1. Dealer finance is convenient, not automatically cheaper
Dealers can connect buyers to partner banks, NBFCs or manufacturer finance schemes. Convenience and fast paperwork do not prove that the loan is cheapest.
Tip: Identify the actual legal lender.
2. Negotiate vehicle price separately from financing
Cash discounts, exchange bonuses and finance-linked offers can distort comparison. Fix the vehicle price first, then compare financing.
Tip: Separate the car deal from the loan deal.
3. Compare APR, tenure and any balloon payment
A low EMI can be created by longer tenure, higher down payment or a large final payment. Some “low-rate” schemes can also involve lost cash discounts or manufacturer subsidy.
Note: Compare the full schedule, not the showroom EMI.
4. The lender remains after the showroom sale
Check autopay, statements, grievance channels, prepayment rules and hypothecation release because the financing relationship continues long after delivery day.
Tip: The salesperson leaves; the lender stays.
5. Quick check
Dealer EMI is lower because tenure is two years longer. What should you compare?
Answer: B - The entire vehicle-plus-loan transaction matters.