Buying a car at the end of the year

Buying a car is generally the biggest personal purchase for a person, after a home. It's hard to separate emotions from such a large purchase and so, for many, the time to buy a car is during festivals like ‘Dhanteras’, where it is considered auspicious to buy metal, or on a birthday or anniversary. But if you are open to timing your purchase, you could save big in the process.

The year-end is arguably the perfect time to get the best deals on car purchases. It is, generally, a leaner period in car sales as most wait for the new year before buying a new car. As dealers have to clear stocks and, in some cases, meet their required targets, they generally offer the best discounts at this point of time. These include manufacturer-approved discounts, along with incentives offered by dealers to give sales a bigger push.

Furthermore, with more stringent BS6 emission norms coming into effect from April 1, 2020, carmakers will be even more focused on clearing stocks of any BS4 models – as these cars cannot be sold post the implementation of the new emission norms. This should translate to even larger discounts or at the very least, additional incentives in the form of free accessories being offered with the purchase on some cars.

So if you are buying a car at the end of the year, here is what you can expect and what you should do to get the best deals.

1. How much can you save?

Depending on the car and manufacturer you go for, discounts can range from a few thousand to a few lakh, which can probably be stretched even further if the car is a slow-seller.

In India, the year-end also coincides with a host of festivals and many manufacturers offer good deals to customers during this period to buy a new car. You can benefit from various offers such as free insurance, special-edition packages that have accessories at discounted prices and more.

What can also be considered is that a new year brings with it a change in pricing. So, a car that may cost Rs 5 lakh in 2019, may appreciate to around Rs 5.20 lakh in 2020. Therefore, buying in 2019 not only spares you from spending that extra Rs 20,000, but you also stand to gain from the year-end discounts, along with benefits on insurance and warranties offered by dealers.

Most people hold off on buying at this point to save on depreciation that comes with the car being from 2019 instead of 2020. However, in some cases, the deals you get may be worth more than the depreciation that your model will face by being from an earlier model year.

2. What benefits can you expect?

If your car happens to be from the previous model year, it is likely that the dealer will be more than willing to part with it to open up space for newer stock. Same can hold true for residual stocks of BS4 cars whose BS6-compliant variants are already on sale in the market. This can put you at an advantage as you get a better bargaining chip. You could try and sweeten the deal for yourself by bargaining for free accessories. Many items, while taken for granted, may not be part of the standard kit of the car –mud-flaps, footwell mats, an audio system, etc. – so haggle to get as many of these for as low a price. Just remember, you may not think much of these items but adding them to your car as individual accessories can amount to a pretty penny.

Also, it is good to get your research done before you buy your car. Get your hands on a brochure from a few months prior and compare it with the latest brochure you get from dealerships. In some cases, a model year change can also mean a revision of the equipment list, so you can then haggle to have the missing equipment added as accessories; something like a stereo system with Bluetooth connectivity in place of the standard system, the alloy wheels you like, etc.

Buying a car at the end of the year can also mean that you save money on insurance. Dealers generally tie-up with insurance companies to offer car insurance schemes and to meet certain numbers before the end of the year. Consequentially, you may be offered better insurance rates as compared to the year’s beginning. Dealers may also offer free insurance schemes for some models, so that also amounts to savings.

In some cases, you can also benefit from extended warranties at a discounted price or as a free add-on from the manufacturer.

3. How to push for the best deals?

You must keep in mind that dealers will be looking to clear out existing stocks to make way for newer models and that they also have to meet sales targets assigned by the manufacturer. You can try and use this to put the dealer on the back foot and secure a better deal. Be prepared to say “Thank you, but we will wait” or “We are going to another dealership as they are offering us a better deal”, which should work to your benefit if the dealer is looking to offload current stock before the beginning of the next year.

Do your homework before you start negotiating. If a manufacturer is selling a car from multiple dealerships, visit at least two or three of them and use the knowledge gained and deals offered to push for better benefits at the next showroom you visit. Do not be afraid to haggle at each place, and also, return to dealerships you have visited to push for a better deal. If your friend bought the same car and got a deal you thought was good, use that to negotiate as well.

Be sure to check on the manufacturer’s website for discounts on offer, and bargain from that point when you visit the dealership. Also, keep a lookout for special-edition models that offer additional equipment; compare the prices of the kit with an accessories brochure prior to visiting dealerships as in most cases, you get added features for a bargain compared to asking for them individually.

Check the insurance price of the car you are looking to buy. Rates at the dealership level may be higher than from third parties, so you could save money there too. Just remember to read through all documents and fine print before you buy your car insurance.