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    Cost of Ownership of Car in India

    With so many varieties of cars available in the market, it has now become much easier for the car lovers to own a car. Right from budget-friendly family cars to affordable sedans, the car manufacturers are rolling out plenty of low-priced car models every new month alluring people to secure a car of their own. The low-cost cars have actually changed the car buying scenario in India with more and more people securing a car of their own. While this option has actually opened up ways for people belonging to multiple economic strata to make their car buying dream come true, there are several other factors that need to be considered while buying a car.

    Among the several vital factors, the cost of ownership of a car is one major area that should be seriously pondered upon. While for most of the people, the purchase price of a car is its real cost, the actual scenario is completely different.

    What is Car Ownership Cost?

    While buying a car, after finalising the budget and the desired car, the next important step is to calculate the actual cost of ownership of the vehicle. The purchase price of a car isn’t the real cost of owning it as in the long run, there will be a number of additional costs and expenses that the owner will have to probably incur. For example, if you are planning to purchase a car by investing Rs.5 lakh, this is not the only expense that you have to make for the car. In the coming 5 to 10 years, several other expenses including the registration tax, road tax, car insurance premium, car loan EMIs (if you have taken any), monthly fuel expenses, car maintenance and servicing cost will get added to the list.

    However, it is not possible to calculate the cost of ownership of a vehicle accurately as most of the expenses are not pre-fixed. Anyway, it is not necessary to have an accurate figure, a rough estimate of the additional expenses will be sufficient to decide the real cost of ownership. In order to get a rough estimate of the real ownership cost, calculate all the above-mentioned costs and charges.

    Components of Car Ownership Cost

    As mentioned earlier, car ownership cost is not only the price of the car, but there are various other factors or components which comprise the actual car ownership cost. The ownership cost of a car depends on various factors which are detailed here:

    Purchase cost- The purchase cost of a car is the on-road price that the buyer pays to buy the car. This purchase cost or upfront cost of car purchase is the net on-road price of the car fixed by the car dealer after giving all discounts. Though this cost is usually thought to be the only cost of owning a car, this is actually just one among the various components of the cost of car ownership.

    Cost of accessories- Once you buy a car you might feel to do some additional installations to improve its look and functionality. These additions may include upgradation of the existing music system, customisation with new body kits and alloy-wheels, or decoration of the interiors and the rear. The cost of these accessories that you install or buy for your car, will make a component of your car ownership cost.

    Miscellaneous cost- Though this cost is often not taken into consideration by the car owners, the miscellaneous costs unknowingly keep adding on to the budget of the car owner. These type of costs include the toll charges, car parking fees at the office complex, Metro Stations, parking tickets etc. Despite the fact that these expenses are not much, by the end of the year, the car owners end up paying a significant amount of money in the form of such expenses.

    Depreciation cost- Buying a car is not an investment rather it is an asset as the value of a car depreciates over time. Immediately after buying a car when you drive it off the showroom, the car lost 10% of its value right at that very moment. After that with every passing year, the car’s value depreciate with around 30% to 40% depreciation taking place in the first year of purchase itself.

    Fuel cost- During the ownership of a car, one of the basic expenses that the car owner have to bear is that of the fuel. Whether you are owning a petrol or a diesel car, the fuel cost is something that a car owner should budget and include in the budget list right from the beginning. The cost of fuel in India is ever-rising and the cost of diesel and petrol can actually burn a hole in the pocket of the car owner. Only the cost of fuel, especially, the cost of petrol can equal to the EMI payment that you make every month.

    Insurance cost- Car insurance is a mandatory thing that every car owner has to buy in order to secure the car from accidental repairs, thefts, and any other damage caused. At present, the rates of car insurance can be anywhere between 3% to 4% of the booking price of the car. The more the cost of the insurance, higher will be the premiums that an owner has to pay every month for the car insurance. Moreover, with a huge type of car insurances available in the market each offering some additional coverage, the cost of buying a car insurance has become extremely expensive.

