How to buy a car? The whole process can be a little challenging, with many questions arising in the process. CarToq Expert Siddhartha Mishra puts together the entire process in a linear and comprehensive manner.
1. Buying a Car: Are you sure?
The current economic scenario has perhaps corrected this to some extent, but it is still true that many car purchases are superfluous. So with a little bit of management, one can probably avoid buying that second or third (or even the first!) car. Ask yourself if you really need one or are there alternatives?
2. Can you afford a new car?
You have to do a very realistic budgeting when you buy a new car. I drive a diesel-powered car which has cost me Rs 2.12 per km over the last four years in just fuel. The total running cost itself has been almost Rs 4.40 per km including maintenance and accident repair. But, do you know what the car has cost me over the past four years when I add the on-road price, the loan interest and deduct the expected current resale value from it? It is Rs 9.10 per km! If this calculation for your vehicle gives you an unrealistic figure, either reduce your budget or buy a used car.
3. Should you retain the old car or buy a new one?
There is a prevalent belief that cars can get troublesome and maintenance-intensive around the fifth year of ownership. It is true that they do require a little more maintenance and care once they age. A car loses almost 50% of its original value in around 5 years (more for faster depreciating cars and less for slower depreciating ones: if you own a Maruti, Hyundai, Honda or Toyota, it will be less than 50%, but brands like Fiat and Mitsubishi depreciate faster). However, most cars still retain 20% of their original value after ten years. Simply speaking, you have already taken a huge depreciation hit in the first five years of ownership. Every year that you hold on to your car after the first five will only help to lessen your losses.
Most modern vehicles can easily last over 200,000 km. If you drive an average of 54 km every day of the life of your car, you will still be under that figure after ten years. There will be parts replacements and suspension overhauls and many other things to repair and replace but the major costs like engine overhauls will not be required provided you do not abuse the car.
4. How much financing?
When you decide to buy a car, look at how much of its price you want to get as a loan. One can easily rake up 50% of the cost of the car by doing some financial jugglery. For an asset that loses some 20% of its value every year, financing it at the rate of 11% – 13% makes absolutely no sense. So, the best thing to do with a car loan is not have it at all. Of course, financing a car, allows you to still have some liquid cash in the bank for other expenses. I believe the only loan that makes sense is a home loan or one taken for business purposes.
5. Researching a car
Now that you’ve decided you want to buy a car and you have a budget in mind, it is time to do what we love doing nowadays—research. The Internet and magazines offer plenty of scope for research. But all reviews that you read have a human element to it, and despite what others say about a car, it’s always best for you to judge it yourself. Sites like CarToq.com will also help you get opinions from other owners of a particular car model.
6. Fix your body style
One should always get over with the sedan, hatchback, MUV or SUV debate first. Crossovers (cars that try to bridge the gap between two body styles) have now made it more complicated. Essentially the ideal car in a country like India is one with the space and seating capacity of a van, the ability to take bad roads in sheer comfort like an SUV, the driving dynamics of a sedan, the parking ease of a hatchback, the “get out of my way” menace factor of a powerful mini-truck. Along with this, we Indians now want sophisticated interiors, amazing fuel efficiency, lots of features and all this at a fantastic price. Such a “perfect” car does not exist, but manufacturers have not given up trying.
Here are four things to consider when choosing a body style:
Image: If you have image issues with a body style, consider that factor.
Dimensions: What body style you choose will determine how easy it is for you to take your vehicle through the by-lanes in congested cities and how easy it is to park within a given space.
Price: You won’t get an SUV at the price of a hatchback, but check if you are comfortable with the price of your car of choice.
Fuel Efficiency: What amount of fuel economy would you be comfortable with? Getting 7.6 km per litre of diesel from an SUV or 20 km per litre of diesel in a hatchback?
7. Petrol or Diesel (or CNG or AutoLPG) fuel choice
After deciding on a body style, what fuel do you want?
