Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 10th April 2007, 10:11   #136
BHPian
 
gkrishn's Avatar
 
Join Date: Aug 2004
Location: Bangalore
Posts: 584
Thanked: 36 Times
Default

Quote:
Originally Posted by v1p3r View Post
My point is, when IT pros have enough money to treat the taxman as a mosquito-like annoyance, they still drive crappy cars, for the most part. Samurai and Ajmat are two instant exceptions to the rule, though I'm sure the taxman is more than just a mosquito to them!
Most of the points have already been listed. I will just add one more here.

A typical business man does all his spending and then pays tax. For example he could potentially show his car expenses as business running cost. People who are involved in running their own business can detail more on this.

A salaried class, pays all the tax up front and gets the rest as income. On this income they do all their expenditure.

Also 90% of the people who buy apartment in bangalore are from IT. And its a known fact that how high these apartment prices are. One of my friend is paying 28k per month as EMI. And this was when interest rate was at 8-9%. God knows how much now. How much do you think he will left with, even at the beginning of every month??? He is still driving around in a 2nd hand 97 esteem.
gkrishn is offline   Reply With Quote
Old 10th April 2007, 10:18   #137
Senior - BHPian
 
Godfather's Avatar
 
Join Date: Dec 2005
Location: Bangalore / Atlanta
Posts: 1,387
Thanked: 65 Times
Default

Quote:
Originally Posted by gkrishn View Post
A typical business man does all his spending and then pays tax. For example he could potentially show his car expenses as business running cost. People who are involved in running their own business can detail more on this.
Yes.. A business man can show the car as an office expense.. it can be showed as car given to manager / director etc etc.. hence comes under legitimate business expenditure..
Also we can claim fuel expenses of these luxury cars for tax purposes.. so the mileage really does not matter here

Godfather
Godfather is offline   Reply With Quote
Old 10th April 2007, 10:18   #138
BHPian
 
goldie_malhotra's Avatar
 
Join Date: Nov 2005
Location: New Delhi
Posts: 757
Thanked: 10 Times
Default

A birds eye view of parking lot at our office

- Laura - 1
- Octy - 2
- Civic - 2
- NHC - 15 (incl 3 Vtecs) (an all time favorite here)
- OHC - 2
- Fusion - 2
- Optra - 1
- Fiesta - 3
- Ikon - 5

The rest are an assortment of Santros, Wagon-Rs (also big time favorites) and Swifts.

The cream of the crop are undoubtedly the Black Terracan and Olive Beemer 740i owned by the VP

Then again, this is Delhi - where people tend to flaunt their taste in everything, including cars.
goldie_malhotra is offline   Reply With Quote
Old 10th April 2007, 10:23   #139
Team-BHP Support
 
benbsb29's Avatar
 
Join Date: Nov 2006
Location: Brisbane
Posts: 8,025
Thanked: 3,483 Times
Default

To get an idea of how the big shots in my company spend on their cars, am providing a list of some of the cars i see in the parking lot here.

Tata Safari (around 2-3)
Toyota innova (4-5)
Ford Fiesta (4-5)
Chevy Optra (2)
Chevy Aveo (1, that too in Orange!!)
Balenos (2)
Ford Ikon 1.6 (3)
Ford Ikon Flair (5)
Mahindra Scorpio (6-7)
Estilo (just ONE, thankfully)
Swifts (8 or so)
Honda CRV (1)
Accent (3)
Verna (NONE so far)
M800 (1)
OHC (none)
NHC (3-4)

Guess some more which however, i am not able to recollect.
Please note that my company offers a lease purchase option to employees who have been with them for over 5 years... which enables them to look at higher end cars. Just goes to show that despite all these, they dont really look at cars beyond 12 lakhs.
benbsb29 is offline   Reply With Quote
Old 10th April 2007, 10:29   #140
BHPian
 
gkrishn's Avatar
 
Join Date: Aug 2004
Location: Bangalore
Posts: 584
Thanked: 36 Times
Default

Quote:
Originally Posted by benbsb29 View Post
Just goes to show that despite all these, they dont really look at cars beyond 12 lakhs.
When i was researching for my car purchase... some where in a US website i read, that for a salaried person, the price of the car should not be more than 50% of current annual income.
In a high growth market like india, you can extend this by another 10% or so.
gkrishn is offline   Reply With Quote
Old 10th April 2007, 10:32   #141
BHPian
 