    Car financing cost- Car loan has made the dream of every car lover come true. But car loans also comes with monthly EMIs which need to be paid on time without missing. The EMI of a car loan not only include the interest but also part of the original loan amount as calculated by the bank. Usually, banks charge an interest rate ranging between 6% to 14%. So, in total the car owner has to pay a hefty amount in the form of loan EMI.

    Servicing and Maintenance cost- The expenses incurred by maintenance and servicing of a car are among the other costs of car ownership which can’t be avoided. This type of cost comes with the car and as long as you have the car you have to bear this expense. However, the servicing and maintenance cost up to some extent depend on how you use your car. Though modern days car has a strong and sturdy body, they are still prone to accidental damages. If you accidentally damage the body or engine of your car while owning it, the repairing cost will be extremely high.

    In short, the overall maintenance cost of a car turns out to be a substantial amount in one year. There are two types of maintenance cost:

    • Scheduled maintenance- Schedule servicing of your car needs to be done twice in a year. Each visit will cost minimum Rs. 2000 and this will increase with every passing year. As your car grows old, the wear and tear will be more and hence the servicing cost of the car will also increase.
    • Un-scheduled maintenance- Insurance will cover any damage caused due to an accident. But, as your car grows old there will be a lot of wear and tear on your car parts and these damages can actually cost you a bomb sometimes.

    Tax- When you buy a car, you obviously don’t consider the taxes that you have to pay for your car in the long run. But the truth is that the taxes make another very important component of car ownership cost. A good amount of money will go in octroi and RTO tax. These taxes are revised time to time by the government and based on that your expenses might increase or decrease.

    Cost of Ownership of Car in India

    According to the latest reports, the cost of owning cars in India has gone up mainly because of the ever-rising fuel prices. Though the price of the vehicle tags and the spare parts have been reduced by the car manufacturers in the recent past, this hasn't helped in reality because of the rise of the fuel prices. As a result of the increase in the prices of fuels such as petrol and diesel, the cost of ownership has increased compared to the cost of the previous years. The fuel cost accounts more than 85% of the average cost of the vehicle which is comprised of other components such as repair and maintenance cost, tyres replacement etc. The devastating condition of Indian roads also contributes to increase the TOC of a car. The unprecedented growth of traffic also putting extra pressure on the vital car parts resulting in increased damages. As a result, your car spends a good amount of time in garage then road. All these factors playing a vital role in putting pressure on the car owner’s pocket. Moreover, the cost of ownership of a car in India is more for diesel cars compared to petrol cars. You can differentiate TOC between diesel and petrol car based on the following points.

    Some parts of your car are extremely vulnerable to wear and tears are the battery, radiator components, clutch & pressure plate, timing belt, etc. costs low in petrol car compared to that of the diesel cars. The fluid capacity and oil replacement program are also good for the diesel cars.

    How to Calculate the Cost of Ownership of a Car?

    While calculating the cost of owning your car, must remember that the price of the car is one single component of the total expense that you have to spend on your car in the coming years. Your car is an asset which you need to preserve and maintain by investing a good amount of money from your own pocket. So, while buying a car be prepared for all these coming expenses. In short, make the decision of buying a car only if you feel confident about bearing all the future expenses associated with car ownership. Well, the good news is now you can calculate the cost of ownership of your car in just one click. Some authentic and reliable websites have come up with an automated tool to calculate the Total Cost of Ownership of your car effectively. Here is how you can calculate the TOC of your car through this type of tool:

    • First, you need to select brand from the drop-down list
    • Second, you have select the model of your car from the given list
    • Third, again from the drop-down list select variant
    • Now, in the fourth option select your location i.e, your state
    • Last you need to select the average travel of your car per year
    • After putting all info correctly click on calculate button to find the final TCO of your car

    How to use the TOC Calculators?

    These type of automated tools take some of the vital parameters to come up with the final figure of your TCO. First and foremost is the insurance cost of your car followed by fuel cost, then comes the maintenance cost and finally finance + loss in value = TOC. So, with this powerful tool, you can find out the TOC of your car in just a few seconds. Once you know your TOC you can decide your car considering your income and expenses.

