I recently went for a car upgrade and realized that “now” is the best time to buy or upgrade your car. If you have been thinking about buying a new car or even upgrading your existing car or even buying a second hand car, Dec – 08 probably is a bonanza month for getting a handsome deal.
Here are some of the reasons why December this year is better:
Dealer Discounts: December is the month, when car sales usually drop. A typical consumer wants to buy a car in Jan since that changes the model year of the vehicle in expectations of higher re-sale value. This year due to the economic downturn, the car sales have already hit badly, hence dealers are trying to push sales aggressively to reduce the inventory. So you can expect huge discounts on all ranges of cars.
Government Fiscal Stimulus Package : To provide some boost to the automobile sector which is hit by falling sales this year, government has announced a 4% excise duty cut. As per reports :
Maruti Suzuki India (MSI), the country’s largest car maker, announced it was cutting prices effective from midnight. “We are looking at passing on the entire benefit to the customers. We shall be cutting down prices in the range of 3.5-4% from midnight and most of our vehicles will be cheaper by that percentage,” MSI chairman R C Bhargava said.
This again brings huge benefit to the ultimate consumers.
Ease of Auto-Loan : With government trying to bring the repo rate down to ease liquidity crunch with the banks, it becomes easier for banks to provide auto-loans.
Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive.
This can bring the auto-loan rate by 1-2% and makes the loan easier on the consumer pockets.
When I walked into the Sagar Automobiles (Maruti showroom on B.G. Road), I realized that almost all vehicle prices are down by a huge amount. For example, a typical WagonR Lxi which was priced at around 4.1 lakhs on road, now coming at 3.6 lakhs on road. If you already own a maruti vehicle and want to upgrade you can bargain for more discounts. Also the loans are coming cheaper with SBI giving a loan at 11.75-12%, while private banks at around 13% (which might be reducing further). BTW another reason to cheer while buying a car is the reduction in petrol prices. Also there is talk of privatizing the petroleum products (Petrol and Diesel), and if that happens, the prices are about to fall further. Consumer is the king for now!!