12 Tips for first time car buyers post Covid19

Covid19 pandemic has changed the way people think of public transportation. Earlier, public transport was hailed as a solution to traffic problems and pollution. Many thought buying a car is a liability and it is best to manage with rental cars, ride hailing services and public transportation. But the pandemic has changed all that. With high risk of infection in buses and trains, with cancellation of several public transport modes many are thinking of buying a car for the first time. It is a good idea to have our own vehicle at these times for emergency and personal travel. However, if you walk into a car showroom without adequate home work, you will be tricked into buying a car not best suited for your needs.

If you are evaluating buying a car in current covid19 situation, here're some crucial tips for you.

1. Diesel cars are not making economic sense anymore.

Earlier we had to calculate monthly usage and decide if it makes sense to invest in a diesel car. Now petrol and diesel cost almost the same so the economics are heavily tilted towards petrol car. For most of us petrol cars are best suited. If dealer is trying to sell a diesel car, particularly in upto 15 lakhs category be extra careful. They might be trying to clear their inventory. Petrol cars are cheaper to buy and maintain and are better option overall for most domestic usage.

2. Long term insurance is not mandatory anymore.

Earlier one had to buy 3-5 year insurance which increased upfront cost. Now it is adequate to have 1 year insurance. So keep an eye on what kind of insurance dealer is trying to push.

3. Automatic vs Manual

There're several types of transmissions- AMT, CVT, DSG, MT, iMT (intelligent manual transmission without clutch). You will get confused with the terminology and fail to figure out what is better for you. With increased fuel efficiency and convenience, automatic is preferred by many. If the car will be used by everyone in the family then automatic is usually preferred. Consult your family members and make up your mind before going to showroom

4. Be in your Budget

These are critical times and it is important to stay within budget. If you go to a showroom with 7 lakh budget in mind, sales reps can easily convince you to buy a 10 lakh car that costs 12 lakhs on road.

• Understand that on road price is roughly 20% more than ex-showroom price
• There is no end to how much you can spend on a car. If you allow sales person to take you for a ride they can sell you a 20 lakh car when you had budgeted only 8 lakhs. It is important to set your budget and stick to it, particularly if your savings are limited and disposable income is not much.
• Stretching your budget will also mean stretching your yearly maintenance amount. If you buy 12 lakh car instead of 8 lakh car, your insurance premium, loan EMI, maintenance etc will also be proportionately higher. You should be prepared for the same.
• Go to showroom with your prior research. You can get entry level sedan for the price of high end variant of a hatchback and so on. If salesperson gets a hint that you are flexible on your budget, he may take you for a ride selling a more expensive car. Stick to a budget range. If tempting to spend more, don't decide on the spot. Note down the details, come home, discuss with family, consider pros and cons and book later.

5. Selecting a variant

Car makers advertise top end variant along with price of cheapest variant. If you thought you will get all the featured advertised in the ad for the price shown, you will be in for a shock. Top end variant can cost almost 2 times the base variant. You may get overwhelmed when sales rep bombards you with information on models and their variants. Do your home work, make up your mind and narrow down your preferred options to 2 models and 2 variants. This will help focus better and not to get distracted.

Entry level or base variants are usually to make customers come to show room. These are priced lowest and will miss several cool features related to safety, comfort and entertainment. You can still buy the cheapest variant if you are sure, but most customers will end up spending more money on aftermarket accessories few months after buying the cheapest variant.

Top end variant is obviously the most expensive and will have all the bells and whistles, many of which may not be really needed. Unless you are particular about cool factor or showing off your car's features to your friends, you can save some good money by not opting for most expensive variant.

Usually the mid or near top end variants are adequate for most domestic users. Compare the features and decide for yourself. Lower upfront spend means lower tax, lower EMI, lower insurance. If some features can be added later (like alloy wheels, extra lights, reverse camera), you can buy a variant that doesn't have it. But some features are hard to add later- like sunroof or ABS or climate control. If you really need them, go for a variant that has these things included.

6. How many seats?

We like to carry our world with us. But most cars are made for 4 adults. 5 if 3 people are stuffed into second row. While this is enough for most small facilities, if you have large family you might want to think of a bigger vehicle- 6-7 seaters. But bigger vehicles also cost more to buy and maintain. Discuss with family and decide what works best for next 5 years. For example

• Option 1: Buy a seven seater
• Option 2: Buy a 5 seater and a bike
• Option 3: Buy a 5 seater now and if really needed buy another 5 seater car later.

Last row seats in most 6-7-8 seaters are not really comfortable for adults for long drives. They are suitable for kids only. A bigger car means spending more, lesser fuel economy and higher maintenance. 