    In India car is often considered as a luxury affair owing to the high cost of cars. However, with the passing years, the scenario has changed a lot and car buying is no more a luxury but a necessity for people. More and more car manufacturing companies have come forward and rolled out a plethora of budget-friendly cars that have made it easier for the car buyers to own a car that they desire. However, the cost of ownership of a car is not only limited to the price of the car, but it is made up of several other components.

    Easy Car Loans for Buying Cars

    Not only the auto-making companies but also the banks in a quest to make the car borrowing process easier for the buyers have rolled out a number of car loan offers. In other words, it can be said that the cost of ownership of cars in India has become much affordable with the advent of the car loans. Here are the benefits of opting for car loans to buy your desirable car:

    • Easy and affordable loans with flexible EMIs
    • Low-interest rate on the loans
    • Around 80% to 100% of financing of the car
    • Long loan repayment tenures
    • Easy and minimal documentation process

    To conclude, it can be said that buying a car in India has become extremely easier with a wide variety of budget-friendly cars. Additionally, while buying a car you can also get hold of a number of offers and discounts from the dealers which makes the purchase much easier for you. While there are already a number of cars on the market, and many of them are in the queue to get launched soon, buying a car has become a cakewalk. Ranging from budget-friendly cars to luxury cars like sedans, there are a number of options to choose from. Hence, there are a variety of options for people who are willing to buy new cars at an affordable price range. All the buyer has to do is to calculate the TOC of the car and assess his or her ability to bear the cost in future.

