Five things to know while buying a car

                                                                   

Car companies usually offer big discounts in December to clear their inventories before they hike prices and launch new models in January. If you buy now, your vehicle will bear the registration date of December 2013, and in a few days, it will be last year's model. This should not matter if you are planning to use the car for at least 7-8 years. However, if you plan to change the car in 3-4 years, the registration date will matter. A 2013 model will fetch a lower resale price four years down the line. Hence, it will be prudent to wait till January to buy it. Remember that a new car should be used for at least 8 years to get a full return on investment. Sell it earlier and you could lose out on its value.

Buy within your means

The bigger the car, the fatter the discounts being offered. However, don't let the freebies entice you into making a purchase you can't afford. The golden rule is that the price of a car should not be more than 60% of your annual take-home income. If your take-home salary is 60,000 a month, don't think of buying a car priced at more than 4.32 lakh (60% of 7.2 lakh annual income ). Another time-tested principle is that the car loan EMI should not be more than 15% of your post-tax monthly income, or 40% of your investible surplus after all expenses and mortgage payments. Follow these rules diligently when you choose the car model and you won't regret the decision.

Consider the offers closely

While you should not look a gift horse in the mouth, when it comes to freebies from car dealers, a closer look is necessary. They tend to inflate the value of free accessories to make the deal seem more attractive. This is why it's better to go for cash discounts rather than free accessories. Don't fall for the exchange offers as well. Most car dealers offer to buy your old car, but the price they quote is usually much lower than the one you would get elsewhere. A bit of market research will tell you roughly how much you can expect for your car, and you won't have to run around to find buyers. Avail of portals like Olx. in, which have made it easier to sell used stuff.

Transfer the no-claim bonus

All car owners know that if you don't make a claim in a year, the next year's premium fetches a discount. However, few know that a no-claim bonus can be transferred to another vehicle, bringing down the insurance cost of a new car. You will have to submit the photocopies of the sale agreement, transfer documents, insurance note and the car's registration certificate, along with a letter requesting the policy's termination, to the insurer. The latter issues a no-claim certificate, which will get you the discount on the new car's insurance. If the insurance of the new car works out to 15,000, a 50% no-claim bonus will reduce it to 7,500. This certificate is valid for three years from the date of issuance, but you will have to make things clear to the buyer since it is assumed that the old car comes with insurance.

Petrol, diesel or CNG?

Petrol is the costliest car fuel, but petrol cars are the cheapest. Diesel is inexpensive, but the diesel variants of cars are costlier by 75,000-1 lakh. They also require higher maintenance. Your choice should depend on how much you travel in a day. If you drive more than 80 km a day, go for a diesel car. You will be able to recover the extra cost within two years. This assumes that the gap between petrol and diesel prices will not narrow down further. CNG is a clean and cheaper fuel, but its availability can be an issue. Morever, the CNG cylinder takes up a lot of boot space.

Buying a used car? Here's what to look out for

                                                                           

The used car market in India is still largely unorganised. Although most major auto companies now offer certified used cars, most of the transactions still take place in the open market.

Maruti, Hyundai, General Motors, Toyota, Tata Motors, Mahindra & Mahindra etc. all sell certified used cars complete with warranty, not just from their own stable but across brands.

There are different stages of checking and testing that these cars undergo, before being certified by the companies.

However, because these cars go through rigorous testing, the companies charge much more than what the neighbourhood used-car dealer would.

There are also cars sold by these auto companies, without the certifications and the warranty, which cost substantially less, but they would still be more expensive than the dealer operating in the unorganised sector.

There's no reason to be too wary about the unorganised sector, as many a time you can pick up a great deal from there.

Buying a second-hand car is not a bad idea, but if you have the means, most people would suggest you go for a new car- simply because of the fact that there are less hassles involved. A new car is unlikely to give any trouble in the first three odd years at least.

Even if a car is in mint-condition, and has only run a few months or a few miles, it will attract a price much less that its original price, while being sold, because it is a depreciating asset. It is a good idea to keep a lookout for such deals while buying a used car.

"If you buy a new car for around Rs. 10 lakh and want to to sell it off immediately, you can easily shave off a lakh (Rs. 1 lakh)," says auto expert Tutu Dhawan.

The more premium and high-end the car, the better a deal the new buyer stands to get, opines Mr Dhawan.

For cars within the Rs. 5 lakh bracket, Rs. 50,000 can easily be discounted if it is being sold off in a month or two, he says.

My first car was a second hand 'certified' automobile from one of India's major auto companies. Although there were some minor issues with the clutch and brake of the car, which I found out in the course of driving it for the first few days- they were quickly addressed and fixed by the company.  I drove it for a year, and got a good price while selling it off. What worked in my favour was it was one of the more popular cars from one of India's most trusted car makers, it was silver in colour (silver and white have the best re-sale value), it was fuel-efficient, and well-maintained.

While buying a used car, keep re-sale in mind. White and silver, as mentioned earlier attract better prices; a popular car whose spare-parts are readily available and are not very expensive should also be part of the checklist.

