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Old 18th December 2006, 13:57   #1
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Default Owning a Car can become prohibitively costlier

I profess a time not very distant from now, when the total cost of ownership (TCO) of car is going to increase dramatically. There are enough pointers towards that. Just to mention a few .....

1. Pollution

The contribution from vehicular traffic alone has increased from 64 per
cent to 72 per cent in the last decade. There is growing international pressure and public awareness which will force the government to crack down on traffic pollutants. Pollution tax is imminent.

2. Space

Traffic jams even at the current level of vehicle desity is unmanagebile. What if the vehicle grows @ 25% p.a. Space will come at a premium.

3. Infrastructure

There are more challenges in infrastructure improvement, than what meets the eye: Investment sanction, recovery model, land acquisition, political will, rehab of displaced people, maintenance, corruption, legal issues, inefficient contractors and distruption to traffic. All these will add to cost of travel.

4. Fuel cost

100$ a barrel scenario is not distant from now if alternate fuels are not found for commercial vehicle use.

5. Inflation

Day after day the purchasing power of rupee is going down. You need to shell atleast 10% more in the coming year over this year.

6. Safety

Just a few days back one of our BHP friends had mentioned that ABS might become mandatory. Strigent safety regulation will increase the cost.

7. Risk

Traffic density will obviously increase risk. Hence insurance costs are going go high.

8. Existing rules in other countries, an indicator?
  • Certificate of Entitlement at a cost equivalent to cost of vehicle to control long-term vehicle population growth.
  • Higher registration fees upto double the cost of vehicle.
  • Electronic Road Pricing, pay-per-use principle extended to choke-points on major roads in order to alleviate congestion, not mention the one time cost of in-vehicle units.
  • Road taxes renewable on a six-monthly basis, exponentially increasing with age of vehicle
Your views....?
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Old 18th December 2006, 14:25   #2
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Sure, cost of ownsership of anything increases regularly. The question now points towards the rate of increase of ownership costs, and the health of the economy - directly as it pertains to salaries.
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Old 18th December 2006, 15:20   #3
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Not to mention the increasing insurance premiums....Above 1500 cc the third party component is increasing by 254%!!!!!!!
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Old 18th December 2006, 15:41   #4
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Well, I read an article somewhere on why the TATA Rs 1 Lac car is not good for India and had some good comparisons with the American Car makers, etc.

Not sure, if i read in any news-paper or online.. But it was a very thoughtful article full of good statistics on cost of oil-imports, pollution, parking, fuel-economy, etc.

It appears most govts are willing to lower the costs of vehicles running on a renewable energy sources
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Old 18th December 2006, 15:53   #5
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Just for records:

Add to the list - the increasing parking costs.
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Old 18th December 2006, 16:29   #6
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First provide proper, painless public mass transport systems, then lets talk about increasing/ discouraging personal transport
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Old 18th December 2006, 16:30   #7
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ITs just a matter of time for the rules abroad to match rules in India. I can see congetsion charge imminent in cities in India. New safety mechanisms might come in soon. So people might not be able buy cheap cars. Speed tickets will become automated. i think in another 5 years, all these miscallaneous charges will make it tighter to run vehichles on road. basically i don't see a point in running cars in the city. since we don't have clean, fast and reliable mass transport system, we still keep and run cars in the city. if it gets unbearable, get a driver and get over the problems.
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Old 18th December 2006, 16:51   #8
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Quote:
Originally Posted by ajmat View Post
First provide proper, painless public mass transport systems, then lets talk about increasing/ discouraging personal transport
I am with you on this point , We need faster trains when I say that I dont mean a TGV but a train that can comfartably cruise around 160-200Kmph . For this I know lot of money has to be pumped in to reinforce exisiting railway lines.
And as far as road traffic is considered we need a well planned well thought off , well laid out plan for controlling road traffic to avoid traffic congestion .
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Old 18th December 2006, 16:59   #9
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It could happen. But I doubt it will.

