Buying A New Car in India? - Make Right Budget First - YouTube

Make sure to press the bell icon while subscribing

So that you will get a notification of the latest finance video

Hello, My name is Mukul

And you are welcome to Asset Yogi

Friends, today's video is a bit different

Today we will talk about vehicle

How do we lose so much money while purchasing a vehicle

See, we buy cars for mainly three reasons

The first reason is very simple, to go from point A to point B

You go from office to home, -home to office

Sometimes you have to travel

This is quite a valid reason

The second reason is safety and security

Sometimes we don't depend upon the public transport

Or we don't feel safe

That too is a quite valid reason

The third and a very big reason is that,

In India, we consider a car as a status symbol

Status symbol means, "Keeping Up with the Joneses"

This is an English idiom

If I say this in Hindi,

then you must have heard this in your house or from people that

do you know which car did Bhatia Ji bought?

He is driving Honda City nowadays

Or Rahul enjoys on his father's money

He drives a BMW

Or we say that do you know Sandeep has progressed a lot

Whether he has done it on the job or business

Nowadays, he is driving a Fortuner car

Whatever may be the reason

Sometimes due to this matchup, we end up causing loss to ourselves

And maybe we fail to secure our future

In this video, we will be watching this only

That how much money can we save?

How can we invest money in our future?

It may be possible that you know some of these points already

Some may be new for you

Let's see

Come with me

(Music)

There are four main factors in the car buying decision

Where we lose most of the money

The first point in this is depreciation

We all know that a car is a depreciating asset

As soon as a car leaves the showroom, it gets depreciated by 10 %

And if we talk about 6 months to 1 year, then it gets depreciation by 15 %

In 1 year to 2 years, it is 20 %

In 2 years to 3 years, it is 30 %

In 3 years to 4 years, it is 40 %

In 4 years to 5 years, the half-price remains of the car

If we take an example then assume you have bought a car of 6 lacs Rs

And if in 2 years to 3 years it gets depreciated by 30%

Then the price of the car remains 4 lakhs Rs approximately

Its price decreases by 2 lakhs

Our second point is the interest cost

See in India mostly cars are sold on the loans

So interest cost itself is a very big amount when we buy a car

We will take the same example further

The cost of the car is 6 lakhs Rs

Assume that you have bought it on the loan

We have taken a car loan for that let's say for 5 lakhs

Let's say you have taken a loan for 5 years

I have assumed the interest rate as 11 % per annum

It can be more or less

I am just considering this for approximation

So the total interest rate in 5 years on the loan of 5 lakhs

Is approximately 1.5 lakhs Rs

So if you can avoid this interest cost somehow

Then there will be your savings

And that also can be invested somewhere

The third important part is frequent buying and selling

Many people change their cars every 3 to 4 years

So if you had bought a car and sold it in 3 years

So the depreciation here is 2 lakh Rs

We are taking the same example here

You bought a second car, that too let's say for 6 lakhs Rs

After 3 years, sold it for 4 lakh Rs

One more time you suffered a loss of 2 lakh Rs

And if you keep doing this every 3 years, you will keep losing your 2 lakhs Rs

And you will not get a chance to invest

You could have save this money and invest

but now you won't be able to do that

The fourth important point that I like to say is the fuel point and life of a car

