It’s time for festivities
Financial institutions, white goods dealers and builders are offering good deals to attract buyers
Financial institutions, white goods dealers and builders are offering good deals to attract buyers. JOYDEEP GHOSH &
SANJAY KUMAR SINGH write II,
With the festival season beginning, it’s that time of the year when consumers are willing to go more-than-a-little overboard in their purchases. And, companies also get a little more lavish with their offers. From midSeptember till December-end, financial institutions, white goods dealers and builders will flood the market with offers.
Online retailer Amazon’s Great Indian Festival Sale will be held between Thursday and Sunday. Flipkart will hold its Big Billion Days sale during the same time. A couple of weeks back, the country’s largest bank, State Bank of India (SBI), announced a waiver of up to 100 percent of processing fee on car loans, personal gold loans and personal loans. And, a number of car companies like Honda, Nissan and Mahindra and Mahindra are giving hefty discounts. So, what’s on offer?
After three years, real estate experts believe this could be a good season for builders who price their products properly, have a good record and give good offers. “If a builder with a good reputation makes an offer which is better than the other years, I see buyers coming in this season. There is traction happening in the real estate market, and many buyers who have been waiting on the sidelines are likely to take the plunge,” says Anuj Puri, chairman, Anarock Property Consultants, adding that properties between ~70 lakh and ~3 crore are likely to see a lot of action. Real estate: Leading developers across the country are giving offers, especially on their ready-to-move-in flats that have received occupancy certificates. They are pushing these offers by saying you can end up saving on the 12 per cent goods and services tax (GST). Developers of luxury projects, especially, are offering heavy discounts, since sales are sluggish in this segment. The Satya Group, in its The Hermitage project in Gurugram, is promising a Maruti Ciaz to those who book a penthouse, and a Toyota Fortuner to those who book a villa. In addition, 12 months’ assured rent on their four-bedroom hall kitchen (BHK) penthouse.
According to Pradeep Mishra, head of Sainik Estate, a Gurugrambased real estate brokerage firm, the most common things being offered this season are free air-conditioners (ACs) in all the rooms (value about ~35,000 x 3 = ~1,05,000); modular kitchen (value ~50,000-1,50,000), oneyear free maintenance (value about ~5,000 X 12 = ~60,000), and so on. “Fewer builders are offering things like cars this season. The focus is more on offering items of utility,” he says. What should you do? Ignore offers like televisions, ACs and others because they would not translate into significant savings. However, saving on GST
is a significant amount. For a property worth ~1 crore or more, a saving of 12 per cent means a lot for the buyer. For someone who wants to purchase his first property or get a bigger one, this could be a good time as property prices haven’t gone up sharply in the past few years. As far as possible, avoid underconstruction properties. Offers on cars: The range of offers includes cash discounts, gold coins, low interest rate on loan, and zero processing fee. Hyundai is offering benefits that range from ~25,000 to ~90,000 across models, with a five gramme gold coin thrown in to sweeten the deal. Then, companies like Honda are offering free gifts on test drive and have special offers for government employees, pensioners, and self-employed professionals. Some like Maruti are promising zero processing fee on finance. Players like Volkswagen are offering exchange benefits and loyalty bonus. Datsun is promising free insurance, low interest rate (7.99 per cent) and an assured gold coin of two gramme.
What should you do? If you decide to purchase a car during the festive season, first fix your budget, then select the type of car you want — sedan, hatchback, family car, etc. Next, look at the cars that meet your criteria. Thereafter, go deeper and decide on the features you want: Petrol or diesel car, manual or automatic drive, etc. Applying these criteria will reduce the set of cars that you can choose from. Only then should you start evaluating the festive offers. First, look at what is the final on-road price, and second, evaluate the offer in its totality. Put a monetary value to each element of the offer to arrive at the total benefit.“A car, being a big-ticket purchase, should never be evaluated on discounts or offers alone. First, choose the right model, then look at the offers and discounts and negotiate the best deal,” says Shubh Bansal, co-founder, Trubil, an online platform for purchase and sale of used cars.
Offers from financial institutions:
Besides SBI’s offer, ICICI Bank has two running currently. One, if you take a home loan or transfer your existing home loan, you could get cash back of up to ~10,000 on ICICI credit card on minimum expenses of ~30,000. This offer is valid up to November 30. Its other offer includes an instant credit card for online shopping with a limit up to ~4 lakh, based on pre-checked bureau scores. The card could be used for availing various offers on shopping, travel and entertainment offered by their online partners during the festive season. City Union Bank partnered with MasterCard to offer an instant credit card with a limit of ~3 lakh. What should you do? Customers could wait for a while before making any buying decision. Bankers say there could be more lucrative deals coming soon. At present, the fee cut does not translate into a significant gain. For example: SBI’s processing fee for car loans, which has been waived off entirely, stands at only 0.5 per cent of the loan amount. That is, a minimum of ~450 and a maximum of ~9,100. “Such small numbers do not justify a buying decision of something that could cost lakhs of rupees,” said a financial planner. Adds financial planner Harsh Roongta: “In home loans, getting the processing fee waived is not tough. You can get this waiver even when the festive season offer is not on, especially from private banks.” In home loans, especially for high value loans and immediate-possession properties, private and foreign banks are today offering better deals to customers than nationalised banks.
On home loans, before looking at the loan offer, you have to ensure that the bank that you are thinking of taking the home loan from funds the property. Look at other costs on home loans like tied insurance. Banks are not supposed to tie up insurance with the loan, but in practice they do so. While it is a good idea to take insurance when you take a home loan, the insurance banks offer is more expensive. Factor in that cost into the total cost of the loan, or tell the bank that you are not taking insurance from them.