Car Festive Season Deals: Triple Benefits for Buyers as GST Cuts, Low Loan Rates, and Discounts Arrive

This year’s festive season could be the best time in years to bring home a new car. With GST 2.0 reducing tax rates, banks offering lower interest on auto loans, and carmakers rolling out attractive discounts to lure buyers, experts say customers can enjoy triple benefits when shopping for their favorite models.

GST Cuts to Make Cars More Affordable

Starting September 22, 2025, the government will implement new GST rates on internal combustion engine (ICE) vehicles. The GST Council has reduced the rate on small cars—defined as petrol vehicles with engines up to 1200cc, diesel vehicles up to 1500cc, and overall length not exceeding 4000 mm—from 28% to 18%.

This change is expected to lower prices by at least ₹50,000 for popular models like Maruti Swift, Hyundai i10, Hyundai i20, Tata Punch, and Maruti Baleno. Industry experts believe the reduction will encourage more buyers to consider small and mid-size cars, boosting demand during the crucial festive months.

The timing is significant, as the new GST regime will come into force on September 22, coinciding with the beginning of Sharadiya Navratri. Traditionally, this is considered an auspicious time to make big purchases, especially cars and homes.

Banks Slash Car Loan Interest Rates

Adding to the festive cheer, banks have lowered car loan interest rates following a 1% cut in the RBI’s repo rate earlier this year. According to BankBazaar, the average interest rate for a five-year loan of ₹10 lakh now ranges between 7.8% and 9.99%.

• Punjab National Bank: Offering loans at just 7.8%, resulting in an EMI of ₹20,181 on a ₹10 lakh loan for five years.

• Union Bank of India: Close behind at 7.9%.

• SBI, Axis Bank, and IDBI Bank: Also offering competitive rates of around 8%.

These reduced borrowing costs mean buyers can save significantly on long-term EMIs, making cars more affordable not only upfront but also over the duration of the loan.

Carmakers Likely to Offer Bigger Discounts

Automobile companies, facing weaker demand in recent months, are expected to capitalize on the GST cuts by launching aggressive festive offers. Experts believe manufacturers will sweeten deals with higher discounts, exchange bonuses, and financing schemes to attract buyers.

“Carmakers want to revive momentum in the auto market. With tax cuts now in place, they will be eager to make the most of the festive season,” says an industry analyst. Notably, the highest sales in India traditionally occur around Dhanteras and Diwali, and 2025 is likely to be no exception.

Tips Before You Buy a Car This Festive Season

While this season presents an excellent buying opportunity, experts suggest keeping a few important points in mind before finalizing a deal:

1. Wait for Price Updates Post-GST: GST 2.0 will officially take effect on September 22. Only after this date will the exact price reductions for different models be clear. Make sure you compare the updated prices before deciding.

2. Check Loan Options: With banks competing to offer lower rates, compare car loan offers carefully. Even a small difference in interest rates can save thousands of rupees over the loan tenure.

3. Get Multiple Quotes: Approach at least three dealers for the same car model. Often, the dealer offering the highest discount or added benefits will give you the best deal.

4. Factor in Long-Term Costs: Alongside discounts and EMIs, consider insurance, maintenance, and fuel efficiency when making your decision.

A Golden Opportunity for Buyers

With GST cuts lowering ex-showroom prices, banks easing loan rates, and festive season discounts around the corner, 2025 is shaping up to be a golden opportunity for car buyers. Whether you’re planning to buy a compact hatchback, a family sedan, or a feature-loaded SUV, waiting until after September 22 could ensure maximum savings.

If you’re planning to drive a new car home this Navratri or Diwali, this festive season might just deliver the best deals in years.