When someone asks me the year of my birth, I tell them, and volunteer some additional information. I let them know I am a December-born. Here’s what is implied: I have seen very little of the year I was born in, and all of the one immediately following it. So don’t I belong more there than here? But no matter how hard I may try, deep down I know I can’t win the battle against facts. I will be forever stamped with my year of birth.
So it is, with automobiles. A car made this year and bought this year-end, but registered early next year, will still be known by its year of manufacture. Not only the registration certificate book issued by the local Regional Transport Office, but also the vehicle’s body will bear this fact, permanently. The Vehicle Identification Number (VIN) is the automobile analogue of the DNA. Incidentally, there are tools online that decode an automobile’s VIN and present its history to you.
So, should someone defer buying the machine of choice and wait for a 2018-manufactured version of it to ensure a better resale price on it years down the line? An SUV-sized “no” to that.
Numbers that seem to go against year-ends actually work more for them than against them. Under most models, year-end cars come with attractive discounts, which can later offset what the buyer may be losing on the resale front. More about this, later.
On the twin questions of what is the best time of the year to pay a visit to the car showroom and why, Vignesh Ramakrishnan, who runs an online new car buying platform, has this to say: “Beyond any doubt, November and December. During this season, various factors are stacked in favour of the buyer. Manufacturers want to clear their inventory, and therefore, support dealers with special schemes, including straightforward cash discounts and exchange bonus, that could be offered to buyers. If a particular model is found in large numbers, the pressure to clear them will be high, and therefore, the discount offered on it will also be high.
Dealers too are in a hurry to clear their stock. If cars have accumulated over four or five months, they may want to push them. A credit line may be running on these cars. And, they are better off clearing their inventory than holding it and allowing interest to accumulate on it. Towards this end, besides offering the discounts coming from the manufacturer, they may also reduce their margin of profit and push these cars, because they have to invoice as many cars as possible by December 31. Every quarter, car manufacturers increase their prices. So, the end-of-the-quarter purchase is a better idea. On that count too, December is a good time.”
Prominent among other factors favouring a year-end purchase are choice and delivery.
“Most of the time, in December, dealers’ stock includes significant carryovers from earlier months, especially October and November, which mark the festive season in India. If you look at month-on-month growth in production numbers, every car manufacturer will witness a spike in October and November. So, in the last two weeks of December, when car manufacturers actually take a break from production and focus on maintenance, dealers will have quite a range to offer the buyer.
So, it is normally easy to get cars with specific features under each model. And delivery time is also likely to be quicker,” says Ramakrishnan.
Here’s one more question a car buyer is likely to have. Won’t buying a 2017-manufactured car lying in a dealer’s godown in 2018 give him all the afore-mentioned benefits?
“From the consumer’s point of view, he may have to make a sacrifice. The choice would have shrunk, as most cars in the dealer’s inventory would have been cleared by December. The buyer may not get a car with the colour of his choice, or any other feature,” says Ramakrishnan.
Now, the question of resale value. If a buyer is smart enough to find out about the available discounts in a year-end car purchase deal, and get them, should a slight drop in resale value matter?
Sometime ago, a thread of comments on this topic on teambhp.com threw up an interesting observation. One participant suggested that the amount saved through year-end discounts, if invested wisely, could lead to gains that would far outstrip any loss resulting from reduced resale value.
