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Old 29th August 2010, 11:20   #1
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Default Advice reqd - Is it time to change my car?

I am currently using a Honda City ZX CVT (45000 kms) which is now four and a half years old. As a professional, I am entitled to claim depreciation.
After reading GTO's Vento review I am now tempted.
Would it now make sense to sell this car and go in for a VW Vento A/T (which I understand will have an on road tag of 10.45 lacs here)? I am guessing that my present car will fetch me between 4 and 5 lacs if sold now. Intend going in for a vehicle loan for the balance. Alternatively would it be more prudent (in financial terms as well) to use the City for another 3 years and then think of changing it?
My requirements as far as a car is concerned is – comfort/space, safety, reliability – not too fastidious about getting an extra km or two per litre of petrol.

Please do let me have your opinion.

*The heading should read 'change' instead of cange.

Last edited by wilful : 29th August 2010 at 11:24.
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Old 29th August 2010, 15:55   #2
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why not city again?it is totally differant and much better car than NHC.aftar all honda is honda!
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Old 29th August 2010, 18:37   #3
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Procircuit -- you have a point. The main reason I was thinking of VW and not Honda was because this is my second Honda (the first one being a 1.3 DX). I thought of giving German engineering a look. Also I understand that the ANHC A/T is at least 50 K more expensive.
But after having read a few threads/replies on Skoda and service probs I am shaken.
Also I am beginning to think that the cost of ownership will be substantially more.
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Old 29th August 2010, 19:04   #4
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If the car is running fine, and you are happy with it, why not keep it for a few more years, and then upgrade by another segment?
IMO, the ANHC is simply not worth it, specially when you can get a much better built, more premium and comfortable (in terms of quality and features), and safer (better stability at higher speeds, better handling, etc.) car in the Vento.
The ANHC may have a better engine (only petrols, the diesel Vento would be my pick), and a lower cost of ownership but that is about it.
In India, with better competition that is trumping Honda in almost every field, Honda is not what it used to be anymore.

@Wilful: The Vento will no doubt be more expensive to maintain than the Honda. Even regular servicing will be considerable more expensive. However, the 50K that you will save, will help.
However, personally, if you are satisfied with your NHC right now, why not wait a bit and look at going a class higher to a Corolla or a Civic in a couple of years?

Edit: Or why not go the pre-worshipped way? A sparingly used Altis sound tempting?
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Old 29th August 2010, 21:25   #5
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lamborghini - your first point has a lot going for it - i.e. keeping it for another couple of years at least - but my worry is that when it is time to sell, i will just get a pittance for it - and then i'll have to find a substantially larger amount for even a same segment (new) sedan. i may eventually, after weighing the pros and cons, decide to keep it like you suggested.

as far as pre-worship is concerned, i was a great one for that till the late 90s but after that have been inclined towards unworshipped ones. so is the family, therefore that option is out.

i agree with you - the anhc is a trifle overpriced (so is the jazz which is probably why honda is being trumped by competition of late. but your pointer about the high cost of vw ownership is worrying. a friend who had an octavia for 6 years, spent a considerable sum on maintenance (he did like the car tho'). so... yes. that point is also to be taken seriously.
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Old 29th August 2010, 21:34   #6
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My recommendation would be this (Maruti SX4 AT : 2000 KMs initial ownership report) . It ticks all the boxes including the upgrades he has chosen.
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Old 29th August 2010, 21:38   #7
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Quote:
Originally Posted by wilful View Post
As a professional, I am entitled to claim depreciation.
This statement of yours changes the dynamics significantly.

Do you have a ongoing loan for the current NHC ?, If no then you have to calculate the benefit of claiming the depreciation for a new car Vs the interest rates for a loan.

second thing you can consider is, do you have employees or partners ?, if yes, you can transfer the ownership of the NHC to the firm or partner and provide it for the use of employee (or partner it could be even your wife) and continue to claim depreciation/costs of operations. It could be a good employee retention method as well.

the key point you have to consider is does the brand you are considering to buy, have the credible dealer/servcie station in your city/town. one brand may be doing simply great in other geography, but if it is pathetic in my home town then i will suffer anyway.
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Old 29th August 2010, 22:30   #8
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Default Keep the City for 2/3 years!

