[xway]

Hello,

I tried searching for a similar thread, came across many threads on best time to buy a car, but nothing on the current post-covid situation which I do not feel is the right time to buy a car.

Mods Please free to move or merge to relevant thread.

My car is now 10 years old, and I drive a humble i20 which still fulfills all that I need from a car and runs as good as new.

The itch to upgrade a vehicle or rather FOMO made me keep an eye on new launches and procure a new car for myself.

But on doing a practical review I see so many points that I now think that its absolutely wrong time to buy a new vehicle. The opinion is my own based on research and time spent on various matters.

I am listing the points below for everyone to share their thoughts on.

High Car Prices -

Believe it or not, I bought my i20 at 5.5 lacs OTR 10 years back, now I doubled my budget to 11 lacs, and lo and behold - at double the budget I am getting the same car/segment with even lesser features. I am shocked to see that now cut sedans, premium hatchbacks, scaled down SUVs are all costing north of a million rupees. I do not know if that is justified or the auto industry milking the consumers by artificial shortages. Not to mention the government imposing road taxes and other charges by making hay during the current times. Whatever but the prices definitely does not allow me to upgrade even at 2X my budget.


Huge Fuel Prices -

Be it petrol or diesel, the prices now are borderline insane. The taxes make up a whopping 200% of the base fuel cost, the government puts it as 66% or total cost to show it as less, but it comes out to 70rs./litre on 40rs of petrol cost. You can calculate for yourself on diesel. In 2014 the tax per litre of fuel was 3rs/litre to now 70rs/litre that's a 2300% increase in taxes alone, not to mention the base price increase to double too.


Fuel options / tech -

We are running on fossil fuels and majority of automobiles are totally running on petrol, diesel and some on CNG. With push towards other fuels like hydrogen, electric, methane and others, we do not know what would be likely scenario in the coming years. Every day the policies are changing that too without any deep thoughts, and in the same way possibly can be withdrawn after all the hullabaloo. Most importantly the methane addition to petrol which current cars do not support and seems like there is a huge push towards that. We have already heard cases of brand new cars stalling due to the new mix.


Poor Buying experience -

People have thronged to showrooms to buy cars as though there is no tomorrow, if you visit a showroom chances are you will be asked to cough up booking amount without even seeing a car, and then too you will be in queue. Forget the premium experience of being welcomed, shown around, treated like a king that used to be the norm some years back. Now its like they are doing a favor by granting us the privilege of buying a car. You are thrust upon to pay higher insurance premiums, other charges, buying accessories just so that you can be granted a car from your lordships. Test drives for your chosen model - you will be seen like you are from another planet just for asking this. Its take it or leave it.


Insane Delivery times -

Inspite of paying upfront, bearing the tantrums of the car dealerships, there is no guarantee to get your elusive car. The delivery times are running into months and sometimes years that too without any firm commitment. With reasons like chip shortages and other alibis they are getting away with anything they desire leaving us in a lurch. There is no price lock also even if you book the car, making it totally useless to book the car.


Policy Changes -

New scrapping policy has already been declared in a rush, fuel mixing with methane is also being rushed, electric powered cars are being debated. With no clarity and mature technology or infrastructure in any of these yet. The ruling government approach is to do things just for the sake and market it as a master stroke against pollution, fuel imports and whatever basically comes to their mind. No firm and concrete guidelines are spelled out as yet. I do not think even the policy makers themselves are aware on what needs done and how. With such uncertainty is this the right time to buy a new vehicle ?


Economic Uncertainty -

Covid had caught us unawares in both the first wave and the second wave. Now with may countries witnessing the third, there is a big economic uncertainty. How will the country fare ? Will there be 3rd wave ? How will economy behaves ? Will there be jobs/employment opportunities ?
There are many questions with no apparent answers, brings back to the question is it a good time to put your money that too in such condition in buying a new vehicle ?


All said and done, for me these all are enough deterrent and now stopped thinking for a new vehicle completely, there have been many temptations like XUV 700, Magnite, Astor, Creta but still I am going to hold on.

Please share your thoughts and reasons, if you bought a vehicle recently or planning for one.

[ValarMorghulis]

This line right here, negates any requirement of a new car.

My car is now 10 years old, and I drive a humble i20 which still fulfills all that I need from a car and runs as good as new.

Wait until you really really want a new car. Even in a couple of years there will be a huge change in the car scenario with EVs coming in and new tech pouring in. Plus, the chip shortage will ease as well.

