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Cost of Ownership of Car. Real Life Cost of Owning Car in India

Cost of Ownership of Car. Real Life Cost of Owning Car in India

Real Cost of Ownership of Car in India. Complete Cost Break Up Including Service, Maintenance, Insurance, Fuel Cost Breakup of Petrol, Diesel Car

 

Car Ownership Cost

Its Important to determine the total cost associated for holding a car for a period of time.

Some Facts (Diesel Vs Petrol Cars)

Diesel Cars - have generally higher cost of maintenance vis a vis Petrol Cars - 

a) Wear and Tear Items: Some Parts like Clutch & Pressure Plate, Battery, Fuel Filter, Timing Belt, Radiator Components etc cost higher in Diesel Cars Cars

b) Oil Change & Replacement Interval: Fluid Capacity and Replacement Schedule of Oils & Filter generally quicker vis a vis Petrol Cars

Between Hatch, Sedan, Utility Vehicles

Its seen that :- Manufacturers have differential pricing and generally Hatchback Cars are considered relatively economical - due to less labor cost, lesser fluid capacity vis a vis there Sedan and SUV Cars in the Segment

 

Car Ownership Cost

A New Car Ownership costs is based on 8 Factors

» Upfront Cost - Net On Road Price after all discounts - which you Pay to Buy Car. This is only one component of Ownership Cost

» Fuel Cost - Considering Real Life Average Mileage of 14 Kmpl in Petrol and 17 Kmpl in Diesel - Fuel Costs for 70,000 Kms in Petrol and 1 Lakh in Diesel will be approx :- Rs. 3.25 Lakh Rs - considering Average Petrol Price as Rs. 65 for Next 7 Yrs and Diesel at 20% less than Petrol.

» Financing Cost -  Interest Availed on Car Loan @ 10% for 5 yrs, considering 80% Finance Taken on Exshowroom - constitutes to average 25% of Exshowroom Price of Vehicle

» Year on Year Insurance - Insurance is Mandatory aspect and is advisable to protect your Hard Earned Asset from Theft, Accidental Repairs. After 1st Year Insurance - Its estimated that 6 Premiums (with 2 Claims and rest NCB) will cost around 15% Value of Original Car as purchased.

New Cars

Check Prices with Complete Features

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» Scheduled Servicing and Maintenance -  Considering (without Inflationary Factors) a car like Swift will have 40 paise per Km as Scheduled Service cost (if driven 10,000 Kms in a Year). So - considering 70,000 Kms driven - estimated Scheduled Service Cost (without taking into Account Inflation) would be Rs. 28,000 - which will be higher for Diesel Car at 65 paise per Km - considering 1 Lakh Kms.

» Wear and Tear Items - Wear and Tear Items are not included in Scheduled Maintenance - Change of Battery, Tyres, Clutch Plate Assembly, Brake Pad Replacement, AC Servicing, Shocker Replacement - even once done during Ownership will cost Rs. 35,000 for Car like Swift Petrol

» Unaccounted Maintenance -  Been a car has Electrical components and Circuits - any failure or so - will cost huge sum. Accidental Repairs along with Unaccounted Maintenance is always a possibility during ownership of car.

» Miscellaneous Head - Now Society wher you stay offer Car Parking Slots for 1 Lakh to 2 Lakh Rs in Delhi and same can go to 5 Lakh to even as high as 10 Lakh in some High rise societies in Mumbai. Add on - Parking Charges you pay every day to Park Car at Metro Stations, Office Complex is additional

 

Real Cost of Ownership

Scenario - 1 (For Moderate Usage)

If a low maintenance car like Maruti Swift is taken into consideration for 10,000 Kms a Year

Car Costing - Rs 5 Lakh and Driven 10000 Kms a Year  
   
New Car Purchase - Heads Cost to be Incurred
Swift Lxi Upfront Purchase Cost Rs. 5 Lakh in Delhi as On Road Price
Fuel Cost for 70,000 Kms @ 14 Kmpl Mileage Rs  3.25 Lakh at Rs 65 for Petrol
Finance @ 80% on Exshowroom i.e 3.6 Lakh Rs. 1.09 Lakh Interest @ 11% for 5 yrs
Insurance (2nd to 7th Year with 2 Claims n NCB) Rs. 70,000 approx
Scheduled Servicing + Wear and Tear Items Rs. 60,000 approx
Building Parking Slot - though its for Lifetime - Pro Rata for 7 yrs over 30 yrs Rs. 50,000
Other Miscellaneous Head - Parking @ 500 pm Rs. 30,000
Less  
Resale Value at End of 7th Year Rs. 1.5 Lakh approx
Net Outflow Rs 9.9 Lakh

Note : For Salaried, There are no Income Tax Benefits and no depreciation benefits on buying a car or taking a loan on it or on maintenance expenses.

So - your Estimated Ownership cost will be Rs. 15 per Km in case of Swift Petrol - if driven @ 10,000 Kms a Year for 7 Yrs

Scenario - 2 (Owning a Car For Lesser Usage)

If you Intend to Owe a Car for Lesser Usage - say 6000 Kms a Year - to be 40,000 Kms Driven in 7 Yrs

Car Costing Rs 5 Lakh and has relatively Lesser Driving  
   
New Car Purchase - Heads Cost to be Incurred
Swift Lxi Rs. 5 Lakh in Delhi as On Road Price
Fuel Cost for 40,000 Kms @ 14 Kmpl Mileage Rs  1.85 Lakh at Rs 65 for Petrol
Finance @ 80% on Exshowroom i.e 3.6 Lakh Rs. 1.09 Lakh Interest @ 11% for 5 yrs
Insurance (2nd to 7th Year with 2 Claims n NCB) Rs. 70,000 approx
Scheduled Servicing + Wear and Tear Items Rs. 50,000 approx
Building Parking Slot - though its for Lifetime - Pro Rata for 7 yrs over 30 yrs Rs. 50,000
Other Miscellaneous Head - Parking @ 500 pm Rs. 30,000
Less  
Resale Value at End of 7th Year Rs. 1.8 Lakh approx
Net Outflow Rs 8.1 Lakh

Running Cost suddenly turns out to be even more @ more than Rs 20 per Km

Cost will further mount - if you drive lesser even - say 4000 Kms a year and your ownership cost at end of 7th Year or 30,000 Kms will be more than Rs. 25 per Km. Not to deter Car Buying - But Buy Car - if there's genuine requirement in family - owning 3rd to 4th Car - for sake of ownership without need is not really a good idea. Its your Hard Earned Money - spend it Judiciously !! 

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Sunday, 25 June 2017