Team-BHP > Team-BHP Advice > On owning a car

  Search this Thread
Old 28th August 2008, 13:18   #61
Senior - BHPian
PatienceWins's Avatar
Join Date: May 2007
Location: Bangalore
Posts: 2,412
Thanked: 794 Times

Excellent thread. I agree with GTO that people usually just look at EMI while upgrading.

I intend to keep my one year old Getz long and I have taken 3 year extended warranty other than the 2 year standard warranty.
Even if I go for a higher segment car, this one will be used by wife.

I buy car with my savings.

I am passionate about my car and I do not like to have any mortgage on that.
Interest transactions are not allowed in my religion, Islam.
PatienceWins is offline  
Old 28th August 2008, 14:00   #62
Team-BHP Support
Join Date: Feb 2004
Location: Bangalore
Posts: 14,808
Thanked: 27,578 Times

Warren buffet was still driving a Beetle at his age of 75
Wrong - he drives an old Ford station wagon

The facts in this thread are absolutely correct, but do not apply to everyone. If it was only about real cost of upgrading the car, then yes the figures are shocking and spot on, but for a lifestyle, its different for everyone.
True - I question myself why did I sell my cars

Peugeout 309 SRi - wanted a low cost fast car (I had no car!) - sold as I had to move
Tata Sierra - sold as it was giving problems and exit price was good
Zen - great for us both but baby baggage and frequent in-laws dictated more space
M-800 - wife travels 20 k to pick up my daughter occasionally, I wanted more safety
Vtec - more safety at speed, more comfort, vtec tiring after 3 hours on road

Mainly practical reasons - there are folks who merely change cars every three years due to perceived breakdowns etc and get the same thing
ajmat is offline  
Old 28th August 2008, 14:25   #63
Senior - BHPian
esteem_lover's Avatar
Join Date: Jul 2006
Location: Madras/Py
Posts: 7,556
Thanked: 500 Times

I have a 10 year old esteem, been having it for more than 5 years now. Had another esteem before that & a M-1000 before that & my first car was the 118 NE. From my experience i can say that i have changed my cars whenever i could afford to get the next better car.

Right now i am holding on to my 10 year old car because i cannot see anything better at my affordability levels. I could (& might also) get myself a OHC or a Lancer, but then they will also be 5 years old or more. I do not fancy any of these modern cars except for their gizmos.

Originally Posted by ajmat View Post
Vtec - more safety at speed, more comfort, vtec tiring after 3 hours on road
Why is the Vtec tiring after 3 hours on the road ?
esteem_lover is offline  
Old 28th August 2008, 16:15   #64
Team-BHP Support
GTO's Avatar
Join Date: Feb 2004
Location: Bombay
Posts: 70,103
Thanked: 296,397 Times

Good post, Ym-enjn. I agree with most of the interesting comments, except:

If everyone thinks like that then nothing above swift and Honda city should exist.
Not at all! You are missing the point of this thread. I am ALL for big cars, in fact, the bigger the better for me. My next car will, in all probability, be a premium European sedan. The point is : Use your car for what it's worth. Using only 30% of the life of your car, and selling it for 40% of what you originally paid for it doesn't make financial sense. For instance, I am not complaining about the sticker tag of my C220. But I can assure you, I will use that car for a long time to come. It's not going to see the block @ 70K kms. Hell, Merc diesels are supposed to be run for a coupla lakh kms.

Again, I am all for premium cars. My point is : Make a reality check on the useability of your current car as well as the cost of upgrading.

Originally Posted by esteem_lover View Post
Why is the Vtec tiring after 3 hours on the road ?
To start with, an entirely unsupportive drivers seat.
GTO is offline  
Old 28th August 2008, 17:17   #65
Senior - BHPian
kutlee's Avatar
Join Date: Jul 2005
Location: Hyderabad
Posts: 1,141
Thanked: 232 Times

Originally Posted by GTO View Post
The point is : Use your car for what it's worth. Using only 30% of the life of your car, and selling it for 40% of what you originally paid for it doesn't make financial sense.
really hard GT, really depends on finances. As Jeremey said, if you buy honda, you will die with a (same) honda.
I still liked to keep my Santro when i bought OHC, but then parking probs, unnecessary insurance payments etc etc.
So it depends really on many things. Couple of fellows here downgraded their car since they felt that their cars are 'cursed and unlucky'. an surprisingly happy with their new small cars.
kutlee is offline  
Old 28th August 2008, 17:55   #66
Senior - BHPian
Ym-enjn's Avatar
Join Date: Jun 2008
Location: Jaipur
Posts: 1,039
Thanked: 57 Times
Warren Buffett's Words of Wisdom

Originally Posted by ajmat View Post
Wrong - he drives an old Ford station wagon
Ok.. not now but till a big part of his rich life...

