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Friday, September 27, 2019

By CarKhabri Team

Hiring V/S Buying: Should You Hire Or Buy A Personal Car?

Hiring V/S Buying: Should You Hire Or Buy A Personal Car?

The regular hike in the prices of all the commodities is making the layman’s dream of buying a personal car quite away from his reach. In-fact, it has also given a birth to the new debate that whether a person should buy a car or prefer to travel in taxi, so that there is no impact on his wallet. Recently, keeping this thing in concern country’s leading news paper Economic Times tried to calculate the difference between the cost of driving a personal car and the expenses incurred on travelling hired from Uber in Delhi.
 
To understand the difference let us assume that you own a Maruti Suzuki Dzire care on an EMI for the period of three years. Along with this to calculate the cost of travelling through personal car or through a taxi, the group just assumed the use of car only for going to the office and did not include the car driven during the weekends and for additional tasks.
 
 
Cost of Having a personal car
 
Price of Maruti Suzuki Dzire: Rs 5.82 lakh (Ex-showroom, Delhi)
Loan cost
Interest rate: 9.5%
Loan term: 3 years
Down payment Rs 58,200 + Loan interest Rs 75,495
 
Total insurance cost (3 years): Rs 60,000
Registration/taxes (3 years): Rs 72,000
Total servicing & maintenance cost (3 years): Rs 30,000
Parking cost & miscellaneous charges (3 years): Rs 50,000
 
Total running cost (3 years)
Monthly distance covered: 1,000 km
Petrol cost: Rs 72.7/lt
Mileage: 22 km/lt
Monthly running cost: Rs 3,304
Total running cost: Rs 1.18 lakh
 
Cost of ownership in 3 years: Rs 9.8 lakh
Total cost of owning in 3 years (with chauffeur): Rs 15.2 lakh (@ Rs 15,000 per month)
Resale value after 3 years: Rs 3.7 lakh
 
Net cost: Rs 6.1 lakh
Rs 11.5 lakh (with chauffeur)
 
COST OF HIRING A CAR (Travel based on an assumption) 
 
Daily total distance covered: 40 km
Daily trips: 2
Time taken in each trip: 50 minutes
Tolls, tax and surge pricing included.
Number of days the car is used in a month: 25 days
Cost of petrol in Delhi on 19 September (actual): Rs 72.7/litre
 
Uber Go
Uber fare is the sum of base fare and charges for time and distance covered during each trip
Base fare: Rs 52.5
Per minute: Rs 1.05
Per km: Rs 7.8
 
1) Without surge pricing (with toll, etc)
Base fare (For two trips in a day) + Time (For two trips of 50 minutes each) + Distance (For 20 km one way, or 40 km in a day) + Toll (Can vary and include tax, surcharge)
 
Rs 105 (Base fare) + Rs 105 (Time) + Rs 315 (Distance) + Rs 50 (Toll) = Rs 575 (Cost per day)
Total cost for 3 years: Rs 5.1 lakh
 
2) With surge pricing (including toll, etc)
[Cost per day x multiplier (which can vary)]
 
575 X 1.5 = Rs 862 (Cost per day)
Total cost for 3 years: Rs 7.7 lakh
 
Conclusion: On the basis of the above assumed calculation, it can be said hiring a cab is a better way to cope with the situation of hiking the cost of car, but at the same time it also has some drawbacks, therefore it can be said that the decision of buying a personal or hiring a taxi depends on your buying efficiency and decision making ability. However, both these options have their personal pros and cos. Where you are able to drive a personal car anytime according to your wish, for travelling in a hired car you have to wait for the cab to reach at your doorsteps. Moreover, having a personal is also beneficial in case an emergency or an urgent moving to some place. On the other side, if you don’t like crawling on the road leaving the clutch system and pressing the break and accelerator in a traffic prone area, then traveling the hired taxi is the best option.
 
Courtesy: Economic Times

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