CNG and AutoLPG engines are essentially petrol engines which use gas instead of liquid fuel. Just check local availability, price and service support for vehicles running on these fuels before buying. Also, check for all legal compliances and RTO endorsements for these fuels. Do not go for conversion kits unless you really know what it is all about. Buy factory-fitted AutoLPG / CNG powered cars, as far as possible.
For hatchbacks and sedans, the choice is between diesel, petrol or CNG/AutoLPG. For everything else, stick to diesel (there are a few petrol SUVs around, but they can be terribly thirsty and expensive to run, especially with the current difference in prices of petrol and diesel). Diesel engines are inherently more efficient than their petrol counterparts, and they are the best choice for bigger engines.
Due to the subsidized prices of diesel in this country, manufacturers ask for a huge premium on diesel cars. That part of the calculation needs to be done carefully to check the time in which you will recover the additional purchase cost on a diesel car. Diesel engines also demand a little more in terms of maintenance (primarily the Rs 2,000-odd for the fuel filter to be changed every 15,000-20,000 km) but it is a misconception that diesel engines are much more expensive to maintain.
8. The “Kitna Deti Hai?” question.
The first step to get excellent fuel efficiency is to look at the weight (and thus, body style) of your vehicle. A lighter vehicle will be more fuel efficient: simple. The other thing about fuel efficiency is that all cars of the same segment are almost within 10-20% of each other in fuel efficiency. Don’t go by the ARAI figures alone, as you won’t achieve them unless you drive in the same conditions as they do. Also read: Hypermiling techniques.
A note for frequent highway users: Always go for a more powerful car if you intend to do long distances at high speeds (say beyond 90-100 kph). Because the fuel efficiency of most small engines drops substantially when driven at higher speeds whereas that of the more powerful engine will remain more or less consistent.
9. Safety and features
These days safety is an important consideration. Buy a car with ABS and front airbags, at least. Cars offer a host of features these days all competing with one another such as parking sensors, Bluetooth, power mirrors etc. A word of caution is not to get taken in by a lot of marketing talk on features. It’s great to have more features, but consider their utility first. In the end, it’s a personal choice. Also read: 7 stupid features cars offer.
10. Maintenance and quality
There are two aspects to maintenance. The first is routine maintenance and the second is parts failures / replacements and major repairs (which includes accident repairs). Routine maintenance costs are easy to figure out since all you need is a price list of labour for each service and consumables and regular usage parts like oil filter, air filter, fuel filter, clutch kit, AC filter, timing chain, brake pads, etc.
Sadly, a car is a mechanical object which will be subjected to a lot of different conditions, so please keep in mind that things will go wrong, in other words, non-routine maintenance. Once your car is out of warranty, these costs can be quite steep. It is good to know the costs of things like AC compressors, alternators, injectors, brake discs, belts, radiators, ECU, suspension components, etc. Then, there is the question of “mother and child” parts. In case of failure, does the company replace only the malfunctioning component or does it replace the entire assembly? In the long run, sometimes, the car with higher non-routine maintenance parts costs is cheaper to own than one with the lower costs for the same.
The reason for this is “quality”. Quality of vehicles can be judged in two ways: the quality of design and engineering, which determines how well the car performs, and quality of components, which determines the reliability and longevity of the car. The first part will tell you how well the car performs when new, the second will tell you how close will its performance be to that of a new car after, say, 8 years, and how much have you spent in keeping it that way.
Another aspect of quality is how good the after-sales support is. It is good to know the competence of the Service Centres as well their standards of service and pro-activity. Also check for availability of parts in case you end up choosing a model which is either very low in sales or which is at the end of its life cycle. Maintenance of such vehicles can become a problem a few years down the line.
But remember, at the end of the day, for a non-enthusiast, most cars in a certain price bracket differ from each other only by 20-25% at most in all parameters. So take an informed decision, and make your purchase. Happy Driving!
If you have any more tips on the buying process of a car, please do share them with us.