The larger the amount of money you lose, the greater the impact on your ability to earn money in the future. That is something that Warren has never forgotten. It is also the reason why he drove an old VW Beetle long after he was a multimillionaire.

Source: The Tao of Warren Buffett
Ym-enjn is offline  
Old 28th August 2008, 18:26   #67
Team-BHP Support
Rudra Sen's Avatar
Join Date: Apr 2004
Location: Bangalore
Posts: 11,547
Thanked: 6,472 Times

Originally Posted by GTO View Post
Some more food for thought: While I have shown the benefits of owning a car for atleast 10 years (and which I practice), there are decent benefits in owning a car for 7 - 8 years too.
I totally subscribe to this. I really donít see any point on selling a car in three years time unless it has covered a serious distance. Point in case is my car.
Bought: 2004, March.
On road price: 11,57000/-
I got 100% funding for ex-showroom from ABN AMRO @ 7.25%. For five years EMI is close to 19000/-
Insurance average per year should be around 17000/-
Maintenance and service cost till date 7000/-. This figure includes one front strut change. Apparently they found it slightly weak and suggested a change.
My EMI will be through by March, 09 and I donít see my car is going above 35000km by that time. Currently odometer reads 27400km.
So Iím way below in terms of mileage especially when roughly the standard is..
But selling a 4 - 5 year old modern sedan that has covered only 60,000 kms just doesn't make any financial sense.
..Why should I think about selling? I donít even want to know the current market price. I know itíll be shocking.
Using only 30% of the life of your car, and selling it for 40% of what you originally paid for it doesn't make financial sense.
I agree and how!
Rudra Sen is offline  
Old 28th August 2008, 18:42   #68
Senior - BHPian
asr245's Avatar
Join Date: Dec 2007
Location: Gurgaon
Posts: 1,162
Thanked: 389 Times

Originally Posted by GTO View Post
Selling a two year old Wagon R? You will take a huge depreciation hit, considering that any car loses its value fastest in the first three years. However, for hrag who has posted right after you, it probably makes sense as a diesel Indica @ 90,000 kms is on the verge of losing its reliability. Atleast most Indica's do a little after a lakh kms. At the end of the day, it is obviously dependent on the car. I don't suppose my Tata Indigo is going to give me reliable service for 2.0 lakh kms. And maybe it makes sense to upgrade for the Alto owner who suddenly see's his work taking him on the highway way too often. For safety alone, he could upgrade to an ABS / Airbag equipped hatch.

Now now, don't even get me into the calculation of costs related to upgrading a girlfriend / wife / kid every 5 years
Actually I wasn't sure whether I should be selling my wagonR. I was thinking of keeping it for city usage (and hopefully be able to keep my brand new car scratch free for longer). BTW.. I bought it 2nd hand when it was 6 months old. Interestingly I am directly upgrading for a wife soon. How much would I lose in that?

(God I hope she never reads this else my upgradation plans might get cancelled!)
asr245 is offline  
Old 28th August 2008, 18:59   #69
Team-BHP Support
GTO's Avatar
Join Date: Feb 2004
Location: Bombay
Posts: 70,103
Thanked: 296,397 Times

Originally Posted by Rudra Sen View Post
I totally subscribe to this.
Considering that you drive an Amby from the 60's, recently sold an 80's type-1 800 and will keep your Optra for a long time, you and me are part of the same family, Rudra ! Your Optra is truly another classic example of the point of this discussion. 4 years old, maintained really well, has a long life ahead and looks smashing....I would shudder at the thought of selling it. The low resale won't help too much either. Considering that you aren't a high-revver, how much more space, comfort or lower maintenance is another 12 lakh car going to give you?

