Look Beyond the Ex-Showroom Price
The ex-showroom price is the figure manufacturers advertise, but it's just the starting point. This price includes the car's factory cost, GST, and the dealer's profit margin. However, it excludes several mandatory costs that make up the final 'on-road'
price. The on-road price can be 10% to 20% higher than the ex-showroom price, so basing your budget solely on the latter is a common mistake that can lead to financial strain. Always begin your calculation with the total drive-away cost in mind.
Deconstruct the On-Road Price Invoice
Always ask for a detailed, itemised breakdown of the on-road price. This typically includes RTO registration, road tax, and insurance. RTO and road tax are fixed government charges that vary by state, but it's wise to verify the correct percentage for your state to ensure the dealer isn't overcharging. Also, be wary of 'handling' or 'logistics' charges. These are often added by dealers to inflate the price and can frequently be negotiated or removed entirely.
Challenge the 'Essential' Accessories Kit
Many dealerships will bundle an 'essential accessories' package into the final price. This kit might include items like floor mats, mud flaps, and a car cover at a highly inflated cost. Dealers make a significant profit on these packages. You have the right to refuse this kit. Often, you can purchase the same or better quality accessories from the aftermarket for a fraction of the price. If you do want the convenience of a dealer-fitted kit, don't hesitate to negotiate its price aggressively.
Evaluate Insurance and Warranty Options
Dealers almost always include an insurance quote in their initial on-road price. However, you are not legally required to buy insurance from the dealership. Before agreeing, get quotes from at least two or three external insurance providers online. You'll often find a much cheaper premium for the same coverage. You can use these external quotes as leverage to ask the dealer to match the price or simply buy your policy from the cheaper provider. Similarly, carefully consider extended warranties. Understand what they cover and if the cost is justified for the potential benefit.
Don't Skip the Pre-Delivery Inspection (PDI)
Once you've finalised the price, the last crucial step is the Pre-Delivery Inspection (PDI). This is your final opportunity to check the car for any defects before it is registered in your name. During the PDI, inspect the car thoroughly in broad daylight. Look for any scratches, dents, or paint imperfections. Check that all electronics, lights, and switches work correctly. Verify the VIN on the car matches your paperwork and ensure the tyres are not more than a few months old. Also, check the odometer; a new car should typically have less than 100 km on it.
