An update for those who might fall into my situation -
I got the statement from ORIX and I had to pay 5.74 Lacs back to them and started evaluating both Sell and Refinance options simultaenously. It was a really interesting exercise and also some interesting things happened...
1. Sell - Once again this is a 8 month old car with harldy 9000 kms on it, just about losing the new car smell now...
Started with Maruti True Value - They offered me 4.35 Lacs!! I said thank you very much and walked out...
I had put up ads on a couple of places (I was asking 5.3 lacs keeping in mind a negotiation margin) and had people calling me. One guy called up and said he was a student and wanted to come down, see the car and buy it in case. He wanted to discuss the price and made a final offer of 4.5 lacs - I told him I'd rather refinance it!!
The same guy calls up after a week, says that he is a student and also a part time car consultant and was actually calling up last time for a friend. Also said that since I did not show interest in his offer he did not call back. I told him once again anything less that 5 lacs and I will refinance. He kept calling back to look at the car, but I was waiting for refinancing to come through so I kept pushing the meeting for a couple of days..
Another broker tried to arrange for sale. Interestingly I was willing to sell for 5 lacs and he was willing to buy for 5. But the brokers 2% killed the deal (It meant I wanted 5.1 and he was willing to pay 4.9). I even suggested to the broked to get it down to 1%, but the guy agreed to do it only for me and not for the buyer and the deal did not go through..
Anyways, my estimate for a mid 2004 LXI baleno after all this exercise is for a price around 5 lacs.. Besides I am not willing to accept that just because Maruti is offering 40 or 60 K discuont on new cars etc makes my car 1.5 Lacs cheaper in 8 months!! Also thankjs to some of the outrageous offers from Maruti Truevalue and the other part time consultant, I value my car a lot more now:-)
Refinance
Initially everyone was willing to only finance 80 to 85% of the assesed value... Interest rate of between 12 to 13%. I thought selling was the best option -
I had turned down this guy from Kotak saying I am going to sell, but he insisted I anyways get the evaluation done and he will fight for maximum finance for me. I am really glad I did this, the evaluator priced the car at 5 Lacs and after some pushing from this agent Kotak agreed to finance 5 Lacs.
Anyways i did some cash flow calcutations over a 3 yr period (the option was Sell and buy a new Baleno at lower finance rates v/s refinance) and inclusive of the immediate down payment to both ORIX as well as for the new car, monthly EMI's and also additional depreciation of current car over the new one, it works out that refinancing was a actually financially better (NPV positive for the finance guys :-)
So to end a long story - have decided to refinance it for 5 lakhs (EMI of 16750 pm for 3 yrs), and pay the balance 74K from cash to ORIX...
Another observation - The car market value is all about supply - demand (with some boundary conditions of new car price etc..), do not sell your well maintainted car (esp. Balenos) cheap - it is a terrific car and deserves much better than what the bargain hunters are trying to get it for second hand... |