P.S: On a related note, let's see whose Classic or Ambassador goes on the block first.
GTO is offline  
Old 29th August 2008, 16:57   #70
Senior - BHPian
StarScream's Avatar
Join Date: Nov 2007
Location: Noida/Delhi
Posts: 1,263
Thanked: 665 Times

Originally Posted by GTO View Post
I still don't see how this would be possible since, on a 5 year loan, the principal outstanding (at the time of sale in 2 years) would be substantial. In fact, whatever your Zen or Esteem fetched in resale would go toward loan closure. Plus, the bank would have charged you 2 - 5% in foreclosure fees? Could you please look up numbers and share them with us? Would love to know more about this unique situation, and a possible opportunity.
Your post got me thinking - had I inadvertently hit upon a brilliant Ponzi scheme? Turns out no.
I remember I paid off the Zen loan ahead of time at a 2% charge. So when I sold it, all the resale money went toward the Esteem. So you're right, I had forgotten about foreclosing the loan. I thought I did that with another car when I wrote the earlier post. One has to consider that out of pocket expense.
However, that was not the case with the Esteem. I used it for 2 1/2 years, sold it to Honda, who closed the loan and adjusted the remainder toward the City. In this case there was no out of pocket payment.
The EMI's went up like this (from what I can remember) - about 6k on the zen, about 8-9k on the Esteem and 11k on the City. If I had to pay the same interest rate as the Zen on the City my EMI would be a lot higher. From the Zen to the next two cars, falling interest rates helped lessen the impact.
The key points here are -
1. small cars from well-regarded makes really hold their value
2. If you're a serial upgrader, buy cars with the best resale
3. falling interest rates help up to a point.
StarScream is offline  
Old 31st August 2008, 03:41   #71
Join Date: Jun 2007
Location: New Delhi
Posts: 56
Thanked: 44 Times

great post GTO.

i was planning to change my 2004 CNG Hyundai Santro which has done about 62000kms on the odo and upgrade it to the upcoming city. but after reading your post i feel as if i want to keep it for another 5 years.
coolmob is offline  
Old 31st August 2008, 12:13   #72
Join Date: Feb 2007
Location: chandigarh
Posts: 69
Thanked: 20 Times

I agree with GTO about the financial aspects of buying a new car and selling a five year old car.

But, there is also the emotional aspect of the upgrade which is mostly the defining factor and overrides the other factors.
wolg is offline  
Old 31st August 2008, 13:24   #73
Senior - BHPian
Join Date: Jun 2006
Location: bangalore
Posts: 1,266
Thanked: 308 Times

Well, here is an interesting anecdote about buying used cars. This was told to me by the CEO of a US startup I worked in previously. In short,
* He never bought new cars
* He would scout for mint condition cars between 1 and 2 years old
* He would only buy from direct owners (1st owner)
* Typically, he bought Lincoln Town cars or similar large (and safe in his opinion) American cars
* Mileage less than 10k-15k miles on the car
* He would get 20-40% off new car price
* He would drive the car for about 4 years or so and then repeat the cycle (because as he said he would be tired/bored with car many years before the car actually gets into problems)
* Car hunting would take him several months typically but his existing car would be still in top condition, so he has no real hurry.

This was back in year 2000 or so. I was amazed to hear this since I thought - wow, this is a CEO speaking, and back in India, everyone I knew from the engineer level only wanted to buy a "new" car (including myself) ...


Last edited by lancer_rit : 31st August 2008 at 13:26.
lancer_rit is offline  
Old 31st August 2008, 21:13   #74
Join Date: Mar 2005
Location: goa
Posts: 996
Thanked: 67 Times

Thanks to the collective wisdom expressed here, and specially GTO's comments about "Using only 30% of the life of your car, and selling it for 40% of what you originally paid for it", - I have decided to keep my Baleno and am abandoning ideas of change, at least in the next couple of years.
I also looked hard at the depreciation benefits, and it has dawned on me that it does not really make me jump for joy.
To clinch my decision, I took a long looping ride in the Baleno through the nearest highway with Stanley Clarke and friends !
filcord is offline  
Old 1st September 2008, 11:10   #75
Team-BHP Support
bblost's Avatar
Join Date: Jul 2007
Location: Hyderabad
Posts: 10,955
Thanked: 15,111 Times

I guess the most important thing then is to buy a car, which you truly truly love and can enjoy for a real long time.
Find the best match in terms of mileage, speed, power, handling and everything else.
You will be keeping it for a real long time.
bblost is offline  

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright ©2000 - 2024,
Proudly powered by E2E Networks