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Old 21st August 2008, 13:44   #1
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Default Do I trade in the Wagon R for a MJD

My Story:
I currently drive a Wagon R Vxi Oct-2004 model.
Its done about 34,000 kms and is in good condition.
No issues whatsoever.
Have drivven to Chennai twice in the past two years.
The car returns decent milage of about 13 kmpl.
Carwale.com estimate on my car is 2.5 lakhs.

My Problem:
I fell in love with the white Palio MJD.

Details:
New Palio MJD:
OTR 5 Lakhs.
If I trade in my current car, need a loan for 2.5 Lakhs.

Fuel savings:
Wagon R cost per km: 4.50 [Rs 56/ 13 kmpl]
Palio cost per km: 2.25 [Rs 36 / 16 kmpl]
From my wagon R odo I infer that I drive about 900 kms a month.
Monthly savings: 4050 [900 kms * 4.5] - 2025 [900 kms * 2.25]= Rs 2025

The 4 year plan.
EMI @ 12.5% for 4 years is 6645.
Effective EMI= 6645 - 2025 = 4620.

After 4 years:
My Wagon R would be worth about 1.1 Lakhs.
The palio would be worth about 2.5 Lakhs.
I would have paid 221760 as my EMI's.
Price difference in resale values is 1.4 lakhs.
Hence cost of the new car is 140000 spread over 4 years.
or about 3k a month.

New car gets me:
+ Warranty.
+ free services.
+ no tires next year for the Wagon.
+ deisel price advantage.
+ much better suspension.
- service every 5k instead of the current 10k
- TASS instead of MASS
- love the versatile seats of the Wagon
- dated interiors of the Palio

The indica versa with its new dashboard also appeals to me.

But this is not a Indica v/s Palio thread.
This is a financial question.
Does it make $$ sense to trade in my car for a new car.

Mods: can you please correct the spelling in the title.

Last edited by bblost : 21st August 2008 at 13:54.
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Old 21st August 2008, 14:06   #2
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bblost you seem to be quite an old member in this forum hence i assume that you know most of things about palio and fiat and their A.S.S stories etc. So comming to the point, go for the palio if you like the peppy MJD and for the build quality and the diesel factor. interiors are defenitely dated but you get a more safer car, with rugged build and a neat engine.
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Old 21st August 2008, 14:08   #3
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You have justified yourself enough to make the change. Go ahead.

Quote:
Originally Posted by bblost View Post
The indica versa with its new dashboard also appeals to me.
Now which one is the real 'copy'? Indica Versa or Vista ?

Last edited by esteem_lover : 21st August 2008 at 14:09.
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Old 21st August 2008, 14:12   #4
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I would like to lay strong emphasis that my question is essentially about the $$ point.

Am I missing out any important criteria in my calculations.
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Old 21st August 2008, 14:18   #5
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Good analysis.

$$ wise, it all kinds makes sense..

And if you consider the emotional side of things...there is no thinking necessary before going for the change

Do keep us posted with updates on this one.
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Old 21st August 2008, 14:21   #6
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Ahhhhh .. Lovely estimations.
I would say go for MJD
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Old 21st August 2008, 14:25   #7
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You miss the sheds that masquerade for Tata service centers. That was the ONLY thing which convinced me last minute against a Palio.
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Old 21st August 2008, 14:34   #8
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Sounds good. I have the same plans to go in for Palio MJD.
Your calculations seem a bit optimistic.

My estimates would be something like below, but I could be wrong :-)

Details:
New Palio MJD:
OTR 5.6 Lakhs.
If I trade in my current car, need a loan for 3.1 Lakhs.

Fuel savings:
Wagon R cost per km: 4.50 [Rs 56/ 13 kmpl]
Palio cost per km: 2.77 [Rs 36 / 13 kmpl]
From my wagon R odo I infer that I drive about 900 kms a month.
Monthly savings: 4050 [900 kms * 4.5] - 2493 [900 kms * 2.77]= Rs 1557

The 4 year plan.
EMI @ 12.5% for 4 years is 6645. (you need to rework this)
Effective EMI= 6645 - 1557 = 5088.

After 4 years: (you may need to rework this)
My Wagon R would be worth about 1.1 Lakhs.
The palio would be worth about 2.5 Lakhs.
I would have paid 221760 as my EMI's.
Price difference in resale values is 1.4 lakhs.
Hence cost of the new car is 140000 spread over 4 years.
or about 3k a month.
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Old 21st August 2008, 14:43   #9
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Your calculations makes sense and I do hope you have already made up your mind for MJD. So why wait for 2nd thoughts, just go there and trade in with your wagon R. But check the interest rates. It should be around 16% by now.
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Old 21st August 2008, 14:48   #10
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Very good analysis. Just one point. You have considered the fuel cost, but what about maintenance and cost of spares. I would recommend you to go for the trade if these two are comparable. If not, you need to capture that cost in the savings and then take a call.
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Old 21st August 2008, 14:50   #11
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bblost, have you considered:

1. the total amount you spend on your Wagon R each month currently
(include EMI, fuel, maintenance etc.)

versus

2. the total amount you would spend on the new car each month?
(include downpayment appropriately)

Do you want to spend ~8K a month (per your calculations) when you drive 900 km a month on an average?

My answer is only on monetary terms. It is the same whichever car you like.

Edit: Go for a new car only if you get a tax benefit. In simpler terms, only if you gain financially one way or the other.

Last edited by hrag : 21st August 2008 at 14:57.
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Old 21st August 2008, 14:59   #12
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Quite an impressive stats that you have put in there. Just one point that is missing in the stats, your current service costs might be less considering its a Maruti and the spares come cheap. You may face a higher outflow here since its a Palio and also a MJD. I dont know what are the exact spares and service costs but owning a diesel car earlier i can see there is an uplift in the service and spares cost for diesel.

Regards
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Old 21st August 2008, 15:11   #13
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I spend only on fuel every month for the Wagon R.
The EMI for the personal loan taken to purchase it second hand ends in October.
Thats about 10.5k a month.

Based on my runing, I need a full service only once a year and the last bill was 2000.

No other costs whatsoever on this car.
Its been a great drive and I have absolutely no complaints either with the car or the service department.

Why I started on this process is because of an evil person who uploaded the pics of his White Palio MJD and made me get into this.

Like most people I hate spending money.
But when I buy something I like to buy the best even if its a litle more than what I can afford. Because end of the day its quality that alone matters.
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Old 21st August 2008, 15:33   #14
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So after October, your monthly expense will be ~5K (including increasing maintenance taken monthly) if you keep the Wagon R.

If you go in for the Palio, you will spend ~8K a month.

Pure monetary terms - new car doesn't make sense. You will end up driving more since it is new and it is a diesel.
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Old 21st August 2008, 15:54   #15
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In your analysis you have underestimated the price of diesel. The cheapest variant today sells for Rs.38.25 per liter in this city. So that will jack up your spend calculations a little more. Approx by Rs. 135 per month. So thats not much actually but still just for the sake of factual correctness I thought I will point this out.

Personally if you ask me I will say its very difficult to justify your urge to buy a new car when your current one is running so nice and fine. Nonetheless buying a new car is a lot more about passion and likings. Everything is justified if you really like something.

Though, in this case, I would say you should keep in mind the fact that maintaining a Fiat can be a little difficult in terms of difficulty in procurement of parts. So check the peace-of-mind aspect and factor that in as well. Today in the rush of blood you may buy the car but after a year when the gloss wears off you may have to rue it considering that you are habituated to Maruti service which may very well look like out of this world in comparison.
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