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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 -
- Wear and Tear Items: Some Parts like Clutch & Pressure Plate, Battery, Fuel Filter, Timing Belt, Radiator Components etc cost higher in Diesel Cars Cars
- 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. 5 Lakh - considering Average Petrol Price as Rs. 96 for Next 7 Yrs and Diesel at Rs 85 per Litre.
- Financing Cost - Interest Availed on Car Loan @ 9% for 5 yrs, considering 80% Finance Taken on Exshowroom - constitutes to average 25% of Exshowroom Price of Vehicle
- Annual Insurance Renewal - 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.
- 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. Toll Fee
Real Cost of Ownership - Updated in 2023
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 - Swift Vxi as example and Driven 10000 Kms a Year | |
| New Car Purchase - Heads | Cost to be Incurred |
| Swift Vxi Upfront Purchase Cost | Rs. 7.7 Lakh in Delhi as On Road Price |
| Fuel Cost for 70,000 Kms @ 14 Kmpl Mileage (@ 96 rs per Litre in Delhi, considering 2018 rates) | Rs 4.8 Lakh at Rs 80 for Petrol |
| Finance @ 70% on Exshowroom i.e 5 Lakh | Rs. 1.2 Lakh Interest @ 9% for 5 yrs |
| Insurance (2nd to 7th Year with 2 Claims n NCB) | Rs. 1 Lakh approx |
| Scheduled Servicing + Wear and Tear Items | Rs. 70,000 approx |
| Building Parking Slot - though its for Lifetime - Pro Rata for 7 yrs over 30 yrs | Rs. 50,000 |
| Car Wash and clean | Rs. 25.000 (@ 300 rs per month) |
| Other Miscellaneous Head - Parking @ Metro, Mall, Office | Rs. 84000 (@ 1000 rs per Month) |
| Less | |
| Resale Value at End of 7th Year | Rs. 3.5 Lakh approx |
| Net Outflow | Rs 13.5 Lakh approx |
Running Cost turns out to be almost close to Rs 20 per Km for Owning Maruti Swift for 7 yrs
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 SUV Car like Hyundai Creta)
If you Intend to Owe a SUV Car like Hyundai Creta and intend to drive even more
| Owning Hyundai Creta Cost | Cost to be Incurred |
| Hyundai Creta Sx (exshowroom - 14.58 Lakh) | Rs. 16.63 Lakh in Delhi as On Road Price |
| Fuel Cost for 1 Lakh Kms @ 12 Kmpl Mileage | Rs 8 Lakh approx |
| Finance @ 70% on Exshowroom i.e 10 Lakh | Rs. 2.4 Lakh Interest @ 9% for 5 yrs |
| Insurance (2nd to 7th Year with 2 Claims n NCB) | Rs. 2 Lakh approx |
| Scheduled Servicing + Wear and Tear Items | Rs. 90,000 approx |
| Building Parking Slot - though its for Lifetime - Pro Rata for 7 yrs over 30 yrs | Rs. 50,000 |
| Car Wash & Clean | Rs. 25,000 (@ 300 rs per month) |
| Other Miscellaneous Head - Parking | Rs. 60,000 (say goes slight lesser) |
| Less | |
| Resale Value at End of 7th Year | Rs. 6.25 Lakh approx |
| Net Outflow | Rs 23 Lakh |
Running Cost suddenly turns out to be even more @ Rs 23 per Km for owning Hyundai Creta
Cost will further mount - if you drive lesser even - say 5000 Kms to 7000 Kms a year and your ownership cost at end of 7th Year or 30,000 Kms will be almost Rs. 30 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 !!
Comments 8
Very well written and very informative article. Kudos!
Your calculations are not accurate
What correction should be made?
It's better to purchase Electric Vehicle then only you will be in Profit. If you are frequently using car, daily 70 km a day.
Written very well, thank you for sharing your experience.
Very informative
Nice to read such articles with India as a subject.
Car cleaning cost need be included. In Mumbai @ Rs 400/ - Per month, it is nearly Rs 5,000 a year and Rs 35,000 for seven years.
The cost of Tolls and Environment clearance certificate cost is also there.
Very well compiled article. Well done.