[ajayc123]

Psychology, Economics and Human Behaviour

Daniel Kahneman, professor emeritus of Psychology and Public affairs at Princeton University was awarded the Nobel prize in Economics. What? A psychology professors gets an economics prize. Let’s leave that deliberation and reasoning for another day.

Many years ago Kahneman had visited the chief investment officer of a large financial firm, who told him that he had just invested some tens of millions of dollars in the Ford Motor company. When he was asked how he made this decision, he replied that he had recently attended an automobile show and had been impressed. ”Boy, do they know how to make a car!” was his explanation. Thankfully, we are talking cars, but are we?

Kanhneman points this out as an example of human behaviour, where judgements and decisions are guided directly by feelings of liking and disliking, with little deliberation and reasoning.

Jumping to Conclusions

Kahneman further goes on to say that jumping to conclusions is efficient if the conclusions are likely to be correct and the cost of occasional mistake acceptable, but it is risky when the situation is unfamiliar and the stakes are high. There are circumstances in which intuitive errors are possible, which may be prevented by deliberation and reasoning.

Finally Cars

We continue to see this trend that a lot of us are so eager to book a vehicle, or at least many of those who have booked a vehicle, are so eager to announce it on social media. More so, the booking is done and dusted, even before the price reveal. Are we jumping to conclusions? The frenzy almost looks like the “Fastest Finger First” segment of the TV program “Kaun Banega Crorepati”.

So I thought, let’s have this poll to find out more about this behaviour, and do a bit of “deliberation” and “reasoning” on this trend, with the hope to surface some ideas that could be of use to many of us to decide if we should book our vehicle before the price reveal.

You could relate to your past experiences. If you had booked before price reveal in the past, how did it turn out? If you hold a booking now, done before price reveal, what is your conviction? If you never book before price reveal, why you never do? Are you helping yourself or the manufacturer or both?

Looking forward to your polling and commentary on your poll choice.

[GTO]

If the car looks promising (XUV700, Carens etc.) & I have a serious purchase intent, I definitely would. Helps being ahead in the que, and if its overpriced or I don't like it after a test-drive, I will anyway get a refund. These days, the OEMs also start drip-feeding information before the unveil & launch. That, combined with scoops, does give one a reasonable idea of what to expect.

Of course, an entirely different matter that I don't prefer to buy the 1st or 2nd model year of any freshly developed car. Year 3 onward is my comfort zone as by then, most of the teething issues & niggles are ironed out. All the cars I currently own are either facelifts or a bit late in the model year.

[Eddy]

I would not have done it a year back, when the waiting times were manageable. If I had to buy a car today, yes I would book even if I was not sure of buying a particular car.

And if I were sure, I would book at multiple dealers too. The wait times are ridiculous!

E.g. If I was in the market today, I would have booked the HyRyder or it's Maruti equivalent.

[SR-71]

More than the price reveal, I would be avoid booking until I know what features it carries. I dont mind paying higher prices, but would be annoyed if I am shortchanged in terms of features for the price I pay.

[Nilesh5417]

I have done it with my purchase of Ecosport so yes.

These days, the price predictions are discussed at length and you get a fair idea of the price range if not exact price per variant. If one is truly looking for a car and has a budget in mind (with some buffer), i feel it is usually ok to book without price reveal. Just not too early maybe.

Plus the option to cancel the booking is always available once the prices are announced and the price doesn't suit you.

[ajayc123]

One of the points that comes to my mind is: would the booking data before price reveal have any bearing on the pricing to be released later? For example, would a very strong booking pipeline encourage manufacturers to price on the higher side, and vice versa, would a weak pipeline encourage them to price slightly lower? Do manufacturers use the booking data for pricing purpose?

Are we making the car more expensive for us by showing too much enthusiasm?

[jalex77]

Not only will I not book a vehicle before prices are announced, but I'll wait for six months atleast to see how the vehicle fares and proves itself on open roads. I bought a Duke 200 in 2012 and in less than three months of its launch. I ended up being a 'test rider and input provider' of sorts for them for future updates for a while. I don't have the time or energy now to be that 'test rider/driver' who actually paid the company upfront for testing and providing feedback for better products.