When you go to check or test-drive a used car, take somebody along with you, who understands cars well. It is always a good idea to take a seasoned driver or a mechanic along, they would be looking at it sans the rose-tinted glasses which you may have put on- simply because you love the way the car looks.

Even if it is a certified company car, make a checklist about the gears, clutch, brake, accelerator, steering, tyres, headlamps, doors, windows, horn, wiper- check if everything is functioning properly, if anything seems amiss raise it with the dealer or the company immediately.

No Sales but New Cars Aplenty

                                                                       

          


When your returns are not up to expectations, what do you do? Most roll back investments; others play cautious. Some optimists, however, do quite the opposite. They try and up their game by launching a host of new products and embarking on aggressive expansion and marketing strategies. Nothing risked, nothing won, is the name of their game. The automobile companies in India belong to this last category.
The sector, which had enjoyed double-digit growth for the last decade, bucked the trend in 2013 and saw sales plunging to a 12-year low at 25.71  per cent in February.
The downward slide continued over the next few months and sales of passenger cars, including sedans, hatchbacks and SUVs, lagged right through 2013 with volumes touching 6.7 per cent in March, 10.43 per cent in April, 12.3 per cent in May, 9 per cent in June and 7.4 per cent in July. Volumes picked up for the first time in ten months in August at 15.37 per cent on the basis of a low base effect and good monsoon.
But again, in September, sales slid down to 4.7 per cent and to 4 per cent in October, despite the ongoing festive season.
“The auto sector witnessed de-growth of nearly 5 per cent during the first half of 2013-14,” says Pravin Shah, CEO, Automotive division, Mahindra & Mahindra. Not even attractive discounts, exchange offers, lower EMIs, bundled insurance policies or freebies like music players and other accessories could perk up sales as consumers put a lid on discretionary spending to battle high inflation.
Still, seemingly nonplussed, car companies have gone into overdrive and are set to launch a flurry of marketing activities and new releases in the coming year. Maruti Suzuki India, Honda, Nissan and Volkswagen all have new models to sell in the new year, while other players are tweaking old cars to revive customer interest—and demand.
Consider the new offerings:  Maruti Suzuki India has lined up a new sedan to replace the SX4 early next year. Nissan’s Datsun Go, Force Motors’ Force One, Tata Nano (diesel), Honda’s Jazz, VW’s Beetle, Skoda’s Yeti and Renault’s Duster are all waiting to hit the market in refurbished form. Honda may have sold only 73,000 units last fiscal; next year, it is targeting 1.2 lakh sales on the back of recently-launched Amaze and the ‘new-improved’ Jazz, Vezel and Accord diesel models.
“We plan to focus on our fresh line of products through extensive marketing activities in 2014 and improve the price value equations by refreshing existing models. We will introduce new models to target existing and emerging segments, while maintaining our modern premium image,” says Rakesh Srivastava, senior vice-president, sales & marketing, Hyundai Motors India Ltd. “We plan to launch new cars every year for the next few years. Our turnaround strategy for 2014 will be to increase our market share and rural penetration.” Hyundai, which recently refurbished the i20, Verna and Santro, is also working aggressively to increase its dealership network. It is widely anticipated that Hyundai will debut the Santa Fe, i10 diesel and a sedan in 2014.
For its part, Ford India—which claims to sell one Figo (its flagship model) every five minutes globally— intends to double its sales in India by increasing its service touch points from the current 274 to 500 in the next few years.
P Balendran, vice-president, General Motors India, says: “We have always kept up the excitement in the marketplace with new models. We will do so next year as well.” In 2013, GM introduced the Chevrolet Sail sedan and Chevrolet Enjoy MPV and upgraded Cruze and Captiva; next year, it has a new version of Beat lined up.
Can the new and refurbished launches help the players turn the tide? Most companies seem to think so. Honda Cars India says it registered sales growth of 39 per cent in October 2013 on the back of strong demand for Amaze, while Ford India reportedly sold 21 per cent more cars, led by its new compact sports utility vehicle EcoSport. Volkswagen too registered a 6.8 per cent increase in sales, owing to its new Jetta and variants of Vento in October.
Research firm JD Power is gung-ho about the future, saying the Indian market is set to triple to 9.3 million units by 2020.
But despite the overall bravado, a section of the industry admits that market conditions will remain challenging, at least in the early part of next year, owing to high interest rates, rising fuel prices and weak consumer demand. Also, rising raw material prices are forcing players to go for a price hike and some companies have announced a 2-2.5 per cent revision effective January 1.
GM’s Balendran says unless the government offers a stimulus package to the industry in the next Budget, the market is unlikely to pick up.
“In any case, we expect the market to turn around only after a stable government is in place at the centre after elections. So, any signs of revival will be seen only in the second half of next year,” he explains.
SIAM deputy director-general Sugato Sen concurs. “The situation is unlikely to change till a new government comes in. At this stage, this government cannot do anything spectacular to bring about a revival,” he says.
So however fast and furiously the new cars drive in, demand will pick up only once inflation subsides and interest rates are reduced. Watch this space.