1. Pollution
Better emission standards will address this or sufficiently keep this in check.

2. Space
Only the prime urban areas are crowded. India is a vast country, still plenty of space for expansion.
Space in prime urban could be addressed by:
a) Better infrastructure
b) Change in timings (offices start early to beat the traffic)

3. Infrastructure
Golden quadrilateral is just completed. There is no reason why more such projects won't be taken up. If the Govenment has the will, any challenge can be overcome.

4. Fuel cost
Oil prices, adjusted to inflation has remained more or less same for past 50 years ( Gasoline prices in inflation-adjusted (2005) Cents, 1950 to 2006 ). Of course with the non-renewable energy depleting, oil prices would surely increase. But there are alternate resources (electricity, fuel cell, hydrogen, etc), which might work out cheaper.

5. Inflation
Along with inflation, people income has also gone up.

6. Safety
Very marginal in terms of cost (remember, cars didn't have seat-belts some years back - now its standard). Economy of scale will reduce the price of the components required for safety.

7. Risk
Todays are cars are way safer than previous generation cars. With Free Pricing insurance due to come up next year ( Driving style to govern car insurance ), safe drivers/cars will be rewarded with less premiums.

8. Existing rules in other countries, an indicator?
Extreme measure might work in an autocratic country like Singapore or China. I doubt whether it will in our country. There might marginal increase in road-tax, toll, etc and not more.

Definitely the TOC will increase. But along with it, people's income will also increase on a higher scale. Owning a car is easier now than any time in the history of our country. It will be even easier in future.

Last edited by msdivy : 18th December 2006 at 17:02.
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Old 19th December 2006, 18:06   #10
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Increasing the cost of ownership of private vehicles is a strategy to promote use of public transport, for e.g countries like Singapore where space comes with a premium. I do not see that happening that easily in India as there is hardly any good public transportation and the middle class will continue to own private vehicle in order to enhance the life style and confort. IMHO the cost of ownership will continue to be made more for luxury cars and the 'cars for middle class' will continue to enjoy the exemptions in near future.
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Old 21st December 2006, 01:08   #11
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things in India am not sure how fats it will fair up, but back here in dxb there is nospace to drive and we are always stuck in traffic..and now soon comes the METRO, and govt has plans to put restriction to private cars and encourage public mass transport systems..
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Old 21st December 2006, 03:02   #12
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Quote:
Originally Posted by ajmat View Post
First provide proper, painless public mass transport systems, then lets talk about increasing/ discouraging personal transport
Well Said !

I completely agree with that. We dont have proper public transport facilities in most of the places around....
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Old 21st December 2006, 05:35   #13
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But I've always felt the need for congestion tax in Indian cities atleast for some trucks like Endeavour/Innova .
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Old 21st December 2006, 11:28   #14
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Quote:
Originally Posted by pathfinder View Post
Increasing the cost of ownership of private vehicles is a strategy to promote use of public transport, for e.g countries like Singapore where space comes with a premium. I do not see that happening that easily in India as there is hardly any good public transportation and the middle class will continue to own private vehicle in order to enhance the life style and confort. IMHO the cost of ownership will continue to be made more for luxury cars and the 'cars for middle class' will continue to enjoy the exemptions in near future.

is there a public transport system ??? i've never seen it. i only see cattle transport systems in our cities. it is such a shame how we have continously backslid in this department. At least in chennai, in the 80s, there was an efficiently managed PTS which we have used without a thought. coming to the topic, i see space as a premium as mentioned earlier, to be the most important thing that the government has got to handle. parking space will just not be available. this is already a crisis in many parts of the cities.
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Old 21st December 2006, 15:13   #15
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Quote:
is there a public transport system ??? i've never seen it.
I definitely do agree with this statement. As far as improving public transport system is concerned, must applaud the KSRTC (Karnataka) for launching the Volvo series of buses. Quite a few of my friends have stopped getting their private vehicles to office, as its more convenient to commute via these buses. However the costs involved arent really exciting, i must add. Probably when more n more people start using these over their vehicles, we wud see a drop in the prices being charged.

On the other hand the initiative to start a Metro rail system seems to have hit a roadblock as is usually the case.

In Hyderabad the govt had launched the MMTS (Multi Modal Transport System) which has really good coaches and stuff , and also linked it with the local buses to provide passengers with access to the stations. Dint get that good a response i must add.
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