How to Get the Maximum Discount on Your Car Purchase

You always feel that you could have got a better deal on your last new car purchase. If you are buying a new car and are afraid of being taken for a ride by the dealer, go through this car discount negotiation guide and make maximum out of your new car deal.

There are at least seven types of discounts one can ask or bargain for from a new car dealer. New car buying is a process in itself and consists of numerous individual small deals. These deals might look insignificant at first glimpse but when you total them up, the entire amount of the discount is more than 10% of the total price. All these discounts of course majorly depend on the type of cars and their demand in the market.

Listed below are various major discounts that you can ask for from your dealership:

Dealer/OEM Discount: This is the discount provided by the manufacturer or the dealer. In most cases and most times of the year, manufacturers/dealers offer some discount/offer/deal on a new car. Please don't expect any discount if it is a newly launched car or it is in great demand i.e. it has a long waiting period. The dealer will give you a part of this discount without asking but you will have to bargain in order to maximize it. Unless the car is extremely popular, you may consider a 1-5% dealer discount on a new car. This discount in fact can go as high as 10-15% if the car has no demand at all.

Corporate Discount: If you are working with a PSU company, a big MNC or a highly reputed corporate firm, ask the dealership for a corporate discount. Manufacturers offer corporate discounts to attract employees from big companies. Even if you are not sure about the eligibility of corporate discount, ask the dealership about it and confirm whether you are eligible or not. Car manufacturers provide their dealers with a vast list of corporates for which the discount is applicable. A typical corporate discount is in the range of 1-5% (not more than Rs. 25,000 normally) and is independent of the dealer discount. It comes from the manufacturer.

Loyalty Bonus: A few manufacturers offer loyalty bonus to retain their existing customers. If you already own or have owned a car of the same manufacturer, you are eligible for a loyalty bonus. The typical loyalty bonus amount is 1-5% (not more than Rs. 20,000 normally). This bonus is not offered by every manufacturer but there is no harm in asking.

Exchange Bonus: If you wish to trade-in your existing car for a new one at the dealership, ask the dealer for an exchange bonus. Dealer gets a good margin on your used car and hence happily offers an exchange bonus. The exchange bonus should be in the 1-5% range. However, if you are not in a hurry, it is advisable to sell your car yourself through an online portal or sell it to an individual directly. By cutting out the middleman in the sale, you save a lot of money, typically 5-10% of your used car’s price. 

Discount on Finance: Car finance companies give about 0.5-2% payout to their dealers/DSAs for selling loans. As per current market norms, despite the fact that dealer passes on most of the finance payout to the customer, he earns around 0.5% on your finance deal. Ask for the maximum finance payout.

Discount on Insurance Premium: Ask the dealer for a discount on the insurance premium of your new car. Insurance providers offer a margin of up to 40% to dealers. You can ask for a discount of up to 30-35% on insurance premium (excluding third-party liability and service tax). If the dealer is hesitant in giving you discount on your car insurance, ask him if you can get it done on your own. Please note the dealer has the right not to sell you a car if you don't opt for insurance from him. However most of the dealers will not create a fuss around it.

Discount on Other Charges: There are several hidden/apparent charges levied on you by your new car dealer. Sometimes the charges look justifiable but more often than not, they are too much. You can ask your dealer to give you discount on registration charges, handling charges, service charges etc.

Now, if you put together all the above seven discounts, you will find that you have saved a substantial amount on your new car purchase. Even if you manage to get 3-4 of these, you are a winner.

Hope the above helps you to be an informed buyer. Do give your valuable feedback on this article.