Cover Story

The Economic Times Wealth, October 3-9, 2016

What is the real cost of

owning a car?

03

since most mobile phones allow you

to do that, he adds. One should, of
course, give preference to safety features like airbags, as well as reverse
parking sensors. A good compromise is to pick a mid-level model instead of a fully loaded one and upgrade with features you want on
your own.

The price at which you buy a car is not the only cost you incur. Over a period of five years,
heres the actual amount you will spend after considering the loan interest, fuel cost,
maintenance, insurance and registration charges for a Maruti Suzuki Alto 800.

COST OF OWNERSHIP (For Maruti Suzuki Alto 800 Std)

Insurance

PURCHASE PRICE

FUEL COST

Price of car

Cost of petrol
`64.05 per litre (Delhi)

`2.49 lakh

REGISTRATION /
ROAD TAXES (approx)

Mileage: 20.3 km/l

Registration charge
`10,000

EMI: `4,240

Distance covered in 5 years

60,000 km

Road taxes for 5 years

`20,000

`1.99 lakh (80% loan @10.5% for

five years)

TOTAL FUEL COST

TOTAL

`1.89 lakh

`30,000

Loan cost

`55,411
TOTAL COST OF OWNERSHIP

`3.04 lakh
one. Talk to at least 2-3 dealers.
Though they arent allowed to give
discounts beyond the official OEM
(original equipment manufacturer)
figure, talking to at least three dealers will allow you to push and get a

AVERAGE ANNUAL COST

`10,000
TOTAL COST IN 5 YEARS

`50,000

INSURANCE COST

Total interest

TOTAL PRICE OF CAR

MAINTENANCE

`3.04 lakh `1.89 lakh

`30,000 `50,000 `38,590

better deal. Also, negotiate with the

dealer separately, with and without
the loan. Very often, you can get a
better deal with a loan as the dealer
gets an income on it, but crosscheck
with your bank too, says Kumar.

`6.11
lakh
Features to look for
The next decision concerns the car
itself: should you buy the base version or the top-end one? You
should go for a higher version because there are several useful fea-

Average annual insurance cost

`7,718 (PolicyBazaar)
TOTAL COST FOR 5 YEARS

`38,590
tures that you just cant upgrade.
For instance, you cant go from
manual to automatic transmission,
says Kumar. But dont opt for all
the features blindly. You can do
away with the navigation feature

While there are no discounts on insurance, you can bring down the
premium if you transfer your noclaim bonus on the existing car to
the new vehicle. For instance, a
`14,000 premium can be cut to
`7,000 with a 50% NCB.
There are other ways you can cut
the cars price. Time your purchase
by buying during the festive season
or in specific months like December
or March, when there are big discounts. But remember that a December purchase will cut the resale
value of your car since it will be
considered a year older compared
with a January or March model. You
could also get better deals for cars
that are not on the waiting list or of
an unpopular colour, or even specific variants.
As you go through the list of top
cars in three categories in the following pages, keep these cost-cutting
measures in mind to make the season even more festive.