"Enjoy now Pay later" is a well-entrenched concept atleast in urban India. Retail finance schemes have flourished mainly because the consumers are not willing to wait to enjoy the fruits of their labour. Instead of saving for years to accumulate a capital sum to purchase an asset on a future date, consumers want to enjoy the asset today and are willing to pay a slightly higher cost for it. Rising inflation encouraged the consumers to understand and accept the concept easily. Availing finance hedges the consumer from inflation.

Car finance can be very confusing. Unfamiliar words, lengthy technical contracts, and manipulative sales techniques can make shopping for finance more difficult than shopping for a car.

With the right data, the salesman will be at your mercy.

It always helps to call two or more finance facilitators while choosing a finance scheme.

Try and compare similar schemes - i.e: You will get the correct picture only when you compare a Margin Money scheme with a Margin Money scheme offered by a competitor and not an Advance Installment or Security Deposit scheme.

Understand Time-Value of Money.

1. Try to get a copy of the Agreement or contract before you get into one. Understanding the important clauses within the agreement can help you avoid a lot of trouble in future.
2. Get information about the Amortisation ( This will help you get a clearer picture of the actual interest you are paying )
3. Check whether your contract permits you to make lump sum payments in between the contract period, to help you pay off the loan faster and save on interest.
4. Find out details about the Loan Termination / Prepayment and the charges involved.
5. Find out whether the interest remains constant through the contract period.
6. What are the late payment charges?
7. How often shall you receive statements informing you about you repayment status?
8. Sign an Agreement / contract which has been filled up by the Financier. Signing blank agreements definitely do not work favourably for you.
9. Most Banks and NBFC's market their car finance schemes through agents. Try and authenticate an agents claim from the officials of the Bank or the Finance Company. You can get all ambiguities resolved, by speaking to the real staff of the Bank or Finance Company, in whose favour you shall be drawing the post dated cheques towards repayment of your Car finance Contract.
10. Confirm the Stamp Duty, Processing fees, and other incidental charges, and understand how they have been worked out.
11. Always get a comprehensive Finance Offer on paper or by Fax.