    Customer Reviews

    • Central Bank of India Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience i had with this loan and the loan amount which they had provided has been sufficient. The interest rate with them is quite nominal when compared with the market rate. There has not been any sort of additional charges which they had made so far.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 13, 2019
    • SBI Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I took my car loan in State Bank of India by last year. The charges are normal. I have spend down payment nearly 1L out of 7L. The branch is near to my residence so will never contact the customer service. The process was immediate and it was completed within 2 days.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jan 12, 2019
    • HDFC Bank Car Loan
      "Its Excellent"
      0.5 4.5/5 "Excellent!"
      HDFC gave me the door step service for the car loan. I took the loan before three years. It was the fantastic experience for me because I got the better interest, I took the loan for 5 years but I done the foreclose in three years , there was no charges for it.
      Was this review helpful? 1
      , ahmedabad
      Reviewed on Jan 11, 2019
    • Capital First Car Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The process in getting my Car loan from them has been quite good and the process went smooth. The loan amount was sufficient but the interest rate with them has been quite high when compared with the market rate. Their customer support and their response has been good and has been helpful as well.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jan 10, 2019
    • HDFC Bank Car Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      My car loan experience with HDFC has been good and the loan amount which they had provided has been sufficient. The interest rate with them has been nominal and there has been some charges like processing fee. Overall their has been a help from their customer support as well.
      Was this review helpful? 1
      , pune
      Reviewed on Jan 09, 2019
    • HDFC Bank Car Loan
      "Average Loan Service"
      0.5 3.0/5 "Satisfactory"
      I have approached the bank directly for my car loan. Since I'm existing customer of HDFC for 13 years, i have chosen them. I purchased the loan amount of Rs. 2 lakhs. They have offered me a interest rate of 16% In October 2018, i have closed this loan. Total tenure period of the loan was 3 years. Car Dealer has recommended me about this loan.
      Was this review helpful? 4
      , srikakulam
      Reviewed on Jan 09, 2019
    • Magma Car Loan
      "Average service"
      0.5 1.5/5 "Bad"
      I have been using my car loan with Magma Fincorp previously, they have given me sufficient loan amount ,the rate of interest they have charged me was high,and the processing fee they have charged me was high , i was not happy with there service.
      Was this review helpful? 2
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using my car loan with HDFC bank, there service is too good, the loan amount they have given me was sufficient,the rate of interest they have given me up to 9% which is nominal for me,and the processing fee they have charged me was nominal only they have charged me up to 1% only,and still my loan is running ,there was no hidden charges they have charged apart from that,overall service is good.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Nice offer and nice loan"
      0.5 4.0/5 "Great!"
      I had a car loan with HDFC 1 year back. They have given me a nice offer hence i opted the loan with HDFC. I'm not sure about the partial payment and pre-closure facility. They have given me a nice interest rate according to what i want. I was taken a loan amount of Rs. 3 lakhs.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 08, 2019
    • review Car Loan
      "Need to reduce the charges"
      0.5 3.5/5 "Pretty good"
      I have taken a car loan in Nissan Institution, it was good. I bought the car from same showroom and they have provided me a facility. The rate of interest was high. The documentation procedure was simple. I have taken the loan almost 2 years back and its still running. The loan tenure is 5 years.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Looking for less interest rate"
      0.5 4.0/5 "Great!"
      My car loan experience was good with HDFC bank, loan amount was sufficient and the rate of interest was high when compared to other banks. Customer service was good and they responded on time. The tenure period for this car loan is for 5 years.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 08, 2019
    • ICICI Bank Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with ICICI bank, the rate of interest they have charged me was nominal and they have charged me processing fee they have charged me which was nominal, the loan amount they have given me was sufficient according to the car price i got my loan, still this loan is running,overall service is good.
      Was this review helpful? 2
      , new delhi
      Reviewed on Jan 08, 2019
    • IOB Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with Indian overseas bank, the loan amount they have given me was sufficient, they have charged nominal rate of interest they have charged me up to 9 % which was nominal and there is zero processing fee , so far there service is have experience was good, they have not taken any hidden charges ,there overall service is good.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good loan experience with HDFC"
      0.5 4.0/5 "Great!"
      My car loan running with HDFC bank, the customer service is super and the fast approval on the disbursement. They taken 15 days to deliver the car. The principal amount is Rs. 4 lakhs for the tenure of 5 years, the car model is baleno which is latest.
      Was this review helpful? 1
      , aligarh
      Reviewed on Jan 07, 2019
    • ICICI Bank Car Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      The process in getting this loan was quite good and there hasn't been any hassle faced. The loan amount which they had provided has been sufficient and the interest rate with them has been nominal as well. There has not been any sort of additional charges which was made by them.
      Was this review helpful? 0
      , pune
      Reviewed on Jan 07, 2019
    • Axis Bank Car Loan
      "Good Car Loan"
      0.5 4.0/5 "Great!"
      Purchased my car loan 4 years back. I have chosen the Axis bank because the rate of interest was less when i compared with others. I have taken a loan amount of Rs. 3.50 lakhs and the tenure period for the loan is 5 years. I have been paying the EMI of Rs. 8000. I have got the loan as per they have promised time.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jan 07, 2019
    • Bank of Baroda Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It has been a good experience i had with this loan. The loan amount which they had provided has been sufficient and the interest rate with them has also been nominal, there has not been any sort of additional charges which they had made for this loan.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 07, 2019
    • HDFC Bank Car Loan
      "Average Loan Experience"
      0.5 3.0/5 "Satisfactory"
      I have taken my car loan in 2015 with HDFC. I have purchased the loan amount of Rs. 5 lakhs approximately. I have done a pre-closure. I have completed the loan in 2.5 years There is no pre-closure charges. They have given me a interest rate of 8% and the EMI amount has been deducted from my account automatically.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 07, 2019
    • HDFC Bank Car Loan
      "Interest rates are high"
      0.5 3.0/5 "Satisfactory"
      My car loan was purchased from HDFC Bank in 3 months before. I have purchased a loan amount of Rs. 5.21 lakhs and i have received the loan within a month. They have given me a offer for taking the car loan and there is a lesser documentation for this loan since i have taken loan already with them. I am making the EMI of Rs. 12500
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 07, 2019
    • HDFC Bank Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with HDFC bank for long time , the loan amount they have charged me was sufficient, the rate of interest they have charged me was nominal, and the processing fee they have not charged me it was zero processing fee,overall service was good.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jan 06, 2019
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