Is it time for me to Own a car?

This is my perspective and of course all your rants can be expressed as comments.
I remember those child hood days where some one who owns a car should be filthy rich or have serious necessary needs for commutation.

Usually it is business class people who end up buying cars. Here is my case which I present

  1. A business man travels an average of 40KMS a day for his business needs
  2. Commutes by Bus, train, taxi.

Let us understand his expenses on an average for his commutation purpose.
Taxi – 10 INR/ KM (minimum package usually cost 340 INR for 30 KMS and for 5 hrs and Extra 5 INR for additional KM)
Bus – 2 INR/ KM (ends up making loss because he has to wait to catch up one, travel and waste time because of frequent stops)
Train – 3 INR/ KM (ends up making loss because he has to wait to catch up one, travel and waste time because of frequent stops)

Kindly note: all rates are approx or closest to the actuals, you could calculate with your travel agency or taxi driver and have a better bargain
forced to travel by Taxi – 10 INR X 40 KMS = 400 INR
a) so monthly 400INR for 26 days considering he doesn’t commute on Sundays is 10400 INR.

A car cost 2.45 Lakhs INR a entry level like Maruthi 800 with AC (air conditioner)

Monthly petrol Bill:
considering if the mileage is 15KMS/ liter and the cost of petrol is 50 INRappox/liter and the business man commutes 40 KMS a day that is equivalent to 3 liters of petrol a day
1) 3 liters X 26 days X 50 INR = 3900

Maintenance charge quarterly
2) 4000 INR /4 = 1000 INR / month

3) Your car EMI is 2545 INR for the next 5 years if you paid upfront of 1.2 lakh INR

Loss on investment
Interest for 1.2 Lakh INR at 6% is 7200 INR/12 months = 600 INR

Now to the calculation
b) 3900(1) +1000(2) + 2545(3) + 600″(4) which is considered as loss of investment” = 8045 INR/ month

So what is the gain (a) – (b) = 10400 – 8045 = 2355 INR/month.

Apart from all of this, maintaining a car is not that easy.
Cleaning up your car daily, It takes minimum of 1 hr to do water wash at your residence if you are one who is going to clean
if you have some to clean it up a minimum of 150 INR as additional expenditure

Periodic water wash with wax polish helps the car to look good. You can do this every 3 months for about 450 INR

Well about the interiors, you need air refreshers like Ambi pur car or equivalent which adds to another 90 INR for every month.
upholstery – I leave the choice to you.

c) Insure your car properly, well you need to pay for this annually depending on the car you own

After buying your cars you may have different ideas of car stereos, mods etc that could put a hole in your pocket.

Do consider these things in to account.
If you car doesn’t run that min 40KMS/day you end up making a loss. (Your loss of investment)
You could save more money by converting your car running on petrol to gas (or rather I should say 50% as saving on fuel)

Things which a common man falls for buying a car

  1. Car gives you better shelter during rains
  2. Car helps to mobilize more people usually 4 people at a time
  3. It helps my old parents to visit hospitals.
  4. It helps my wife to do shopping and drop/pickup at school for my kids.
  5. Car is a status symbol (Status symbol – you would have heard about Germans loving his car than his wife)
  6. EMI’s as low as 100/day

There are few more pitfalls
Owning a second hand car – unless or untill you strike a better deal.
Car from manufacturer – there are certain cars in the market where the resale value is less.
Don’t just by advertisements, go by friend referrals, usually Advertisers make the day.

The above are the usual pitfalls. I have given you a rough calculation for you to do your own math
If your (a) – (b) – (c) gives you profit, you can go for a car. And do remember having your car in the garage doesn’t help you in saving money.

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2 thoughts on “Is it time for me to Own a car?

  1. Pingback: ccar insurance

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