How to buy a car: Here's a cheat sheet to land the best deal

Once you have a few cars shortlisted, you’ll need to decide how much money you can spend (as opposed to want to spend — and we are not talking just about the dealer price of the car). How is this important? Well, the thumb rule is that your total outgo on the car, including fuel, insurance, maintenance costs, etc, should be about a quarter of your monthly household income. Essentially, you can’t only consider the car’s retail price but need to take into account your expenditure on the vehicle as well. Further, in an ideal situation, your car shouldn’t cost more than about 40 percent of your annual income, and if you’re taking out a car loan, your EMIs or equated monthly instalments shouldn’t constitute more than 20 percent of your monthly income. A car should be a thing of joy, not a burden that you have to bear.

Pick the car you want

Now that you have your needs and budget sorted, it’s time to select a car —which is easier said than done, given the wide range of choices available today. Don’t make the mistake of going purely by discounts offered by manufacturers and/or dealers. What you need to do is take a decision based on the brand’s reputation, reliability track record, resale value, after-sales experience and network, and warranty, while also keeping in mind the needs you identified earlier. Sure, car-buying is an emotional experience, but there needs to be some cold logic injected into the proceedings too. There’s no point buying a car that you really like but which you’ll have to go the literal extra mile to service, for example. Importantly, pick the safest car you can afford—look up its safety features and crash test rating and try and pick a model that has at least a three-star Global NCAP test rating.

Petrol, diesel, CNG, EV

Do you drive roughly 70 to 80 km per day? If you do, a diesel car makes sense, since you will recover the extra money you spend on the car in around three years (diesel cars are more expensive to buy). You could also consider an EV or electric vehicle, although charging is still a bit of a hit-and-miss affair in this country, especially if you have to drive out of your city; if your driving is largely within the city, an EV still makes a lot of sense, especially if you have a charger at home. Petrol cars are the cheapest of the three, but of course, they tend to be the least fuel-efficient, and petrol costs the most; they are, however, the option to pick if you want driving pleasure, refinement and performance. There’s also the CNG option (which is very limited in terms of models), but unless you’re very particular about squeezing every last drop of fuel for all its worth, it’s not that great—the cars themselves tend to be low on performance, boot space is compromised by the CNG tank and filling stations are thin on the ground.

Consider other factors

If you’re driving primarily in big-city traffic, a car with an automatic transmission is probably a good idea, to save wear and tear on your left leg; cars with manual gearboxes are usually a bit more fuel-efficient and cheaper to buy, on the other hand. Features like alloy wheels, sunroof, exotic colour schemes and so on look great, but they keep sending the price of the car northward—have a think about whether you really need (or will use) all of these. Picking a slightly older model year of a particular car will bring down your overall buying price, but it’ll also reduce your eventual selling price, so keep that in mind as well.

Check out all the offers

These days, automotive companies and dealers offer all manner of discounts and deals year-round. This is generally a good thing for a buyer, but you also need to carefully consider their actual value. For example, it’s common for dealers to bump up the prices of accessories and then offer them for free, to make you think you’re getting a big discount. It’s usually better to just ask for a cash discount instead, if you can.

Also, it’s perfectly okay to shop around at different dealerships and compare prices; when you leave the first dealership, the lowest price they offer you will help you to drive a harder bargain. You can also check prices at dealerships outside your city, but be aware that registration will involve a little more work, and when you sell the car, the formalities will have to be completed at the regional transport office there as well. Make sure you’re aware of every element of the total price of the car—there are hidden charges like delivery costs that a dealership often won’t tell you about until the last minute.

Take a proper test drive

Dealers sometimes will tell you that a test drive car isn’t available, or that you can only drive it for a short distance/time. Insist on a proper test drive to your satisfaction, and if they refuse, walk away. Only a real-world test drive will tell you if it’s the correct car for you, no matter how much online research you’ve done. Often, the picture you have in your mind of the car and your reaction to it in real life will differ widely. You may find that the seats aren’t comfortable, for example, or that you don’t like how it rides and handles.

Wrap up the deal

Once you’re fully satisfied with your choice of make and model, make sure all the paperwork is made out in correct order and read all the fine print, especially in the financial documents if you’re taking a loan. Hopefully, your waiting period won’t be too long, and once the car is delivered to you, check to see that the engine and chassis numbers match what’s written in the paperwork. Take a test drive again, to ensure that there are no obvious issues with the car. Once done with all this, enjoy the newest member of your family—because that’s what a new car is.