Could a car cost actually cost you double its on-road price? This is a very interesting question that not a lot of people think about. Labourlawadvisor explains the intricacies involved in buying a new car and the cost of ownership associated with it for quite some time. He takes into account the costs involved at the time of purchase along with fuel prices for driving the car 1,00,000 km. Many of us actually drive our cars for that long. Hence, it makes sense to calculate these costs well in advance to get a rough idea of how much you will be spending for that period of time. He explains this by taking an example of a car that will cost you Rs 15 lakh, on-road. Read this post carefully to figure out how much will you actually spend if you are buying a car worth Rs 15 lakh.
Also read: How To Reduce Excessive Fuel Consumption?
Does A Car Cost Double Its On-Road Price?
He informs the viewers that in order to buy a car worth Rs 15 lakh, one has to first earn around Rs 21.50 lakh. After paying around 30% tax on that amount, you can put aside the amount to cover the cost of your car. In addition to this, you will have to shell out a large chunk of that Rs 15 lakh on various kinds of taxes, like Road Tax, GST, Excise, Registration, etc. This could amount to around a whopping Rs 5 lakh. Thereafter, you bring home the new car. Supposing you have driven your car for 1,00,000 km. If it is a petrol car, you can get a mileage of around 15 km/l, which is a decent figure. The prices of petrol are currently Rs 105+ per litre in most cities. This amounts to around Rs 6.50 lakh. This is a crazy sum of money when you think about it.
What is even more interesting with this calculation is that he doesn’t take into consideration any maintenance, spare parts and servicing costs. This is certainly not possible that you won’t need any spare parts or services to run your car over 1,00,000 km. If we were to add that amount to this calculation too, the total sum easily crosses twice the amount of the on-road price of your car. Now, while most of us don’t think about all these things when we buy a new car, it must be done in order to plan our finances better.