You really believed when the manufacturer said that after buying the car, you don’t have to pay for anything except fuel for the next three years or so? Well it isn’t even remotely true as there are a lot of costs associated with a car. These costs are lot more than just the monthly instalment you pay on the car. It is just a small part of the total cost as the car loses its value over time. We list here the costs that you should be ready to bear with a new car.
Well this was an obvious one. You would have to bear the cost of fuel that you use up in driving around your car. Earlier the difference between cost of petrol and diesel used to be huge which made running diesel cars cheaper to run. They are still cheaper to run but as the initial costs are higher, you have to calculate the long term cost to find out which one is cheaper for you. Petrol cars are costlier in terms of fuel but if you don’t drive much, they might be the sensible option for you.
If you get a loan to get your new car, you don’t just pay back the cost but you also pay the interest on that amount. While it appears to be a small amount added to the EMI of the product, you end up paying a lot of money over the price of your car.
The taxes that are levied on cars are also steep. If you have got a SUV or sedan, the taxes are even steep. Taxes like octroi and RTO are added on top of the cost of the car. These taxes alone add up to a good amount in some areas.
This is another cost that you would have to bear if you own a vehicle. It is the costliest when you get a new car as the value is highest. The insurance costs go down with time as the value of your car depreciates. The cost of insurance is around 3-4 % of its book value.
This is one huge cost associated with owning a car. As a car grows older, it loses its value. The value of a car goes down by almost 10 percent as soon as you drive it home from the showroom. In the first year itself, the value goes down by over 30 percent which is quite a lot. It is an exponential flow downwards so the drop in value reduces with time and floats at a constant value.
Everyone loves to accessorize their car and you know that they don’t come cheap. People go for extras like high end music systems, cosmetic elements like kits, wheels and other elements. Even a decent music can easily cost over 30-40K. It is the same story with other accessories as well and they will all end up adding to the overall ownership cost of the vehicle.
Different manufacturers set different durations and distances for regular service of the car. These services aren’t exactly cheap and the costs go up with the cost of vehicle. The general trend seen here is that the service costs are lower for Japanese and Indian manufacturers while the Germans turn out to be costly. Though you would notice that the service intervals are higher for German cars. These costs are also determined by the cost of parts that are used which are generally lower for popular manufacturers. Apart from the usual maintenance, your car might require repairs that aren’t scheduled. Sometimes they can turn out to be pretty costly. Damages to your car are also quite costly to repair.