Many people are lucky to receive a 13th cheque or even a bonus this time of year and may go on a shopping spree!
There are items that we are likely to delay purchasing until the festive season in order to take advantage of the special offers, and buying a car is one of them. Car brands offer discounts along with accessories, cash vouchers and loyalty-exchange bonuses – and perhaps, free insurance.
But in a flurry of these offers, there are factors to consider before buying a motor vehicle. ArthaYantra says your decision to buy a car should not be driven by the discounts on offer, but by necessity.
Financial Impacts To Consider Before Buying A Car
- Equated monthly installments (EMI) – Understand the implication of a down payment if you are taking out a loan.
- Compare cars – Don’t be lured by cash discounts in stretching your budget to get a bigger car than the one you have planned to purchase.
- Buying a car necessitates other expenses like fuel and maintenance, which increase monthly expenses.
- Car discounts occur during the last three months of the year – A new vehicle bought during this time becomes a previous year’s model within couple of months. Buying discounted cars at a less expensive rate affects the resale value of the car.
Are Discounts Useful To You?
Analyse the purpose of a discount. Most discounts are product-based and cash discounts can be more valuable than product discounts, as we may not need specific items being offered by the dealer/maker of the car.
Popular Product Discounts During The Festive Season:
Insurance – It is better to check the insurance features before just accepting the special offer. Most insurances offered as freebies are not necessarily a comprehensive product.
Free accessories – Accessories such as free seat covers, alloy wheels and navigation systems are nice-to-haves and not necessarily essential.
Loyalty-exchange bonus – Only consider this product if you already own a car from the same maker and are looking to exchange it for a different model or version of the same brand.
Purchasing a car affects your personal finance decisions regardless of the time frame. However, a decision to purchase one during the festive season should be based on the collective factors of the financial impact and whether or not the discount offered matches your requirement and financial needs.