Mercedes Benz says 2013 will be its best year in India

                                                                           


 Mercedes Benz India Pvt. Ltd said the current year will be its best ever, following robust sales of its luxury brands, a trend that contrasts the poor showing of the mass car market that has seen sales crimp on the back of a slowing economy and higher borrowing costs.
Mercedes sold 7,138 cars in India in 2012, and envisages crossing the 10,000 mark by the end of fiscal year 2014. The company sold 1.3 million units in the 11 months to November, 11% more over a year ago. Of these, BRIC (Brazil, Russia, India and China) accounted for 280,000 units, said Matthias Luehrs, chairman of the board of management, Mercedes India and vice-president, global sales, at Mercedes-Benz.
“It will clearly end up as the best year Mercedes ever achieved in India,” Eberhard Kern, managing director and chief executive of the local arm of the German firm, told reporters in Pune on Wednesday. “In 2014, we aim to expand in double-digits faster than the market,” said Luehrs, who was also in Pune to inaugurate the company’s so-called “Centre of Excellence”.
Dedicated to wealthy customers, which include politicians, film stars and corporate heads, the centre features a dedicated helipad that will be used exclusively by such customers who want to fly in and out, providing them highest level of convenience and ease in purchasing their desired specialty car, said Luehrs.
This is one among the few such centres Mercedes has globally.
Mercedes, which launched eight new models in 2013, has seen sales of its super luxury brands such as the SLS AMG, SLK 55 AMG and E 63 AMG, pick up. The average ticket price of these models is upwards of Rs.1.5 crore.
The firm also got a volume push with the launch of the A Class, its compact luxury model.
In a bid to shake off the old-man image associated with the brand, Mercedes globally sharpened focus on design to woo buyers away from German rivals BMW AG and Audi AG. Emerging markets, too, will play a crucial role in the renewed thrust, accounting for half of global sales, according to company executives.
Elaborating on the model launch plans for the calendar 2014, Luehrs said Mercedes plans to introduce the new S Class in the first quarter. It will also be bring in either the CLA (four-door coupe) or GLA (compact luxury cross over) to India, next year.
“Mercedes in India has bounced back,” said Puneet Gupta, principal analyst at I.H.S, the sales forecasting and market research firm.
According to Gupta, the maker of the car that sports a three-pointed star logo always had the first mover advantage in the country. It had, however, lost traction in the absence of models that can compete with rivals such as Audi and BMW. “They have been very aggressive in 2013 with models like the A-Class that has helped them take competition head on.”
Gupta expects the luxury car market in India, which includes sales from Jaguar Land Rover India, Audi India, BMW India and Mercedes India, to expand to 34,000 units by end of calendar 2013 from 28,000 units in 2012. The market for such vehicles account for less than 2% in the total passenger vehicle market.

Nissan to sell cars online in India

                                                                          

New Delhi: Japan’s Nissan Motor Co. said on Monday that it will start selling its cars online in India, following the example of Skoda Cars India Pvt. Ltd.
Customers will be able to book their cars by paying with a credit card. The car will then be delivered to the customer by the nearest Nissan dealership, the company said in a statement.
Skoda had started this service in October this year. A customer can book a Skoda vehicle by making an advance payment of Rs5,000. The customer will be fully refunded if he chooses to cancel the booking.
Experts said it’s an experiment, which may work for a company like Nissan, which has few sales and service points and it will gain in the smaller cities and towns.
Japanese automaker Nissan was late in entering the Indian market and it started selling its products in India from 2010. It has at least 100 dealerships with only six in the national capital region, a Nissan India spokesperson said It sells models including the Micra, Sunny and Terrano.
Praveen Sinha, co-founder and managing director of Jabong.com, said if Nissan could crack the markets and customize the delivery options to consumers, it has the potential to fulfil a latent demand, especially in smaller towns.
To be sure, websites such as eBay and olx.in sell second-hand cars. Online retail accounts for a minuscule $600 million (around Rs3,600 crore), compared with India’s $518 billion brick and mortar retail industry, according to a report by consulting firm Technopak. E-commerce has a potential to grow to as much as $76 billion by 2021.
Sinha said that in markets where dealers are not present or are scarce, consumers largely travel to larger cities or book vehicles through brokers. “If the company can target such markets then there might be sizable orders.”
Nitish Tipnis, director, marketing, Hover Automotive India, (Nissan’s national sales company), said that buyers doing research about cars on the web before making a purchase prompted the company’s decision to sell the cars online.
Nissan India is putting in place suitable payment gateways with the help of specific car portals to ensure timely delivery and service at the time of purchase.
According to a study by the Boston Consulting Group done earlier this year, 56% of Indians who purchased a car had access to the Internet. Of these, 22% used the Internet to do preliminary research.
“It seems like a logical step to take, given that when it comes to buying vehicles a large number of consumers do rely on the internet for research and pricing. Pre-purchase research is a big thing online,” said Arvind Subramanian, partner and director at Boston Consulting Group.