Owning a car gives you comfort and convenience. On the other hand, hiring a cab is a viable option for those who do not like to drive in heavy traffic and bad road conditions. But ultimately, it all comes down to affordability. The below comparison of the costs between buying a second-hand car and hiring cabs clearly explains why a second-hand car is the most cost-effective option.
Cost of taking a cab
The average cab ride cost in a metro city is Rs 20 per km when you choose a mini cab. Let us assume you travel 1100 km for 22 days in a month. That means you will be spending Rs 22000. In 5 years, it would be Rs 13,20,000. This total cost is without considering the peak hour surge in prices and late-night charges.
Cost of buying a used car
The on-road price of a pre-owned hatchback car in good condition is Rs 4,20,000. Suppose, you make a down payment of Rs 2,00,000 and avail a loan for the remaining amount with an interest rate of 10% p.a for a tenure of five years. The EMI will start at Rs 4674 and the final cost with interest will be Rs 4,20,000+ Rs 60440 = Rs 4,80,440.
Considering the average fuel cost as Rs 90 per litre, and with a fuel economy of 10 km per litre, the total fuel cost for 5 years is Rs. 3,56,400.
Let us assume the cost of insurance is Rs 30,000, the average maintenance cost is Rs. 60,000, and miscellaneous expenses (parking and cleaning) are Rs. 50,000 over the next five years.
The total cost of owning a used car = Cost of the used car + insurance + fuel cost + maintenance cost + misc. expenses =Rs. 9,76,840.
Resale value after five years provided that it is in good condition is Rs. 2,29,000.
So, the cost of ownership of a used car is Rs 7,47,840.
From the above comparison, it is evident that buying a second-hand car is cheaper than traveling in cabs on a day-to-day basis.
CARS24 offers a great choice of thoroughly inspected pre-owned cars. Book online and get your car conveniently delivered at home or you can pick it up from the nearest CARS24 Hub. When buying a second-hand car from CARS24, you also get the following benefits.
- Test-own the car
All cars come with a 7-day trial that means you get to test own the car for seven days. You can return the car for a full refund within seven days if you are not satisfied.
- Warranty
CARS24 offers a free comprehensive 6-months warranty on the purchase of any used car.
- Low interest and flexible EMIs
A quick and convenient process is in place for potential car buyers. With the lowest EMIs and choice of flexible tenures, you can get your dream car.
- Hassle-free RC transfer
The entire ownership transfer process is taken care of by Cars24.
