ARTICLE: YOUR 5 year old car : Keep, Upgrade or Swap?

[GTO]

Originally Posted by sbasak

Most insurers will refuse payout if it is proven that key was left in the car when it was stolen. Some even ask you to produce the keys when you report it stolen!

You know what would be worse? To get your car back after being abused and with most parts missing.

Originally Posted by Rahulk76

"Which car/muv/suv has a engine or lets say a whole package to be giving a relatively troublefree service spanning through 6-7 years and that too in Indian conditions - An american car, A german car, a jap car, a korean car or a Indian car. "(petrol or diesel)

Generally, Japanese cars will give you the longest reliable service. Germans will too, but the modern species will break your bank with their electronic component replacements.

Originally Posted by blue_pulsar

Really interesting. Long time back, I read one of your posts and was inspired: I always thought 'splurge' means spending around 35-40%(I have seen people who do it). But considering your definition of splurge, I have exceeded the limit by a fair amount .

Lets just say that I am fortunate enough to stick within the 10% rule and still buy the cars I want. This was part of my post and stands for my purchase decisions:

I usually don't consider ride comfort as an absolute criteria for buying a car....its usually the head over the heart. No surprise then that three of my four current cars (C220, OHC Vtec and Classic 4x4) aren't exactly the best to be driven around in. But boy, are they satisfying to drive.

Neither do I calculate VFM or fuel-efficiency. Cars are one area of my life where I splurge. However, safety has become an obsession in recent times. Henceforth, any cars that I buy must rank highly on the safety factor.

But no, DON'T ever go anywhere near the 35 - 40% figure. Fuel, insurance etc. will account for another 5 - 10%.....translated, you are spending half of what you make on your car. That's a pretty stupid situation to be in.

[shankar.balan]

The way this thread is developing it is great to read.
Just a few thoughts:
1.Consumerism is rampant in India today like it was in the US/ Western Europe of the Late '70's,'80's and '90's.
2.Money is more freely available as loans from banks/ credit cards, on production of a good salary certificate or a decent track record. This is a huge deal - because it 1970's-1980's and even 1990's India, this was not the case.
3.Urban and Rural consumer spending patterns have gone up because they are far more aware than they ever were before. (Penetration of TV/ Media/ Movies).
4.Style quotient is of very great importance - right from clothes, accessories like watches, sunglasses, mobile phones, ipods etc etc. So why not even the car?
5.However, having said all this, most urban working Indians are also falling into the huge debt trap that lies in wait for the unwary - succumbing to such temptation certainly has its downside.

[theEnd]

I think this thread highlights very well how every purchase (not only cars) have a practical aspect as well as an emotional aspect. My previous post was merely to further the emotional side slightly, as I felt it needed to be brought up.

The point about classic car clubs or sports car clubs is very relevant. I remember wandering into one such club in London because I was drawn in by the Shelby Cobra sitting by the front entrance. Inside they had a wide range of cars ranging from modern beauties (lots of shiny Aston Martins, brand new 911 Turbos) as well as classics, including a Dino. The pricing (I dont remember it offhand) was very reasonable (from a Londoner's point of view) and it seemed like the perfect outlet for that emotional side of the car-buying decision.

[breezydrive]

Great Thread!

Inspired by this, i tried to work out how much the second car /upgrade will cost me over a period of 5 years.

See attachment


Certain assumptions were made:

1. OTR considered on tentative basis
2. Accessories cost varies as per individual's taste & vitamin M
3. Fuel consumption is based upon general perception & T-bhp's reviews
4. Average fuel cost for next 5 years depends upon various factors.
5. Service interval considered as 7000 km ( my taste)
6. Misc. repairs may involve suspension work, minor body repairs etc. but does not include accidental/ major repairs
7.Resale value - highly subjective ( Next five years shall witness plethora of cars being launched among all segments.These cars would definitely boast of better features/ specs. than the current cropof cars. Hence faster rate of dep. for current lot. Brand value ( Hondas etc.) as always shall have major bearing on resale value )


Now, 22 lacs savings seems worth ( at least for me) & may be i should invest in another property, keep the old car for daily running & hire a cab/ SUV/ Limo ocassionaly (as the occasion demands)

[GTO]

Good first attempt, breezydrive. But there are some errors in your calculations:

1. You have not considered the opportunity cost i.e. the money spent on a new car that could be invested / saved elsewhere.

2. Your maintenance + repair costs are overtly pessimistic! A Civic won't cost you 1.5 lakhs in service and repairs over 5 years. The number would be far lesser, of course accidents not included.

3. Your resale values are equally pessimistic. A 5 year old Civic will fetch you way more than only 3.5 lakhs.

[karanraheja]

Originally Posted by GTO

Good first attempt, breezydrive. But there are some errors in your calculations:

1. You have not considered the opportunity cost i.e. the money spent on a new car that could be invested / saved elsewhere.

2. Your maintenance + repair costs are overtly pessimistic! A Civic won't cost you 1.5 lakhs in service and repairs over 5 years. The number would be far lesser, of course accidents not included.

3. Your resale values are equally pessimistic. A 5 year old Civic will fetch you way more than only 3.5 lakhs.

You have mentioned resale of NHC at 2.34 l after 5 years. 4 lacs seems more realistic IMO. I think resale value of sedans could be increased a bit. Anyways a good attempt!!

[breezydrive]

Sorry guys!

Resale value has been corrected now, actually i was working with a tenure of 8 years. Corrected some cells & forgot about some.

Re attached

[yaser_cyclist]

Hi All,

Hats off to GTO for such an awesome thread, definetly makes you think and very valid points. Just went through all the 10 pages and it reminded me of a line I read somewhere. It goes like this

"Success is getting what you want. Happiness is wanting what you get".

