Car Loan? Let tenure decide the type of loan you take this season | Firstpost

A long discussion & suggestion to go for floating rate for long tenor on car loans, this festive season.
With the interest rates seemingly having peaked now, simple logic says go for a floating rate & get benefit thereof.

But would not suggest long tenor, esp 5 to 7 years. It is always better to go for less than 5 years. Long tenor means we are stretching ourselves, for a simple mode of transportation/commuting. Not worth it. Dream car can wait :) Savings as much important!!

A good idea would be to look at in-house finance options from some of the manufacturers also.

And last but not least, negotiate hard 

Happy & Safe Driving!

Car Loan? Let tenure decide the type of loan you take this season | Firstpost

Banks to drag finance companies of car makets to CCI - ET

The leading luxury car players, BMW, Merc, VW family ( VW, Audi & Skoda) and Toyota have all pushed for volumes through their internal finance outfits. 'A unfair trade practise', feel the leading players in banking area, SBI, HDFC, ICICI, etc.

• Unfair to banks ? May be... Sour grapes or genuine interest for customer, who may not get best deal ?! :)
• Unfair to customers? May not be. The smart customer will go for the best deal. But then, the best deal may not be really 'the best', when there is internal subvention among the manufacturer and in-house finance company
• Unfair to their own brand & long term strategy ? May be... because, by pushing internal finance outfits, they will be shutting off support from banks. Losing an opportunity to tap banks' existing customers. Remember Fiat's FISAF? Maruti grew when they looked beyond few preferred financier-players
• Does the issue deserve to be taken up at C C I by these top banks? Perhaps over-reacting!!

What about similar arrangements for trucks ( Tata, AL) and far-equipment (M&M). Also, what about two wheeler finance ( Bajaj)? Here customers can complain banks are not supporting enough.  PSU banks are not there in CV Finance. Private banks are not uniformly aggressive, in view of the cyclicality of CV industry. Some leading private banks have exit two-wheeler finance.!!

Food for thought !

http://economictimes.indiatimes.com/news/economy/finance/banks-plan-to-drag-finance-companies-of-car-makers-to-cci/articleshow/16945204.cms

Car - Buy Vs Finance

Here is the expert view on whether to buy car or finance : 

The question whether to buy a car by paying cash or taking a loan is not as simple as it sounds. In case you don’t have enough cash, it becomes easy to answer as you don’t have an option but to go for a loan. Also, any future need of money can also help in deciding the same.

But in your case it is not applicable as you have enough resources. For you the determining factors can be whether your company has a “company car lease policy”. If yes, then opting for the same is recommended as the car is purchased in the company’s name and EMIs are adjusted from salary thereby making salary structure more tax-efficient. Further, check if there are special deals in the market which makes going for the loan more attractive. If not, then taking a loan will not give you any advantage as you will be paying a high interest on the loan and your cash surplus will not be able to deliver you an equivalent interest amount. ( SOurce - Ask Mint Money, Mint )

Fully agree with the expert to go ahead & buy ( with extra 'cash discount'), if one can afford. But then, car is usually bought in India thru finance, mostly  due to the non-affordability factor. 
Those who can afford, may still opt for finance to employ own funds elsewhere ( in business) and generate interest. The perception is also, it helps 'tax planning' ! ( don't think it has changed much!)


Sadly, lease & rent-a-car have not developed here as much as in other big markets.


Happy & safe Driving !

Banks rejecting more car loans in Gulf

Acc to press reports quoting 'a General Motors official', the number of vehicle loan applications being rejected by banks in the Middle East has risen from 5% to more than 20% due to the global financial crisis, Gulf News has reported. The UAE and Qatar are among the markets that have seen a significant rise in these cases. The situation is different in Saudi Arabia, where there are more cash buyers than customers purchasing cars through bank financing, General Motors Middle East operations president Mike Devereux said.

We live in a wired world. People are waiting for an update on the bail-out request by the Big 3 from Detroit. This will be more so for GMC, a popular brand in GCC and as such more focus on the status of the bail out specific to GM.

On a lifghter note, let me share : Imagine the Middle East Without General Motors

http://wiki.gmnext.com/wiki/index.php/Imagine_the_Middle_East_Without_General_Motors

BIsB Monthly car finance prize

Bahrain Islamic Bank (BIsB) has announced the winner for the third car finance monthly prize draw. The winner for May 2008 will now be exempted from paying the remaining instalments of the car she had bought through finance provided by BIsB.

“The prize was worth BD5980.447 ($15,891) which will be deducted from the principal amount of finance provided by the bank,” retail banking general manager Abdul Rahman Mohammed Turki.

BisB’s car finance product is approved by the bank’s Sharia’a Supervisory Board chaired by Shaikh Dr Abdul Latif Al Mahmood.