Now, I need some help with the EMI calculation. The car is around 24 lakhs, and I plan to pay 5-10 lakhs using my credit card, with the rest financed through an EMI. I'm not a fan of this approach, but my dad has experience with car EMIs, and I don't. Additionally, the Hyundai executive mentioned an EMI interest rate of 8.85%
1. Definitely ice >>>>ev any day. Hyundai is reliable, fun to ride. But not safe and little expensive to maintain(depends on service centre). But I am sure you have read reviews and have your priorities. So we shouldn't delve into those.
2. As you have your own business you should register it under firm's name. Registration and insurance is higher but depreciation benefit will cover it very easily. Technically it should be used only for firm's business and should have direct value addition but As long as you aren't putting a lot of vehicles in firms name it shouldn't be a problem. Even if the advance was paid under your father name, you can still change, no issue as long as they haven't registered the car.
3. Buying on emi isn't such a bad idea. Cuz you can claim the interest as expense. as per your tax bracket you save a portion of that interest expense. So instead of paying cash if you invest that capital, you will definitely earn more. Also everyone has fy target, you could get a good deal.
4. If you pay through credit card also you can save good amount. Most dealer will ask for 1.5-2%. But you can negotiate it. Many people have paid full amount through card without paying anything extra. Depends on negotiation. But it will be tough for a car in high demand like Creta. Still you should be able to get it down to 1%. Which you can recover during bill payment using hdfc esp/indusind/idfc wealth/rbl etc.
Your infinnia will give 3.3% right? Best way is to pay advance through cc. Most of the time they Don't ask for extra during booking. Once they accept CC even for a small amount, they are bound to accept for rest. It is not a legal issue. But if they don't accept it, it nullifies their business agreement with bank, which can cancel their pos machine.
It also helps to find mcc code to calculate what will be final return. You can also ask if dealer is accepting prepaid cards. That will give you better return. you can buy some this month and rest next month.
5. It's true right now interest is at highest. So floating rate will be beneficial in long run. But do check what is the reference rate. And how frequently the rates change. Also you have to check in case of interest change, will emi be constant. What they do in case of interest increase, is they keep the emi constant. So term increases. And you end up paying much more. Also they don't even inform while doing so. Many people got screwed during financial crisis and even during covid because of this.
6. You can negotiate processing fee also. If you have hdfc preffered or imperia a good portion of processing fee is waived. But if you plan to take hdfc loans, you must check preclosure fee. Hdfc preclosure fees are pretty high.
In future if interest rates drastically increases or you have a lot of cash but don't have investment opportunity or may be want to decrease debt exposure for home loan or something, you must have a way out. So preclosure Clause is pretty important.
