With the arrival of the festive season, car manufacturers and banks have posted attractive offers to lure customers into realising their dream of owning a car. With the torrent of promotional offers available this Diwali, it simply makes sense to splurge.
But before you buy your dream set of wheels, there are some things you should be aware of to prevent the brightness of the festivities from fading. Listed below are some of these points to note:
- Parking facilities - When planning to buy a new car, you should think through all the issues that can come up while you own the vehicle and be mentally prepared to handle them. One of the most important things to consider is the parking facility for your new car. If you live in a neighbourhood that is not safe, you should explore options to find a secure parking spot for your asset. Also, if you have a small hatchback as opposed to a long sedan, traversing narrow lanes and parking in restricted spaces will be easier.
EMI - Diwali 2017 is a time when several banks and car manufacturers are offering exciting discounts on car loan interest rates. So, if you have chosen to finance your car purchase this festive season, you have made a wise decision. However, when applying for a car loan, you should assess your monthly budget and identify whether you will be able to bear the EMIs on a consistent basis.
- If you think the cost of the car is a little too high when weighed against your monthly take-home income, then you should explore buying a more cost-effective model.
- You should also consider the car maintenance costs and price of fuel that you will have to bear as the owner of the vehicle.
- Keep in mind that a car is a depreciating asset; so the market value of the vehicle is only set to go down with age.
Car insurance - When buying motor insurance for your car, you should choose one based on your budget and insurance needs. There are two types of car insurance policies offered by insurance companies in India:
- Third-party liability insurance - This is the most basic form of insurance, and it is also mandated by law for all vehicles in the country. This insurance coverage protects you against legal liability to third-party injuries, death, and property damage. It does not offer protection to the insured car itself. Since the coverage under the plan is limited, it is also the cheapest form of car insurance. The third-party liability insurance plan is also referred to as liability-only policy or act-only coverage.
- Comprehensive car insurance - This insurance plan offers own-damage cover to the insured car. It also protects the car owner from accidental injuries and death through the Personal Accident cover. Additionally, third-party liability insurance is offered as part of the coverage. Also referred to as a package policy, the comprehensive car insurance plan can be further enhanced through the use of add-on covers such as zero depreciation cover, engine protector cover, return to invoice (RTI) cover, etc.
- Car maintenance - Most car manufacturers in India offer the first three services of a car free of any charges. So, if you are the first-time owner of a car, you should ensure that you get your vehicle is serviced on time. This is crucial for the smooth functioning of the engine and the overall health of the car as well. The date of servicing will be communicated to you at the time of purchase. Usually services are scheduled based on the number of kilometres you have driven. It can also be scheduled after a fixed timeframe from the date of purchase of the car.
Car theft - With the rising incidence of car thefts in the country, it is imperative that you park your vehicle safely and install security devices to protect it from theft. There are several approved safety devices available for all models of vehicles. Some of these include:
- Steering wheel lock - This is one of the least expensive anti-theft device that you can purchase. This device is placed on the steering wheel and locked, so that the steering wheel does not move until the device is unlocked.
- Hood lock - This device blocks thieves from accessing the battery of the vehicle by locking the hood in place.
- Tyre lock - These safety devices take a lot of time and effort to attach, and can be as difficult to unlock as well. So, this is not recommended for vehicles that are used on a daily basis.
- Electronic immobiliser - Several models of cars these days have standard car keys and fobs that offer protection to the vehicle through electronic immobilisers. These built-in microchips send signals to the car’s anti-theft system. When a person tries to use the car without these signals, the vehicle will not start.
- Car alarm - Car alarms have electronic sensors that get activated when there is an unauthorised entry, sudden movement, breaking of glass, or perimeter violations. The sensors activate a siren that alerts the car’s driver and everyone in the vicinity of the action.
- Car insurance policy document - It is crucial that a new car owner is aware of the terms and conditions mentioned in the motor insurance policy documentation. This helps him/her in taking the right action in an eventuality. So, as soon as you receive the policy document, read through it thoroughly, focussing mainly on the exclusions and claim process.
Other anti-theft devices such as gearshift locks and brake pedal locks are also effective in protecting a car from theft.
Diwali is a time to rejoice with family and friends, indulge in scrumptious food, and engage in delightful gifting. You can add sparkle to the festivities this Diwali by bringing home your much-awaited dream car. And, of course, there is nothing like being well prepared for the car ownership.
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GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017