See, every type of engine have a different life

I have included this point due to recent developments

In today's date if I take an example of Delhi

Then the court has banned the diesel vehicle after 10 years

So the useful life of a diesel vehicle is 10 years only

If we talk about petrol and CNG vehicles

Then they can run for 15 years in Delhi

So what do we have to in this is that

We have to calculate cost per year

Let's say we are considering a 6 lakh Rs petrol car

And we are assuming that we will drive it for 15 years

Then our cost per year will be 40 thousand Rs

CNG too let's say if its price is 6.5 lakhs Rs

And you drive it for 15 years

Then also the cost per year is 43 thousand Rs

In the case of diesel vehicles, first thing is that

the same model will come 1 lakh expensive

Approximately it will be expensive by 1 lac

So the cost of a diesel vehicle will be 7 lacs here

Now see the price of petrol and diesel does not differ by much in today's date

4 to 5 years earlier, there was a huge difference

So if the diesel vehicle ran more, then you could cover it up

This difference of 1 lac is covered very quickly

If someone's car is in more running

In today's date, it is very difficult to cover this cost

Let me tell you why

Because see if the car is running for 10 years

Here your per year cost is 40 thousand and

here your per year cost is 70 thousand

You have to cover 30 thousand each year

For that, you have to drive the car very frequently

And even if we see the difference in mileage in petrol and diesel

There is some difference in mileage

There is not much difference in price now

But it is very difficult to bridge the gap of this 30 thousand

So in today's date, petrol and CNG vehicles

are cheaper in comparison to diesel vehicles

In the coming days, when electric vehicles will be popular

Then it may be possible that they will be cheaper

Similarly, we can calculate its cost per year also

Let's say our electric vehicle will run for 15 years

And it's the cost is 6 lac Rs

Then its cost per year will be 40 thousand

Similarly, you can calculate per year cost of a vehicle in your city

Other than this there are also some other important points

That we consider while purchasing a car

The first is your mileage

Petrol vehicles mileage is different and diesel's mileage is different

CNG's mileage is different

You have to consider these also

The second is maintenance

Some cars are low maintenance while some are high maintenance

In some car's service, the cost is 5 thousand

while some car's service cost is 15 thousand Rs

The spare parts of some cars are very expensive

The third is your insurance

Insurance is directly linked to the value of your car

So when you are purchasing a car

And if you are buying an expensive car, then remember

you have to pay more insurance costs for that

So we have talked about the problem areas

And now we will talk about the solutions

The first solution is that you should buy a car with maximum cash

Let's say if you buy a 6 lac Rs car in 100% cash

And from where this cash will come

You will save this

You should buy that car only which you can afford easily

Let's say if you save 100% cash and then buy a car

Then this saves the interest of 1.5 lacs straight

And I am not saying that you should not buy a car on interest or loan

Surely you can buy

But your preferred option should always be cash

And if you cannot do 100 % cash, then try to arrange a maximum cash

If you give 50 % cash and 50 % loan, then also your saving will be 75 thousand Rs

The second solution is of Used car

See maximum depreciation of any car occurs in starting

So if you get a used car in a good condition

Then you can consider it

If we go for used car

So as we have seen that if you get 2 to 3-year-old good condition car

Then it is almost get depreciated by 30%

And we are saving 2 lac Rs straight

Our third solution is that if you are buying a new car then

Use it for the maximum duration

If you buy a new car and let's say it is petrol

And we are buying a 6 lac Rs car

If we drive it for 15 years I.e. its maximum life

Then its maximum cost will be 40 thousand per annum

And if you sell it in 3 years only

Then 2 lac was the depreciation, 2 lac was the cost

And if you divide 2,00,000 by 3 then you will let a cost 67,000 per annum

There is a huge difference

So it is very important that if you are buying a new car

Then use it for a long period

The fourth solution is don't buy a car at all

Now you will say that what kind of solution is this !

Yes!

If your per day running is less let's say your car doesn't run for 20 km in a day

And if I talk about a month so let's say it runs for less than 500 or 1000 km

Then it is possible that you don't need to buy a car at all

There are very good cab services on today's date

You can use Ola and Uber

And if your city has good public transport, if there are metro in your city

If you can use public transport or a cab, and if you do an actual calculation

Then your car's cost let's say include interest cost, car's cost, and maintenance

Then it will be very expensive

Now I am not discussing exact calculations in this video

I will discuss this in coming videos that what is cheaper

a cab or buying a car or in which range it is cheaper for you

So we have seen that in what ways we lose our money

When we buy a car.

And we have talked about some solutions also

Now I will talk about more numbers to you

The solutions which we have discussed

You have saved 2 lakhs on this

If you invest these 2 lacs let's say you invest it for 25 years

Let's say the returns you are getting on the investment

Let's say you are earning returns at 12% per annum

So in 25 years, this figure becomes 34 lacs

You can do the calculation

If you calculate the future value of 2 lac then it is 34 lacs

So this depends upon how much you are saving

If you save only 1 lac and invest it for 25 years

It can become 17 lakhs

And if you can save 4 lakhs

Let's say you were considering a car of 10 lakh Rs

And instead of that, you bought a 6 lacs Rs car

You save 4 lacs and if you invest, it may become 68 lacs

So whenever you buy a car, remember these things in your mind

This video is not for financial planning

Nor it is a car buying guide

My target behind making this video was that

I wanted to highlight some points in front of you

Which you should consider while buying a car

So if you liked this video then make sure to like and share

If you have any suggestions regarding this video our channel

then comment it below

And if you haven't subscribed to the channel yet

Then subscribe and press the bell icon

So that you will get a notification of the latest video

Let's meet in the next informative video

Till then keep learning, keep earning

And be happy as always