7. NCAP Safety rating

Do check safety rating for the model you are thinking of buying. Several cars- like Datsun have very poor safety rating- 1 star or zero star. These are extremely unsafe. Despite of how cheap the car is or how loaded the features are. Buying an unsafe car puts your family at risk.

• Don't let car makers fool you with Euro NCAP rating. Cars made for export market will have better quality materials and workmanship compared to cars sold in developing countries.
• 4 Star or more (5 star) rating is good. 3 is just ok and 2 or below are bad.
• Safety can also vary by variant, as cheapest variants in some models may miss ABS, Airbags etc

8 Factors that influence car selection

There're several factors you should consider while buying a car

• Elders in the family would need a car that is not too tall and is easy to enter and exit.
• If roads around your home are very bad you may need a car with high ground clearance
• If your car parking area is limited then you've to mind the length and width of the car
• If your usage involved bad roads then you need to factor ruggedness and possibly 4x4
• If you need to move cargo also then boot space, seat foldability, provision for rooftop carrier etc matter.
• If you are chauffeur driven then rear seat comfort matters more
• If your family members will also drive the car then cars with multiple seat position memory, trip meters and auto transmission will come handy
• If you are not an expert driver then rear view camera, hill hold control, lane deviation warning and other safety features become important.

9. Buying from right dealer

A good dealer makes all the difference between great car ownership experience and a nightmare. Your cues could be as follows

• A salesman not knowledgeable enough about the cars and competition models
• A salesman completely rubbishing a competition product without giving any respect towards its merits
• A salesman trying to push a particular model/variant that he wants to sell, than helping you get what you had in mind
• A salesman making unrealistic promises (like mileage, resale value etc)

Check with friends, check online reviews and find a dealer trustworthy to buy a car from. If your close friend recommends a dealer with whom he had good experience, then it may be good to go with them even if their quote is not the lowest in town.

10. Things your car dealer will not tell you

Your car dealer's motive is NOT to suggest best suited car in budget for you. Their motive is to sell a high value car from their dealership to you and maximize their returns  So you have to do your research, learn few tricks of the trade and stay away from practices that are not in your best interest.

• A model that is out of production/not successful in market will be hard to sell, will not get spares easily and may get lower resale value
• It is not necessary to buy insurance, registration etc from dealer- you can get it done from elsewhere if you have a means to get it done for less.
• There could be a facelift/upgrade coming soon- check automotive blogs and news sites. Value of older model drops when a facelift is released.
• You can question various hidden charges in the invoice- transportation charges, handling charges, mandatory accessories etc. Anything that doesn't seem right ask around, demand explanation or check with experts.
• Pressurization tactics like "this offer is valid only today" are totally fake. It is not like they are shutting showroom from tomorrow. Take your time, buy a right car for your needs at right price, instead of buying a wrong car for less price.

11. PDI or Pre-Delivery Inspection

It is important to do thorough inspection of your car before it is sent for registration. This is because of multiple reasons

• A car may suffer minor dent/scratch when in dealer's custody or during transportation and is fixed at dealer level
• The car could have been used as a test drive car and have too many kms on its ODO
• The car could be too old (like manufactured an year earlier and still unsold)
• There could be internal issues not visible from outside

12. Other options- Rent, Subscribe, Buy Used cars

Buying a new car has its pros and cons. Unless you have regular usage that results in savings compared to hiring a taxi, cars are depreciating assets that loose value over time and demand regular maintenance spend even if parked unused. Using a car in different state for long term requires re-registration, insurance premium runs into several thousands every year. If your usage doesn't justify spending on new car, there are other alternatives as well

• Buy Used Cars: Good option if your usage is minimum and if you can find a good condition, accident free car at reasonable price. There are many branded used car sellers who do 100s of checks, offer some warranty and also buy back guarantee. Well maintained automobiles have a life span of 10-15 years. So cars up to 3-5 year old can be purchased and used for next 4-5 years provided they are well maintained.
• Subscription: Ideal if need is only for few months. Paying monthly subscription amount which is higher than EMI doesn't make sense for long term. If you have plan to move between states or countries, then also short term subscription might give high flexibility. Related: ZAP vs Revv Subscribe
• Rental: If you need a car only say few days a month, then renting from self drive rental agencies might be a good option.

Take a knowledgeable friend or mechanic for PDI and ensure that you are fully satisfied with your vehicle. Any doubt ask for clarification and if not convincing ask for a different vehicle.

Also beware of anti-china sentiments. Cars of Chinese origin might get lower resale value or may become targets during protests if anti china sentiments sustain.

Related: Buying used cars from Spinny *