Car buying habits to drastically change with new environment norms
The future is now. It takes a blanket ban on diesel vehicles more than 10 years old by the hitherto little-known National Green Tribunal to make car owners sit up and think about the future. Off the cuff, three things are going to happen – car ownership will become very, very expensive; resale value of petrol and diesel cars will plummet; new green technologies will be fast-tracked.
The National Green Tribunal may have put the decision to ban all diesel vehicles more than 10 years old in the national capital on hold for two weeks, because of truckers threatening a strike, but let’s face it, one way or the other, it has a valid point about environmental pollution and hence the need for drastic steps.
What is definitely going to happen:
- No vehicle over 15 years of age, either petrol or diesel would be allowed to ply in the national capital (and possibly in other metros soon)
- Diesel fuel prices and diesel car prices will increase further
- A scrapping policy would be formulated where vehicles over 15 years of age will either be scrapped or possibly resold in small towns
- Resale value of any car more than 10 years old will plunge to next to nothing
- Buying and registering a second car in your name will be very expensive because of additional charges and taxes
- Euro V and Euro VI emission norms for all vehicles will be advanced (2020 for Euro VI instead of 2023)
- Some new-generation diesel particle filters may appear as retrofits for Euro III and Euro IV cars, as will stringent mandatory pollution checks and certification
- Subsidies for hybrids and electric cars will appear to motivate people to switch to cleaner cars. More electric car choices likely to materialize
- Parking costs will sky rocket
- More people will consider using public transport or car pooling
- Infrastructure projects like ring roads and bypasses will get a boost as the government looks to divert heavy vehicle traffic not destined for a city
What does this mean for you, the car buyer?
Owning a car is going to go back to being a luxury rather than a necessity or convenience, because the cost of ownership of a car will go up. With increasing congestion charges, parking charges, taxes and tolls, most buyers would reconsider purchase decisions – probably having to choose from a segment lower than they intended to buy.
If you already own a car that is about 10 years of age and plan to sell it now, your resale price will be much lower than what it was just a couple of months ago. You probably would have slightly better luck trying to sell your car outside of the metros. Resale value will taper off quite dramatically once a car crosses five years of age, bottoming out at 10 years.
New diesel cars are likely to cost more (there is probably a window of opportunity for some buyers here over the next few weeks to get diesel cars cheaper) as the government is planning on bringing in additional taxes. Prepare to pay more for parking as well at most places.
If you are planning to buy a car, do keep in mind its green quotient. Avoid buying a used diesel vehicle if you intend to keep it long-term, as its active life would be drastically reduced by the new emission norms. Buy a diesel vehicle only if you really see the financial benefits of it – if you drive over 1,500 km a month. See: Are half the buyers of diesel cars making a mistake?
The debate is still on with the transporters association and automobile lobby on one side and the NGT and government on the other. Whatever the outcome, one thing is for sure – car buying is going to be a significantly more expensive decision any which way.