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-   -   ARTICLE: The real cost of car ownership (https://www.team-bhp.com/forum/buying-car/17749-article-real-cost-car-ownership-4.html)

Thanks GTO. I suggest you add this info to your other two threads: What to do after owning a car for 5 years, and the lateral upgrade. This makes for a very compelling argument to keep your car once the loan has been paid off, and to go for a used car that will save you a good amount of money every year.

Hi all,

I think that buying and owning a new car is more or less uneconomical for *most* working professionals these days (emphasis on word 'most'). If one lives close to his/her place of work and the work kind of keeps the person busy, then monthly usage is very little.

Even for those who mention the flexibility of owning a vehicle (and I agree with all of those points) you only have to look at probabilities. How often will you suddenly need a car at 2 am to go to the hospital/airport? How often will you be fleeced at autorickshaw/taxi drivers at inopportune times? How often will you go on trips with family and a full complement of luggage? If these probabilities are so low, can you still justify that you need that car even on non-economic grounds?

I think that's a futile exercise. If we start doing that then there's hardly a market for C/D-segment cars here, or even the upper B-segment cars for that matter.

The one philosophy I really would like to subscribe to is that we shouldn't be paying interest on a depreciating commodity. So try to pay as much as possible of a vehicle's cost upfront and opt for flexi-loans which allow you to pay off any amount at any time towards the outstanding balance. Loans should ideally only be made for home purchases and higher education.

However, what if, in the process of saving for your dream car, the model is outdated by the company and not produced anymore? I've fallen into this trap a couple of times (Baleno, Skoda RS, ...). So it's a trade-off :).

If we come down to it there are so many things in life that we really don't need. I go by the guiding principle that as long as you stay solvent and have enough liquidity to meet regular any emergency expenses, then just go for your dream vehicle.

Apologies for the long post. I'll get off my soap box now :).

Thanks,
spadix

Based on various inputs from this forum, I decided to create a TCO calculator / comparison spreadsheet.

I am attaching the spreadsheet here for anyone to use/criticize/update.

All rates and taxes are Goa-based. Kindly update the corresponding columns and road tax formula for your city/state.

All columns in blue can be filled in by you based on the comparison you want.

The following cars are in the sheet:
sx4 variants, linea variants, city variants, fiesta diesel, optra diesel, cedia

Following are some of the items considered in the spreadsheet:
1) initial costs:
showroom price, road tax, 1st yr insurance, OTR price
2) loan:
amount, rate, tenure, total interest
3) 5 year cost:
fuel based on economy, spares (considered equal for all), insurance
3.a) for professionals/businessmen (5 yr):
depreciation, running expenses (fuel+servicing), interest expense, tax rate & benefit
4) claimed sale value (approx, based on discussions here)
5) some additional info - assumed cost of new car and depreciation calculation between sale of old car and cost of new etc

Moving ahead on similar lines, here's how my CA showed me how to calculate the WDV when exchanging old car for a new one.

note: Written Down Value or WDV is the depreciated value of an asset (movable or immovable) for purposes of taxation -http://en.wikipedia.org/wiki/WDV

Carry over depreciation = Old Car WDV + New Car Price - Old Car Sale Price

eg 1: (low resale car, selling for 1L less than its depreciation value)
Old Car WDV: 4L
Add New Car: 9L
Total: 13L
Less Sale of Old Car: 3L
Carry over WDV = 10L (this is the effective cost of your new car as per tax stmt)
1st yr dpr=15% of 10L=1.5L

eg2: (high resale car, selling for 1L more than its depreciation value)
Old Car WDV: 4L
Add New Car: 9L
Total: 13L
Less Sale of Old Car: 5L
Carry over WDV = 8L (this is the effective cost of your new car as per tax stmt)
1st yr dpr=15% of 8L=1.2L

This means there is some benefit for professionals/businessmen if the car sells for a low value.

In the OTR price mentioned for the ANHC V/AT model, is it for the Top-End Inspire variant (with all optional accessories & spoilers)?

Nope. Base V/AT OTR in Goa. I haven't considered any trims/spoilers for any car.
If I eventually go for the City, I will change the front grille, which will cost about 15k more.

Out of Topic, but still i have this doubt after seeing the spreadsheet. Does linea give more mileage than Fiesta or it is a typo? I was told my one of my friend that his Linea D is giving him mileage somewhere around 17-18 kmpl and another friend who ones Fiesta is saying he will get 19-20 kmpl basing on the road and trafic conditions. I'm confused now.

BSIII Lineas will give 17-18. BSIV should give 19-20

Fiat India

the service costs for diesel are almost double than that for a petrol. Ex- for a verna petrol costs are 2500 while for diesel 5K for a normal paid service at 6 months intervals. NOt sure about others, but usually diesel services costs much more.

Are you sure about that in modern diesels?

A lot of people on this forum have indicated that servicing costs of modern diesels with respect to petrols has evened out. Furthermore, petrols usually have a shorter servicing period.

Also, when you frequent the official station, service managers tend to push unnecessary expensive stuff, some of which you end up agreeing to for fear of voiding an extended warranty.

If this is based on your experience of Verna diesel, that would mean a Verna diesel would have a 10k per year servicing cost. Do we have a thread of actual servicing costs?

@echo77
Can you add the Fiesta petrol figures also in the excel file taking into account a lot many queries/confusion in the three sedans i.e SX4, City and Fiesta. It would give a clear picture of the TCO of all three in particular.

Ok - will upload my updated sheet this weekend with fiesta petrol added as well. I have also put in Civic, Cruze and Altis just for the fun of it.

Please add more suggestions if you want (specific models). Let's try to make the sheet comprehensive.

@echo77 nice work, I was planning to go with ANHC SMT but it will be VMT now :)

Thanks Sn1p3r. Good to know the sheet helped! I have myself dropped out the lower ends after getting the numbers on the sheet :D

Here's a new version for those asking for Fiesta petrols, only the top end S and SXi are included.

Did not add Civic as its base price is 13+.

Did not add Altis J because its a car without anything else. You get seats and a steering wheel and a gear knob, but nothing else.

Very good work, echo77!

It is interesting to note that your work is suggesting that the conventional notions of 'diesels being cheaper than petrol in the long run' could be wrong. I know there are already some threads on this, but your data is one more useful evidence in that case. For example, you are showing that both Linea petrol and Fiesta petrol have lesser TCO than their respective diesel models.

Thanks,
-AD