I remember the first time I purchased a car, a Japanese Alto, from a small time businessman down South. My job kept me busy at the time so I sent my uncle to take a look at the car when I first heard of its availability. By that time I was also fed up with the whole affair of looking up cars, inspecting them, trying to detect unobtrusive faults the owners never disclose – so I told him to go.
(What you can learn: never let your job activities interfere with your decision of purchasing your car, brand-new or used, go see it yourself, never outsource the scrutinizing part. Also never dishearten yourself. It takes time to find a car that would satisfy you)
He called me from there, evidently walking round the vehicle, giving me a fantastic description of what he is seeing. I told him to drive with the owner to the nearest mechanic thereabouts and get his viewpoint also. He did that – the mechanic had showed some minor defects – and we decided to buy.
(What you can learn: never test the car around the vicinity of seller’s residence. He can bribe those people; sometimes he is so friendly with them he would not have to bribe them even. Not applicable if you are buying a brand-new vehicle)
My uncle was not good at technical aspects of the situation but his PR skills were superb and he was very good at negotiating about things. He struck a deal to buy the car for 1.5 Mn LKR. The Owner had wanted 1.6.
(What you can learn: always obtain the services of a competent mechanic with a proven track record to appraise what you are going to buy. PR Skills are not enough. Use several persons to bring down the price. Go-talk-buy style can be disadvantageous. But for new vehicles the tactic is bit different; you try several sellers.)
Earlier I had arranged matters with a Leasing Company to fund my purchase and I gave them the thumbs up and they got in touch with a valuation company in the area. That done, the Seller was to bring the car to his nearest branch of the said Leasing Company next day and I was to pay him 0.5 Mn LKR of key money. The Company agreed to provide me the rest.
(Bigger the initial payment, lesser the monthly installment you have to pay these Leasing people. Generally you are expected to pay back the lease amount, in this case 1.0 Mn LKR, in 60 installments i.e.12 installments each year for five consecutive years.
(Read their terms and conditions of the leasing contract carefully. You would also have to pay them additional charges for providing you this facility. You would also have to pay an annual insurance premium too, so when that comes combined with leasing installments you may find it bit trying to settle your liabilities.
(It would be nicer to purchase your brand-new or used car with a single payment but a majority of buyers prefer leasing. Mind however, although that paying bit by bit is easy for your wallet, they add up and the total cost could be significantly more than what was due. Looking back now I see I have paid that car more than 2.0 Mn!)
It was the first time I saw the car, and I immediately knew my uncle was clearly hoodwinked. One tire was already flat. Left door bore tell-tale signs of paint scraping. When we climbed in seats were worn off and we could even feel the springs creaking underneath. Air conditioning was bad. But it was not a time to turn back and I completed the transaction like a lamb and drove the car home.
(See what I mean? Go see the vehicle yourself)
But there were several things that greatly consoled me. The car had auto gear transmission, and very few of my friends owned cars with that facility. Then the car was of Japanese manufacture, ideal for reselling in second hand market.
(Always be ready for what you are going to buy would not satisfy you 100%. So buy a car that you can sell again for a bigger amount)
As for the leasing payments I had to fight hard to make both ends meet. I was earning about 50,000LKR per month and I had to pay more than half my salary, 27,000LKR to be exact as installments. I ended up doing a second job.
(Leasing is good. It lends you a hand. But make your calculations carefully. Ask them how much they would charge you for a sum of 100,000LKR as the lease amount. If they say 3000LKR, do a simple calculation. Assume you need 1.0Mn LKR as the lease amount, 3000LKR into 10 = 30,000LKR, this is your monthly installment. That way you know where you stand)
But I learned my lesson. Sharing it with you, I feel I have spared lot of people the unpleasantness they might face in future.
Bye for now, hope to see you behind the wheel of a grand car next week.