Edit:

PS: I bought a new Hyundai Verna SX+ in November 2019. So far I've run it 3000 Kms while it is parked in Bengaluru & I'm in my native place Nainital.

[ninjatalli]

Originally Posted by xway

Believe it or not, I bought my i20 at 5.5 lacs OTR 10 years back, now I doubled my budget to 11 lacs, and lo and behold - at double the budget I am getting the same car/segment with even lesser features.

Just accounting for inflation (calculator), 5.5L in 2011 is equivalent to ~11L today so no surprises on that. Your car might have got lesser features basis how Hyundai is currently pricing the various models, but other factors have gone up too - government taxes, safety features, emission regulations and so on which wasn't impacting you or Hyundai back in 2011.

Long story short, i20 is still a fantastic car (and probably one of the best VFM cars from the Hyundai stable in addition to the Santro) in today's world - you should just retain it till you really really need a new car.

[d3mon]

It's just inflation plus some basic safety and convenience features that have increased the car prices. 10 years at 7% inflation is enough to double the price of any product.

The factors that you mentioned are here to stay - you can choose not to upgrade, but things are only going to get worse from here on in terms of purchase /running costs. I personally think that EVs are a short term solution for running cost as the Govt will tax them heavily both on sale and for charging as soon as the masses start adopting it. So I wouldn't hold my breath for the EV revolution saving significant costs for the end customers in the future.

Two options as I see it - keep enjoying your present car, or get a couple of years old pre owned one for 30 percent off.

[narayans80]

The insane waiting times due to chip shortage is the only reason I wouldn't buy a car today.

New car prices, High fuel prices are always relative.

[raksrules]

I actually booked my car just few days back but we were planning to buy last year but then lockdown and all so didn't go ahead. Now that in few months, schools may start, and car was primarily for wife for school run about and all, now we feel it is right time to buy. For me, the wait is 4-6 weeks as told by SA but then I am not buying some expensive or in demand car (mine is S-presso).

[logicalidiot]

Couldn't agree more on the cost of cars these days. After accounting for inflation, increase in cost of raw materials and other aspects, the cost of the same car/equivalent model is at least 50% higher these days. Not to forget the insurance cost, which is also increasing simultaneously - even if you have NCB, you pay more or less the same renewal cost due to increase in insurance costs every year.

We own a VW Polo bought 10 years back similar to yours. Having clocked 1 lakh+ kilometres, my dad has a small itch to change the car and he would probably do it if he receives the push needed from the family. But I feel it is not worth it for the reasons listed below.

• High priced cars mean you don't really get an upgrade unless you're willing to pay at least 2x the price of your earlier car.
• Insurance costs are high.
• EV could be the next big thing if you could wait.
• Uncertain vehicle scrappage policy. If indeed the cars are to be scrapped within 15 years, then one needs to think again before spending money on expensive cars.
• Lack of good choices?
• Increase in fuel prices makes EVs a better choice but we haven't yet reached the point where EVs are mass adopted. This could change in the next 5-10 years, which makes you think again - is it a good time to buy a new car?

P.S haven't voted the poll as I don't think the factors have anything to do with pre-covid & post-covid era. The cost of cars were increasing year on year even before the covid!

[rsidd]

Originally Posted by ValarMorghulis

Wait until you really really want a new car. Even in a couple of years there will be a huge change in the car scenario with EVs coming in and new tech pouring in. Plus, the chip shortage will ease as well.

That's my point of view too. Mine is a 11 year old Punto, 98000+ km. I'm waiting and watching the market; no hurry to upgrade, but I probably will have to do so in the next 3-4 years. Hoping for more affordable EVs with better range and infrastructure by then.

Haven't voted, I don't think covid is relevant to the decision (except to the extent that it's relevant to the chip shortage).

[VW2010]

The first car purchase has no logic. It's just the eagerness to own one that drives us to plonk money on whatever is hot in the market at our price point. The second car is usually the logical upgrade to a slightly premium car. Logical car purchase starts at car no 3. This upgrade will mostly be a used car, clearly solving a specific requirement and not falling for bells and whistles.

IMHO there is no right or wrong time to buy a car. If you can afford it and are not throwing your lunch money to satisfy ownership EGO, you should buy and enjoy these little things.

Puneeth Kumar is a prime example of what really can happen to each one of us waiting for the right time. We may never enjoy those small things and be already gone.

[Turbohead]

Another way to think about it -

With the way things are going, today might actually be the best day to buy a car considering how things are becoming more expensive day by day.
PS: I've become very pessimistic these days

On a serious note, if not for additional safety features, cars haven't really improved in the past decade with respect to the basic requirements- a means of comfortable transportation within the prescribed speed limit.

