Why car ownership in India goes beyond one-time showroom splurge
What's the story
Dreaming of owning a car? Think it's all about that glossy new ride and the freedom of the open road? Think again!
In India, car ownership goes far beyond the one-time showroom splurge.
From insurance premiums and fuel guzzling to sneaky maintenance charges, your wallet could be in for a bumpy ride. Understanding these hidden costs is crucial for smart financial planning.
So, buckle up! Let's navigate the real expenses of owning a car in India.
Tip 1
Factor in insurance costs
In India, while car insurance is compulsory, the cost of insurance depends on several factors, including the car's make, model, and age, as well as the owner's driving history.
On average, annual insurance premiums for standard vehicles can range from ₹5,000 to ₹20,000.
Choosing comprehensive coverage that includes theft and damage from natural calamities can raise premiums but offers wider protection.
Tip 2
Regular maintenance is key
Regular maintenance is key to keeping your car running smoothly and avoiding expensive repairs later on.
While the average service cost for most cars ranges from ₹3,000 to ₹10,000 per year, luxury car owners should anticipate significantly higher expenses.
It's a good idea to budget a specific amount each month for potential maintenance needs.
Tip 3
Fuel efficiency matters
Fuel is one of the most significant ongoing costs for car owners. By selecting a fuel-efficient vehicle, you can save a substantial amount of money over time.
For example, cars with better mileage i.e., 20 km/liter as opposed to 15 km/liter can potentially save you around ₹30,000 per year just on fuel costs (considering an average driving distance of 15,000 km/year).
Tip 4
Budgeting for depreciation
Cars lose their value FAST! A brand-new car drops about 20% in the first year and another 10% every year after that.
When planning your car budget or assessing its long-term cost-effectiveness, keep this depreciation rate in mind, particularly if you intend to sell or upgrade your vehicle within five years.
Tip 5
Plan for parking and toll expenses
Parking fees and toll charges are frequently forgotten when considering the cost of car ownership.
In cities, parking fees can accumulate rapidly, with public spaces charging ₹50 daily and residential complexes demanding ₹1,500 monthly for a reserved spot.
Toll charges differ depending on your routes, but planning long trips without factoring in these costs can result in unpleasant surprises.