Full down payment or installment plan?

I am trying to buy a TVS Scooty here in Bangalore. The dealer is offering an installment scheme for the vehicle. The dealer is also offering me a choice of paying the full amount and buying the vehicle.

How do I go about evaluating whether should I pay the full amount and get the vehicle or should I choose his installment plan. I am sure some of you have bought things on installment before and I am curious as to how you decided.

Thanks for your input.

In most cases, I will choose installment plan only if I don't have the money to pay full down payment. In general, the interest rates are always very very high with automotive dealers.

Sharmili,

In order to decide whether financing is better, you just need to find out the interest rate charged by the dealer. Once you find the interest rate, you can decide to take the installment plan if the interest rate is lower than what you might get else where.

Sometime ago, I put together a simple excel sheet to calculate the interest rate of an installment plan. See if this is helpful to you in determining the interest rate.

Let me know if you need additional help.

Shalini

P.S - This forum is not allowing me to upload excel file, so I have zipped it.

Thanks for sharing