3,415 Thanked: 2,530 Times	Related Article: http://www.team-bhp.com/forum/buying...ance-deal.html
	() Thanks

5th July 2007, 18:49	#3
caliper BHPian Join Date: May 2007 Location: India Posts: 160 Thanked: 3 Times	I appreciate the link, but a lower EMI is exactly what I am trying to avoid. That's how they trick you. If you go in and say you need an EMI of 7500 rs. per month, they'll give that to you. But with possibly high interest and longer loan term, plus no break on the price of the car. So it's a lower monthly, but much more overall. However, I want to ask about getting the best cash car price. Has anyone solicited bids from multiple dealers? By fax? If so, how did it go?
	() Thanks

5th July 2007, 18:56	#4
vanchi_s BHPian Join Date: Jun 2007 Location: Chennai Posts: 47 Thanked: 32 Times	I couldn't get it through fax but got their (two different dealer) hand written pricing with accessaries. Also, I defined term and loan amount and requested for the EMI. This way I know what I am paying for.
	() Thanks

5th July 2007, 23:14	#5
ankit.jhamb BHPian Join Date: Jan 2007 Location: new delhi Posts: 573 Thanked: Once	i dont think there is any problem in bargaining before buying the product .....because you may get a good deal by bargaining with different dealers ...
	() Thanks

6th July 2007, 01:01	#7
1100D Senior - BHPian Join Date: Jun 2006 Location: Calcutta Posts: 4,390 Thanked: 4,079 Times View My Garage	Lot of the points in the links are not applicable in India. Firstly there are not many number of cars sold. Secondly the ex-showroom price of a car is fixed. Agreed that one can work up the accessories bit, but then with absence of Multiple dealers for the same brand in a few cities, theres hardly anything to baseline expectations on. Moreover salesmen in the car dealerships in India dont make much money, so it does not even feel right to take it from their kitty.
	() Thanks

6th July 2007, 12:03	#9
shobhit15 BHPian Join Date: Jun 2005 Location: Noida Posts: 208 Thanked: 0 Times	Here is the method I employed when I bought Baleno in 2005. I did not opt for loan and did full down pament. 1. Go to "Dealer 1". Get the quote price. 2. Copy the quote on another sheet of paper but reduce Rs 8 - 10k in it. Lets call this "Quote 1" 3. Go to "Dealer 2". Show him "Quote 1" and get a lower quote, "Quote 2". 4. Copy the quote on another sheet of paper but reduce Rs 3-5k in it to get "Quote 3". Repeat the above process to get the least price desired. I managed to get Baleno LXi @ Rs 5.57 OTR in Delhi.
	() Thanks

7th July 2007, 10:24	#12
caliper BHPian Join Date: May 2007 Location: India Posts: 160 Thanked: 3 Times	15k discount off of Innova list price What I find interesting is the variation in stated prices by the dealers. It's one thing to have a dealer discount a price, but I'm just talking about the "list price" for the dealer. For example, if you go to the Innova price list at http://toyotabharat.com/inen/forms/pricelist.asp and find Galaxy Toyota in Delhi, you get VM 2.5 VM (Diesel) 7 1,046,820 2.5 VM (Diesel) 8 1,050,830 But if you click Uttam Toyota (Delhi), you get 2.5 VM (Diesel) 7 1,031,310 2.5 VM (Diesel) 8 1,035,290 That's a Rs. 15k difference! Can anyone confirm that this is the price that Uttam gives before any negotiating?
	() Thanks