How to buy a Car (Basic steps for buying a car)

Questions that I typically get: 

• How do I buy a car? 
• How do I buy a car without being cheated?
• How do I ensure a good deal?
• Is there a check-list for buying a car?

Hello Readers,

I will not start how you should select a car, how you finalise the features you should have in your car, or even which car is best for you - these decisions I leave with you.

But, on the other hand, let me tell you, what the ideal steps are for actually buying a car. And answer all the above questions!

To be frank, it is actually simple - Select a car/model/variant, Pay the money, Drive away with your new car. Yes, it is surely that simple, but let me add a few steps so that you get absolute value for your money.

A few terms:

Make: Manufacturer e.g. Maruti Suzuki, Ford, Honda etc

Model:Model of the car e.g. Alto, Ertiga, Figo, Amaze etc

Variant: Particular model of choice e.g.Maruti Suzuki Ertiga SXi

So, let me start when you have selected the Make and the Model of the car. The particular variant may change later in the buying process based on the feature of your choice as well as price.

Step# 1: Discuss the chosen variant to at least three different dealers. Apart from understanding the features of the variant of your choice, please focus on the following:

1. Price,
2. Discount offered,
3. Benefits provided and
4. Goodies to be given away.

1. Price

Please list down all the price components:

1. Ex-Showroom Price
2. Additional pricing components - like Base Toolkit, Base Kit, Handling Charges etc
3. Extended Warranty
4. Insurance - Standard and Bumper-to-bumper (or Zero-Dep or Zero Depreciation)
5. Registration
6. Road Tax

It is most likely that apart from the Ex-Showroom Price of the car, all the component would be different for all the dealer! So, please ask why they are charging high or low, what they are including and not. You can always quote a lower price point that you have got from another dealer and negotiate.

Some of the additional components, like the base kit, an extended warranty may get included free of cost if you negotiate hard.

If you are planning to buy a model which is new and high in demand (with a waiting period), you may not get much room for negotiation, but ensure you understand all the price factors and verify them from all the three dealers.

Insurance - it is preferred to go for Bumper-to-Bumper insurance, but it is your choice. So please understand the differences while you decide. The price difference is not that great compared to the price of the car, but it gives you better value for money when you make a claim.

Road Tax and Registration costs are very grey areas - no one knows what’s the exact cost. However, you can verify from someone who has bought the same variant, if you are lucky enough. Otherwise, please ensure (and ask) that you should get govt receipt/tax tokens with the same amount of money that you are paying. I have seen cases where the road-tax amount that the dealer is charging is Rs 5000.00 more than the receipt that one would get as Tax Token from PVD. When asked, they said, it was the handing charges etc. So just be careful and do not hesitate to ask deeper questions.

2. Discount offered

While you discuss the price, please consider the discounts offered and why are they being offered. Discounts could be seasonal discounts (Diwali, end of year etc), Corporate discounts, or other types of discount. Please ask for what discount being offered by the dealer. Many a time, they include 3rd & 4th year extended warranty free of cost. It could also be Rs. 1 for insurance (check the clause).

Dealer can offer many discounts just to grab a customer - so please negotiate.

3. Benefits provided

Benefits are additional items that you can get from a dealer, which are non-monetary. This would be more number of free services, or similar. I will try to provide you with examples of such items so that you get better ideas.

4. Goodies to be given away

This is something that you must talk about when you are buying a car. A sample list is as follows:

1. Steering cover - leather - colour and quality of your choice (not something that they have as extra)
2. Gear Knob leather cover
3. Seat Cover - again colour and quality of your choice
4. Window sun-protector films
5. Foot/floor mats (total 5 in number - obviously based on size and number of seats)
6. Complete floor mat - this covers the entire carpet of the car and fixed; this is not floor mats
7. Mudflap - four in number
8. Car cleaning kit - please verify what is included; minimum you can get just a cloth, otherwise, this can include 20 different items !!
9. CD/DVD kit in case your car has a CD/DVD player
10. Car Perfume - bottled ones or attachment types
11. Idols
12. Key Chains
13. Spoilers
14. Mobile Chargers
15. Under-body anti-rust paint
16. Body cover
17. etc. etc.

The list could be much longer, I just included the ones that I have seen being offered - so imagination is the limit. Don’t hesitate to ask for these - if you get, it is good for you. However, whatever is being offered, please ask them to show a sample, so that you exactly know what you are getting at the end of the day.

Once you have information about all these, please compare them and take a call which dealer to go with. Also, you should consider other factors like reputation, scale, convenience, behaviour etc of a dealer before you zero-in on a dealer.

We will now discuss the payment related Do’s and Dont’s in detail - I will also cover the bank loan aspect in detail as part of Step# 2.