Join Date: Mar 2005
Location: Mumbai
Posts: 538
Thanked: 59 Times
Default

Quote:
Originally Posted by v1p3r View Post
My point is, when IT pros have enough money to treat the taxman as a mosquito-like annoyance, they still drive crappy cars, for the most part. Samurai and Ajmat are two instant exceptions to the rule, though I'm sure the taxman is more than just a mosquito to them!
i doubt if those glory days exist anymore. the boom is long over and the IT employment place has found its level. For entry to mid-level jobs, the salaries are not that mind-blowing as they used to be during the boom. Plus, if these IT people are based in Mumbai, they might also have the added headache of house purchase, which has become ridiculous these days.
hell_rider is offline   Reply With Quote
Old 10th April 2007, 10:35   #142
Team-BHP Support
 
benbsb29's Avatar
 
Join Date: Nov 2006
Location: Brisbane
Posts: 8,025
Thanked: 3,483 Times
Default

Quote:
Originally Posted by hell_rider View Post
Plus, if these IT people are based in Mumbai, they might also have the added headache of house purchase, which has become ridiculous these days.
Why would you single that to just Mumbai?
Its the same everywhere with the nuclear family system which is prevalent, meaning you need to get yourself a house whereever you are based, be it Bangalore, Hyd, Pune..... or anywhere.
benbsb29 is offline   Reply With Quote
Old 10th April 2007, 10:39   #143
Senior - BHPian
 
Godfather's Avatar
 
Join Date: Dec 2005
Location: Bangalore / Atlanta
Posts: 1,387
Thanked: 65 Times
Default

Also forgot to mention one more point..
The company i work for Oracle has 4 locations in Bangalore alone.. and they also provide 24/7 cab pickup and drop facility..
There are approximately 300 cabs plying bangalore roads for Oracle alone .. another reason why an IT employee does not prefer his own luxury wheels..

Godfather
Godfather is offline   Reply With Quote
Old 10th April 2007, 11:05   #144
BHPian
 
w 12's Avatar
 
Join Date: Apr 2006
Location: bangalore
Posts: 402
Thanked: 26 Times
Default

Quote:
Originally Posted by gkrishn View Post
A typical business man does all his spending and then pays tax. For example he could potentially show his car expenses as business running cost. People who are involved in running their own business can detail more on this.

A salaried class, pays all the tax up front and gets the rest as income. On this income they do all their expenditure.
But, most of the IT companies give their employees the facility of company leased cars..The car is bought in companys name..used by the employee for 3 - 5 years and then the employee can buy the same car from the company at the depreciated value..typically at 30- 40% of the original vaue of the car..The EMIs for the car is tax free. maintenance is by the company..petrol is also paid for..Not a bad deal at all..

So a small businessman may buy 1 cars in 3 years and get this benefit,,but huge corporates get the same benefit for 100s of cars every year..( including IT companies )
w 12 is offline   Reply With Quote
Old 10th April 2007, 11:15   #145
BHPian
 
gkrishn's Avatar
 
Join Date: Aug 2004
Location: Bangalore
Posts: 584
Thanked: 36 Times
Default

Quote:
Originally Posted by w 12 View Post
But, most of the IT companies give their employees the facility of company leased cars..The car is bought in companys name..used by the employee for 3 - 5 years and then the employee can buy the same car from the company at the depreciated value..typically at 30- 40% of the original vaue of the car..The EMIs for the car is tax free. maintenance is by the company..petrol is also paid for..Not a bad deal at all..
Well I am not sure about how exactly this car leasing is implemented. There is a similar scheme in my company too. But there were some clause in that which made it not so popular. Atleast one of my manager, who could have used this leasing, went and brought the car on his own, with a loan. This was 2.5 years ago. The scheme has become more unfriendly now...

Also, a lot of these tax benefit schemes are on grey areas of taxation laws. Lot of MNCs prefer to be on safer side. Which result is less benefit for the employee...

Quote:
So a small businessman may buy 1 cars in 3 years and get this benefit,,but huge corporates get the same benefit for 100s of cars every year..( including IT companies )
Yeah, but this still benefits the corporate... not that much for the employee.
gkrishn is offline   Reply With Quote
Old 10th April 2007, 11:52   #146
BHPian
 
w 12's Avatar
 
Join Date: Apr 2006
Location: bangalore
Posts: 402
Thanked: 26 Times
Default

Quote:
Originally Posted by gkrishn View Post

1. Also, a lot of these tax benefit schemes are on grey areas of taxation laws. Lot of MNCs prefer to be on safer side. Which result is less benefit for the employee...

