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Do you feel that you could have got a better deal on your last new car purchase? Or are you buying a new car and are afraid of being taken for a ride by the dealer? Worry not - CarWale’s new car discount negotiation guide helps you make maximum out of your new car deal.
It may be surprising for most of us but the reality is that there are at least seven types of discounts one can ask or bargain for from a new car dealer! New car buying is a process in itself and consists of several individual small deals. They might look insignificant at first glance but when you add them up, the entire amount of the discount is more than 10% of the overall price. Of course all of these discounts majorly depend on the cars and their demand in the market.
Let’s take a look on various major discounts that you can ask for from your dealership:
Dealer/OEM Discount: This is the discount provided by the manufacturer or the dealer. In most cases and most times of the year, manufacturers/dealers offer some discount/offer/deal on a new car. Please don't expect any discount if the car is just launched or it is in great demand (long waiting period). The dealer will give you a part of this discount without asking but you will have to bargain on it in order to maximise it. Unless the car is extremely popular, consider a 1-5% dealer discount on a new car. In fact this discount goes as high as 10-15% if the car is not selling at all.
Corporate Discount: If you are working with a PSU company, a big MNC or highly reputed corporate firm, ask the dealership for a corporate discount. Corporate discounts are offered by manufacturers to attract employees from big companies. Even if you are not sure about the eligibility of corporate discount, ask the dealership about it and confirm whether you are eligible or not. Car manufacturers provide their dealers with a vast list of corporates for which the discount is applicable. A typical corporate discount is in the 1-5% (not more than 25,000 normally) range and is independent of the dealer discount. It comes from the manufacturer's pocket!
Loyalty Bonus: A few manufacturers offer loyalty bonus to keep their existing customers with them. If you already own or have owned a car of the same manufacturer, you are eligible for a loyalty bonus. The typical loyalty bonus amount is 1-5% (not more than 20,000 normally) rupees. Not every manufacturer offers this bonus but there is no harm in asking.
Exchange Bonus: If you are trading-in your existing car for a new one at the dealership, ask the dealer for an exchange bonus. Dealer happily offers exchange bonus because he gets a good margin on your used car that he buys. The exchange bonus should be in the 1-5% range.
However, if you are not in a hurry, CarWale’s suggestion is not to get misguided by the exchange bonus and sell your car yourself. We highly encourage you to sell your car through an internet portal like CarWale or sell it to an individual directly. By cutting out the middleman in the sale, you save a lot of money, typically 5-10% of your used car’s price.
Discount on Finance: Finance companies give about 0.5-2% payout to their dealers/DSAs for selling loans. Current market trends say, despite the fact that dealer passes on most of the finance payout to the customer, he earns a tidy amount on your finance deal (around 0.5%). Ask for the maximum finance payout.
Alternatively, you can ask your dealership to give you only car quote and you can compare the EMI with CarWale. We believe our car loan interest rates are highly competitive.
Discount on Insurance Premium: Ask the dealer for a discount on the insurance premium of your new car. Insurance providers offer a margin of up to 40% to dealers. You can ask for a discount of up to 30-35% on insurance premium (excluding third-party liability and service tax). If the dealer is hesitant in giving you discount on your car insurance, ask him if you can get it done on your own. Please note the dealer has the right not to sell you a car if you don't opt for insurance from him. However most of the dealers will not create a fuss around it.
Discount on Other Charges: There are several hidden/apparent charges levied on you by your new car dealer. Sometimes the charges look justifiable but more often than not, they are too much. You can ask your dealer to give you discount on registration charges, handling charges, service charges etc.
Now, if you sum up the seven discounts, you will find that you have saved a fair amount on your new car purchase. Even if you manage to squeeze 3-4 of these, you are home! Be an informed buyer.
Do let us know what you think about this article by giving us your feedback.