The technology, power output have all gone up and it's upto you to decide whether it's worth it or not at twice the prices.

Fact is, cars may be correctly priced with respect to inflation but then the ride you already have is a bargain if it meets all your needs.

[IshaanIan]

I think you forgot to add one more point against buying a new car:

judging someone based on their material acquisitions is dwindling out of fashion; if your car runs well, keep it and use it. There is nothing radically new and worth upgrading to.

[84.monsoon]

In Finance, we generally speak of the rule of 72, to figure out when your money gets doubled. For example if the annual interest / rate of return is 5%, it will take 72÷5 = 14.4 years to double your money. We know that the inflation rate for industrial goods in India has been around 6% over the last decade or so. The average interest rate for bonds has been around 7%. This means if you where a conservative investor in 2011, and put your money in a safe investment vehicle such as a bond fund, your money would have doubled by now. On the other hand, if you were more risk averse and used bank FDs primarily, your interest-rate would have been about 5.5 to 6%. In that case, your money would have increased in value by about 80%. Yet again, if you had slightly higher risk appetite and put half of your money in the stock market and the rest in an FD, you have made an average annual return of at least 8 to 9%, if not higher. In this case, your money would have more than doubled by now.

So therefore, it is no surprise that car prices have also doubled in the same period. In fact, I think there are some cars which you can buy at prices much less than double of the price prevailing 9 to 10 years ago. A good example could be A mid variant Honda city MT. If I remember correctly, a City V MT model cost about 7.5 lakhs in 2011, and today, literally the same engine and transmission with some tweaks plus a larger body and more features is available in the latest generation. Even the lowest variant of the new gen City is better equipped than the mid variant of 2011. And it costs about 11 lakhs ex-showroom. So the inflation on the Honda City, which is the closest comparable car in a 10 year horizon, has been less than 50%.

So all in all, I think this is not a bad time to buy a car. Car prices have definitely increased, however in relation to inflation and rate of return on investment, it has not increased all that much. Also you get an amazing variety of cars that were not available 10 years ago, much safer and more fuel efficient. You get more power and fuel efficiency, thanks to the arrival of the turbo-petrol engine equipped cars. There are new segments that you can shop in, such as the compact SUVs, which did not exist 10 years ago. There are mainstream electric car options which did not exist back then. We do see the exit of some wonderful cars such as the Ford Fiesta etc, however this is compensated by the arrival of new players such as Kia. So all in all, it’s a great time to go out and buy a new car, if you’re prepared to wait a few months to get the right car that you like. Considering car ownership as a long-term affair, a few months wait is not a big deal in my opinion.

So, I have voted NO to the above poll.

[GTO]

It's a total seller's market out there as demand is outstripping supply across the board, for the first time since the 1990s. Hence, I have voted for yes. Stiff prices, long waiting periods, lesser discounts, limited choice of colours or variants...not a good time to be out shopping. Worse part is, even among used cars, it's the same. High prices + good cars sell on the same day.

Final blow is from the fact that, 2020 was the last year of some truly awesome engines (Maruti's 1.5L Diesel) & cars (Hexa), while 2021 saw BS6 diesels showing their ugly side via DPF issues.

If I was in the market for a new car, I'd cancel the plan and wait for another year or two for supplies to stabilise. By that time, some of my favourites (XUV700, Thar, Kushaq) would have sorted their initial niggles too .

[ashis89]

Post Covid or not, the lack of clarity on vehicle and fuel policy would be a major reason not to go for new purchase but maintain status quo.

In the last few months, worried by the high fuel prices and ever increasing monthly expenses, people were forced to do calculations and look for alternatives. They bought CNG cars or even EVs considering monthly savings over a petrol/diesel car. Now imagine their plight after yesterday's price cuts! While the savings will continue to be there, the impact will be damped.

[WorkingGuru]

Voted for Yes.

Commodity prices have bloated viz leading to increased off-take of inferior/impure raw materials like steel, copper, aluminium, cement etc. All this is in the backdrop of the slowdown running upto Dec '19 - so due to an uncertainty of continued long term demand, investments may take a while to come in.

Also, disparity of income has drastically increased in the last 18 months, especially in Tier-II & Tier-III industrial cities - some harsh after effects of which will be seen in the next 3-4 years.

So, unless you want to buy a car for basic social distancing & for old people, this is not the time to buy a car.