2) Evaluating the Offers

With fuel prices sky-rocketing and ever increasing car loan rates, it is sometimes really difficult to look for the best car loan for you. Still, one will have to understand a few key things while evaluating dealer offers. Sharma says, "There have been instances of a non-standard loan product at 7 percent interest rate working out to be more expensive than a 12 percent interest rate standard loan because the non-standard product had a different compounding base and wasn't on a monthly reducing basis." For example, a loan amount of 3 lakh, with 13 percent interest rate for 5 years, amounts to 6,753. If the dealer decides to give a discount of 20,000 on 3 lakh, then the EMI falls to 6,303. Instead, the dealer can also reduce the discount from the rate of interest, which amounts to about 9.5 percent. It entirely depends on the customer what he/she wants to choose. So, the dealer ought to disclose these nitty-gritty’s to the customer.