Quote:
Originally Posted by wilful View Post
lamborghini - your first point has a lot going for it - i.e. keeping it for another couple of years at least - but my worry is that when it is time to sell, i will just get a pittance for it
I am inclined to disagree there. Your car would have shed a huge chunk of the value in the First 3-4 years. With each passing year the depreciation would be lesser.
From numerous ownership accounts I have observed The Honda City to be quite Frugal to Run and Maintain. With your kind of running(10k per year) I can see the car running for another 2/3 years easily with very reasonable cost of ownership.(depreciation also taken into account).
But a new car is going to hit hard in the first 2-3 years with high depreciation.

And The city, in its own respect is a Comfortable and Reliable Car with looks that has aged quite well. So I would recommend retaining it for at least 2/3 years more.
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Old 29th August 2010, 23:39   #9
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Quote:
Originally Posted by wilful View Post
lamborghini - your first point has a lot going for it - i.e. keeping it for another couple of years at least - but my worry is that when it is time to sell, i will just get a pittance for it - and then i'll have to find a substantially larger amount for even a same segment (new) sedan. i may eventually, after weighing the pros and cons, decide to keep it like you suggested.

i agree with you - the anhc is a trifle overpriced (so is the jazz which is probably why honda is being trumped by competition of late. but your pointer about the high cost of vw ownership is worrying. a friend who had an octavia for 6 years, spent a considerable sum on maintenance (he did like the car tho'). so... yes. that point is also to be taken seriously.
Firstly, as suresh has pointed out below, the car depreciates the most in the first 3 years of ownership. After that, the depreciation would be much lesser.
Hence, supposed the value is 4L today, after 3 years, you should still get 2.2-2.5L for it.
This would be an additional reduction of 1.5-1.8L or 50K - 60K/year.

Now on the other hand, suppose you are to buy a new car today and plonk in 5L more through a loan. Your EMI for the next 5 years would be roughly Rs10,500, or 1,26,000/year.
Now subtract the Rs 60K your car would be depreciating, and some additional maintainance, and you would save roughly 40K/year.
Now this 40K a year, if re-invested adds up to Rs. 1,50,000 roughly at 10%/year.
So now, you would have nearly 6L to plonk in as a down payment on a bigger car, which would let you buy a bigger car, for more or less the same EMI as you would be paying now.
Think about it. This is not including other saving you might have made, which would be contributed towards your next new car.

Now you need to decide if the tax benefits would actually be as beneficial for you.

Also, do go through GTO's thread. Might be helpful.
http://www.team-bhp.com/forum/owning...rade-swap.html (ARTICLE: YOUR 5 year old car : Keep, Upgrade or Swap?)
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Old 30th August 2010, 06:03   #10
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absynthguzzler - thanks - that is an option which has been on the fringes of my mind - will take a look at the SX4 thread - but i wonder how the 'q' is compared to a honda or a vw.

StarVegabond - no it is not a partnership- mine is a one man act. no employees except for a driver & typist.

sureshkishore - thanks v' much for the input. i will probably end up doing as you suggest.

lamborghini - GTO's thread is a wealth of info. intend having a chat with my auditor this week. i think keeping it for another 2 years looks like a better option (when the mind decides instead of the heart ).

Last edited by wilful : 30th August 2010 at 06:09.
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Old 31st August 2010, 12:18   #11
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Quote:
Originally Posted by wilful View Post
absynthguzzler - thanks - that is an option which has been on the fringes of my mind - will take a look at the SX4 thread - but i wonder how the 'q' is compared to a honda or a vw.

StarVegabond - no it is not a partnership- mine is a one man act. no employees except for a driver & typist.

sureshkishore - thanks v' much for the input. i will probably end up doing as you suggest.

lamborghini - GTO's thread is a wealth of info. intend having a chat with my auditor this week. i think keeping it for another 2 years looks like a better option (when the mind decides instead of the heart ).
Please keep in mind that the European cars have higher maintenance costs compared to the Japanese or Korean cars. Until and unless you want to drive the vehicle yourself and extract performance, I would stick to the non European cars.

Further your accountant can always make a cost-benefit chart for you to study the ownership costs of retaining your vehicle, buying a new one, or retaining the old one and buying a new one. Just make sure that the analysis contains fuel, routine maintenance, insurance costs also.
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Old 31st August 2010, 20:41   #12
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Aroy - thanks! Yes I have heard that European cars have higher maintenance costs. Have had a bit of personal experience since I owned an Opel Corsa briefly some years ago.
Have had a preliminary chat with the auditor and as of now I think I'll keep the vehicle for another couple of years (unless the heart makes me behave wildly).
Thanks everyone for your valuable inputs!
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