HOW
DOES IT ALL WORK:
Once you have
announced your intention to buy a car on finance, and enquired with a financier
for a quote, be ready to go through the following steps:
• A sales person from the financier or one of their DSA's person will
contact you to understand your requirement. A DSA (Direct Selling Associate)
is an agency to whom the financier has given the responsibility of acquiring
customers. The sales / DSA person will give you a quote either across the
table or maybe with a lag in case he needs prior approvals before quoting.
Also the documentation requirements will be made known to you.
• Based on the initial quotes from a number of financiers you need
to shortlist a set you think that suit your requirement the best. Thereafter
you should bargain with the selected set for the best deal.
• Once you have finalized your financier and the scheme details, the
sales person from the selected financier will give you the final quote and
request for the documents that he has already appraised you of. On collecting
the necessary documents, the sales person initiates the approval process.
Based on your documents, your eligibility is determined (mainly the principal
amount, tenure and IRR). On being found eligible, the financier conducts
a Field Investigation to verify your address and a few other basic details.
Sometimes, if applicable, your credit history is also crosschecked with
other financiers.
• Once the Field Investigation gives the green signal, the scheme is
processed, Down Payment and Post Dated Cheques (PDC) towards the instalment
payments are collected from you by the financier and the appropriate agreement
(depending on the nature of financing) is signed. Thereafter the financier
makes a payment of the necessary amount to the dealer towards the purchase
of your car. The financier will give you a Amortization table to indicate
the repayment dates.
• On delivery of the car it is registered and insured, and an entry
is made in the RC book to indicate the claim of the financier on the car.
A copy of the RC book has to be submitted with the financier.
• On the due date the financier deposits the PDC towards instalment
payment. In case there is a default, the financier will get in touch with
you and seek a payment. If the default is for 1 to 3 instalments, the financier
usually tries to resolve the issue by a dialogue. Beyond 3 instalments default,
the financier is forced to invoke legal measures to recover the monies and
as the last resort may take re-possession of the car. The last step is taken
only when all other doors for resolving the payment problem are closed and
there is no further room for negotiation. The fact is that one defaulting
contract on an average wipes off the gains from 20 normal contracts. The
recovery policy vary from client to client and in case you run into troubled
times during the tenure of the contract, you can request the financier to
reschedule the contract which most financiers are open to doing once they
are convinced of your genuineness of your request. This does save you from
the hassles of legal processes and repossession blues. |
January 2002