To each his own and you will always find people who want to be successful in life and there are an equal number who want to be happy. For sure some of us waste a lot of our life searching for that success/happiness in the wrong place/thing. Be it a car, villa, clothes etc. The list can be endless. I believe it all depends on the person, what he/she is looking for in life.

One of the managers in my Office just got a brand new Optra which sure is a lovely car. For him it might be a status thing but what good does it do to a person if you can't behave properly with your colleagues, abuse them and show no respect to anyone. The goodwill in his balance sheet is in the negative. Also that status and all will last only as long as you are on the road. What car you have parked in the parking lot will not make any effect inside your house/office. Hmmmmm maybe for the youngsters it might get some chick heads turn which again would just be a temporary thing last not more than a few minutes/hours/days/months.

Definetly the lifestyle have changed in India too in the last decade and now people have more things and more NEW things. One of my neighbour who is into his 70s is still more than happy driving around his age old padmini and I do have some friends who are already bored of their car which is just a couple of years old.

Somehow I feel that the same is happening with the relations in life too. In the good old days, you only bought a car once and also married just once in a lifetime. You never bothered as to how the other persons wife looked like etc but now, you can easily get bored of a car that you bought NEW in just like 2 years and are already wondering how would it be to own/drive that new model.

It asks for a lot of patience and dedication to get involved in a long-term relationship and its very very easy to succumb to ones desires. You own a car for 5+yrs, you have got into a deep relationship with her. By now you would have got to know all it has under the hood and when the minor problems start coming in, get them fixed right there and in the next couple of years you know what to do if something happens and most of the times, you will find yourself fixing all those minor things yourself. A little dent, a slight rattle shouldn't bother much. You would love her for what she is and never COMPARE her with any other thing.

The same doesn't stands true for a new car. Also, a NEW car isn't suppose to give you any problem and if it does, you get frustrated.

Once a colleague of mine bought his FIRST NEW bike. It was a black Unicorn. A few months into its life, it fell while parking and there was this little scratch on its little bikini visor. Something that could have been ignored or just a little touchup or rubbinh polish would have taken care of it. But no he didn't want to see even a single scratch on it. He took it to the showroom and asked for a replacement. They denied saying that it can't be replaced for such a minor thing. Any guesses what he did? A few days later he himself smashed the entire headlight thing with hammer or whatever and then claimed insurance and got it replaced.

First thing, that is a big waste of resources and sure added to his frustration, BP etc and the biggest of all the relationship doesn't has that bond. Its his thrid year with the bike now and he already wants to upgrade.

I think apart from the monetary part we also should give a serious thought to our relationships and when I say that here in TBHP, I am referring to the one we share with our machines.

Once again - To Each His Own.

[Mpower]

Originally Posted by GTO

3 of the 5 people I respect the most own an Ikon, a 9 year old Accord (in the states) and a 7 year old Accent. You'd agree that these cars are hardly special. But I can assure you, the owners are.

Problem is that lot of people are not special in any way and so, look for gaadi, bangla to boost their image.

[Max]

Originally Posted by sridharps

GTO, even I have been surprised to the extent to which cars have come to be viewed to be as a status symbol in our society. Earlier, people held onto their cars for a much longer timeframe. Such is not the case these days.

I really don't see any reason why so many of you are not ready to except that owning a big latest expensive car is status symbol in India. I mean come out from those 5+ corer (milliong dollar+) homes in cuff parade area where everybody drives 15+ lakh car, if you live in mumbai suburbs and other cities (99% india lives out of mumbai eh!) owning a big and expensive car DO represent an status symbol in India.

I live in mumbai suburbs where average 1 bhk cost Rs.25 lakhs, so owing car worth rs.13 lakhs is still very big thing for majority of people. I know its money not spent well but if you want status (not respect) you should own latest and expensive car. Some people have different kind of livestyle, they want latest watches, expensive sunglasses and expensive cloths, mostly people in their 20s definitely want it. Its all about your lifestyle and weather you can afford it.

In no way I am suggesting people to sale their homes and by BMW but i think one should not sit on money like snake but spend it wisely for his comfort.

I know, i will keep my car till it breaks down if i don't have extra money.

[GTO]

I really don't see any reason why so many of you are not ready to except that owning a big latest expensive car is status symbol in India.

Max, we do accept it and have already stated, to each his own. What we were questioning was the premise of its existence and doubting its importance.

[asr245]

Originally Posted by teknophobia

What a "safe" amount is depends solely on your lifestyle and your desire to save. I am paying about 15% of my net income as EMI for my car and I find it risky, I have colleagues who are paying 25% plus and don't think much about it.

net income is carry home after tax? or before tax?

[Path_Finder]

Asr245, proof of the pudding is in its eating and the proof of GTO theory is in your signature. Get the best out of your Wagon R!

Net is after taxes.

[Max]

btw, my brother is driving second hand 1999 zen and still driving it. we can easily take out 5 more years out of it and he plans to do so. I fully support his decision . Ofcourse, he is married and just got 2nd baby (boy).

[Hackett]

Originally Posted by breezydrive

Sorry guys!

Resale value has been corrected now, actually i was working with a tenure of 8 years. Corrected some cells & forgot about some.

Re attached

Good attempt.

Just to adding another dimension to it. If same number of kilometers are traveled by a/c cab. Not getting into the debate of cost of cab driver verses owned car benefits in that aspect.

and if Rs 13/- is cost of per km travel of an a/c cab , the cost of ownership becomes more interesting.