[SSD2122]

No. I have never booked one before price reveal until now. But come to think of it; with prices increasing so frequently in recent times, it would make sense to book one earlier if provided with price protection.

[achyutaghosh]

For me it is not about the price, but rather, about the brand.

Irrespective of pre-information available (or not), there are certain brands i distrust- like Tata, Mahindra etc- products from their stable i would not touch for atleast 2 years post launch.

Brands that i trust- still might think about booking before price reveal.

[Axe77]

My response is more in light of the recent state of the Indian car (and superbike) market what with long waiting periods, limited supply, chip shortage, frequent price revision, etc. I don't believe I've ever pre booked a car before 2022. With that context:

If I'm very seriously interested in the product, yes, I would. This is subject to the amount being "fully" refundable of course.

Two key reasons would drive this:

1. To be ahead in the queue if I decide to pull the trigger on launch; and
2. Improving chances of launch price protection if I expect the product to attract introductory pricing.

What I would not pull the final trigger on is to confirm a buy, without a proper test drive to my satisfaction and complete knowledge of variant, features, specs etc. All of this is always known at launch though.

I did follow this course of action for my recent Meridian booking as well, which I 'soft booked' some months before the actual launch and price reveal. At the time, the Kodiaq running out of orders within a couple of weeks of launch played its part in influencing my decision.

A third minor benefit is that you do get quicker / more ready access (mostly) if you've made an early soft booking, compared to walk-in prospective buyers who arrive at launch. At least that's my hope and perception. With the Meridian too, they gave me two test drives within a week of launch. One regular 3 - 4 km sorts and then another which was almost 45 kms long starting early AM on a weekday.

Ironically neither of the two points listed above would have been so critical in the case of the Meridian with its relatively lukewarm reception by the market, but the amount was not big so I'm not fussed either way, specially since I did ultimately buy it.

[pannags]

Yes, I would.

For one, most often than not, dealers offer a full refund if you decide to cancel. On the other hand, you can end up having long wait periods that can continue months after the official launch. In fact, going back in time, I lost interest in the EcoSport because of long wait periods since I waited for the initial feedback to trickle in.

Therefore, if the vehicle in question sparks your interest and intent, I believe there's no harm taking the plunge.

[Mumbaiker]

Yes I have already done that.
Given the current waiting times and my requirements, I have no choice but to book the car and wait for the price reveal. If the price isnt within my budget, I get 100% refund.

[sreejithkk]

No. I prefer to evaluate the variants and pricing before booking any vehicles.If possible only after a test ride but in most cases, test ride will not be available where vehicles launch and price reveal are done together.

[rishi.roger]

If it was not for the painful wait times that happens due to queue, I would not pay in advance.
However, I recently did so for Maruti Brezza and I didn't like its pricing after reveal so I cancelled it. (Fortunately, they did not deduct a penny for it.) - So if the manufacturers don't deduct money, I think I might.

[ajayc123]

Interesting inputs. What I am getting from quite a few folks is that if there is no significant risk (fully refundable booking amount), there's no signigicant cost in backing out, in case the price, when revealed is nor appealing enough.

Which is a fair point from the prospective buyers standpoint.

However, another related question that comes to my mind, what is the point in taking advance bookings and then later expecting many of those to be cancelled after price reveal?

So much wasted energy by so many potential buyers, busy dealer staff, without amy tangible outcome.

All this can be avoided by simply releasing price at launch and taking bookings after that.

But still the prevailing common practice by most brands is to take bookings much before launch. And sometimes price reveal does not evem happen even at the time of launch (e.g. HyRyder).

There has to be a solid reason behind such practice, something, I am hoping may get answered in this thread, but not yet. Why are they engaging prospective buyers in this way? What are they trying to achieve?

Let me ask a direct question. How do these guys use the booking data ? There's no point collecting it, if they can't put it to good use?