2. Yeah, but this still benefits the corporate... not that much for the employee.
1. IMO there is nothing grey in capitalising the expense of a car and its running expenses and offset its depreciation against profits......ofcourse the companys discretion is in granting this benefit to the employee and may be in deciding the buyback value for him later.

2. It certainly benefits the corporate..but the employee also benefits in the following ways.
a)The EMI employee pays for car is what would have been deducted as TDS otherwise..so no net outflow for the car in most of the cases
b) Has the complete use of a brand new car , of his choice
c) Insurance and maintenance is paid for by company
d) Fuel or allowance for the same is paid for by company
e) He can buy the car in his name after using it for a few years, at around 30 - 40 % of the original value
w 12 is offline   Reply With Quote
Old 10th April 2007, 12:00   #147
Senior - BHPian
 
msdivy's Avatar
 
Join Date: Aug 2006
Location: Bangalore
Posts: 1,445
Thanked: 838 Times
Default

Quote:
Originally Posted by w 12 View Post
e) He can buy the car in his name after using it for a few years, at around 30 - 40 % of the original value
Usually this scheme is extended to people who have put in 4/5 years in the same company. Employee would benefit if he stays till the end of loan term (usually 5 years). This means 8 to 10 years in the same company. This puts off employees to avail this scheme.
msdivy is online now   Reply With Quote
Old 10th April 2007, 12:01   #148
Senior - BHPian
 
spadival's Avatar
 
Join Date: Oct 2004
Location: Dayton, OH
Posts: 1,770
Thanked: 15 Times
Default

Unfortunately, some time back, for TCS employees, the choice of company leased car was limited to Indicas/Indigo . LOL.. Even then, some employees used to show off that they had a company leased junk trap.
spadival is offline   Reply With Quote
Old 10th April 2007, 12:17   #149
Senior - BHPian
 
msdivy's Avatar
 
Join Date: Aug 2006
Location: Bangalore
Posts: 1,445
Thanked: 838 Times
Default

Back to topic: IMO, pros who can afford flashy cars but still don't buy them because:
1. Conservative: They don't value flashy cars (if they can't figure out the difference between an Ikon & an Accord, why pay 12L more and go for Accord?).
2. Maintain hierarcy: Their higher ups don't won one.
3. Better Investment: instead of spending 30L on a flashy car, they can buy a decent flat, which will appreciate.

The current generation pros may not buy, I am sure the next generation will definetly go for flashy cars.

Last edited by msdivy : 10th April 2007 at 12:21.
msdivy is online now   Reply With Quote
Old 10th April 2007, 13:06   #150
Senior - BHPian
 
DCEite's Avatar
 
Join Date: Sep 2004
Location: NCR
Posts: 3,048
Thanked: 487 Times
Default

Quote:
Originally Posted by msdivy View Post
2. Maintain hierarcy: Their higher ups don't won one.
Talking about maintaining hierarchy, i think a vicious circle sets in if the top guys(VPs and so on) dont own Luxury cars. Because if they dont, the employees right below the hierarchy stay away from flashy cars (ofcourse exceptions exist) because of reasons already mentioned in previous posts, and because of them, the next in hierarchy follows the same.. and so on. So you end up having a parking lot consisting of Altos and Zens and Santros.
So the top guys should set an example. Buy Beemers and Mercs. Then only the lower grades will have some guts to buy a C/D segmenter.

Last edited by DCEite : 10th April 2007 at 13:09.
DCEite is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Things they donít teach you at an Indian driving school SDP Street Experiences 195 16th September 2016 11:26
So, why don't you buy an Automatic? GTO The Indian Car Scene 709 12th August 2016 20:32
I want to buy a Beagle in Bangalore. UPDATE: The DON has arrived! Duboy Shifting gears 38 11th April 2009 13:08
Is this article true?--don't buy petrol on 24th Jan 2008 arunkumar_rec Shifting gears 5 11th January 2008 13:24
Watch out flashy Bangalorians and others - Big brother IT is watching you ajmat The Indian Car Scene 15 24th November 2005 23:04


All times are GMT +5.5. The time now is 14:36.

Copyright ©2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks