Cost Saving Car Buying Tips: Your Step-by-Step Guide

Key Highlights:

• Setting a budget should be a priority before starting the research on buying a car.

• Choose the car body style and features that best suit your driving preferences and family needs.

• Be aware of official benefits while buying a new car, and don’t hesitate to negotiate to save some more. 

Step 1: Set a Realistic Budget

Before engaging in the battle of brain and heart while thinking of buying a new car, you must measure the depth of your pockets. And by that, we mean that setting the upper limit of the budget you should spend on buying the car.

Whatever your income is, the monthly expenses for your car, including its EMI (if you are buying a car on loan), fuel and maintenance bills, should not exceed 20% of your monthly income. Based on this calculation, fix a maximum budget for your new car and start saving for a sizable down payment.

Step 2: Select the Type of Car

In the current scenario, almost all the segments in the Indian car market are filled with a variety of options in varying body styles, including hatchbacks, sedans, SUVs, crossovers and even coupes and convertibles. Among all of them, if you are considering buying a car out of necessity, choose the car body style that suits your driving preferences and family requirements.

Step 3: Decide Between Going For a New or Old Car

Once you have decided the upper limit of spending for a car and the type of car body style, it’s time to determine if you want to buy an all-new car or go for an option in the used car market.

The variety of choices is generally higher in the used car market. However, you should not be carried away by an option that might tempt you with its luxuries but can later lead to regret due to its high fuel and maintenance costs, especially if you are buying an old car. Also, buying a new car is much easier and hassle-free with fewer inspection requirements.

Step 4: Understand the Car Features & Requirements

While the idea of having all the latest tech and gizmos in your car sounds fancy, not all features might be purposeful for you. Most modern passenger vehicles cover the safety basics, such as six airbags, ABS with EBD, and reverse parking sensors as must-haves. However, when it comes to comfort and convenience features, focus on having only those features that you require in your daily usage.

Step 5: Don’t Forget the Long-term Expenses

Besides the fuel bills, the other expenses that you should be ready for in the long-term ownership of your car are its service and spare part costs. Some cars command higher costs for maintenance and spare part replacements, so buy them only if you can afford these costs in the long run.

Step 6: Engage in Public Conversations & Opinions

Being aware of public sentiment about a car may seem subjective, but it is not something to be ignored entirely. Be mindful of the user reviews, consumer complaints, and after-sales ownership experiences of the model you choose.

Step 7:  Take a Test Drive Before Proceeding With the Deal

While you have chosen your car based on a balance of your likes and purpose, be fully convinced of the capability of that particular car model in fulfilling your requirements. To understand that, a proper test drive is essential, which will help you assess your preferred car’s prowess in real conditions. If you are buying a used car, it is advisable to take the help of a mechanic or a professional while taking the car for a test drive.

Step 8: Understand All the Basics of Car Financing

If you are considering buying a car on a loan, it is crucial to be aware of all the aspects of a car loan, including the interest rate, tenure and hidden charges.

Understandably, you should prefer car loans with the least possible interest rate, but be aware of the hidden costs that are usually associated with lower interest rates. Also, keep an eye on pre-approved car loans from banks or finance institutions, if any, which will help you save more with minimal paperwork and obligations.

Step 9: Stay Updated on Offers for Your Selected Car Model

Almost all carmakers announce attractive benefits and discounts, which are generally higher during the festive season and the end of the calendar year. Some models are even available with such attractive benefits and offers throughout the year. Look out for benefits like cash discounts, exchange bonuses, loyalty bonuses, corporate bonuses, or any other cost-saving offers on the model of your preference and budget.

Step 10: Don’t Hesitate to Negotiate

Besides availing all the official benefits offered on your model, don’t hesitate to ask for more possible discounts you can get. Authorised dealers usually offer more discounts over a model - the lower the market demand for a model, the higher the dealer-level discounts on it.

Also, if possible, try to compare the deals from multiple authorised dealers of the carmaker for the same model. In the case of used cars, the scope of bargaining is even higher.

Strike the Right Balance Between Desire and Budget

The idea of buying a car is usually fascinating, so it's understandable that people might get carried away when making a decision. Use the factors mentioned above to guide your decision - choose a car that aligns with your needs, doesn’t strain your finances, and ensures a smooth ownership experience in the long run.

FAQs

1. What is the best rule for buying a car?
Before starting your research for buying a new car, setting the maximum possible budget should be the priority. For that, your car’s EMI, fuel bills and maintenance should not cost 20% of your monthly expenses.

2. How do I choose the right car?
When choosing a car that’s right for you, consider aspects such as car body style, budget, whether to opt for a new model or a used one, features, long-term expenses, user experiences, financing options, and benefits offered on the car model of your choice.

3. What is the cheapest method for buying a car?
Buying a car in cash is often the most cost-effective method, especially for a used car, as interest rates for used car loans are generally higher. If you’re planning to buy a new car on loan, choose a bank or financial institution that offers the lowest possible interest rate.