[princey]

Dear Bhpians

Re: Himachal Pradesh announces 15-year mandatory scrappage | No salvage

The dilemma is : With the new scrappage policy in vogue in the NCR region and suitably being implemented in Himachal and tightening of 15 year extensions in Rajasthan and Harayana, does it make sense to buy an expensive car and loose much resale value over the years owing to a limited lifespan of 10 years for a diesel car and 15 years for a petrol car ?

Having this foreboding thoughts as having recently sold my trusted fortuner am in the market for a suitable upgrade, however market surveys and extensive discussions with dealers have convinced me that second hand value of a new car will deteriorate beyond the 4th year.

So, the dilemma is , does it actually make sense in purchasing an expensive car only to loose much in value over the years and sell it at a considerable loss after 6 or 7 years ?

Of course, here the head rules over the heart !
PS : Was in the market for a new luxury SUV, but dont know now.

[Dr.Abhi]

Scrappage policy is one of the points. Add to it
Evolving emmission norms,
Changing fuel availability like e20 gasoline, biodiesel,
Improving electric vehicles charging speeds,
Availability of better safety equipment like 6 airbags, ADAS with time,
Introduction of new features like ventilated seats, 360 camera with time,
The pace of car evolution is mimicking more like mobile phones where a phone become irrelevant within few years.
So my mantra is
Stay prudent (to your needs and finance)
Stay Simple (no high tech gadgetry/machinery)
Stay relavant (changing emmission/ fuel norms)
Drive Safe (no rash/high speed driving)

[arunphilip]

Originally Posted by princey

So, the dilemma is , does it actually make sense in purchasing an expensive car only to loose much in value over the years and sell it at a considerable loss after 6 or 7 years ?

I look at it this way: I purchase a car for what it offers me through the time I own it; not what it offers me at the time I dispose of it.

To reuse a popular quotation: the journey is greater than the destination.

The journey being the time I spend with the car, the destination being its resale value.

Any resale value that the car offers is something I view as a bonus at the time of sale, not as an integral part of funding my next car.

To offer a different solution: remember that a car takes the biggest hit at the moment you purchase it. So, if you still want to purchase a high-end car, maybe consider a pre-owned option? We have two noteworthy threads on the topic (thread #1, thread #2).

[Shreyans_Jain]

Indian car industry is going through a massive transition. Between ever stricter pollution norms, changing fuel specifications, ethanol blending, electric and hybrid technologies, increasingly complex and expensive maintenance and random end of life rules, the old ways of estimating depreciation and car value may not hold. Diesel car owners in Delhi NCR have already found this out the hard way. As such, financially prudent buyers are well advised to avoid spending big bucks on car purchases for the time being. There is no assurance that you’ll get fair resale value after 7-8 years. In fact, that is highly unlikely. The calculation of total cost of car ownership should take this new reality into account.

[GTO]

As a car enthusiast, there's no price I put on driving pleasure and the happiness that car ownership gives me. Hence, I will continue to buy great cars, regardless of 10 & 15 year bans. But a fun car doesn't necessarily mean an expensive one. I am happy with my 20-lakh rupee Jeep as much as I am with my 6-cylinder German luxury sedan.

You live one life. Buy a car you really want, as long as you can comfortably afford it. Keep driving, stop worrying . After 15 years, you will get neglible resale from any car, be it petrol or EV. I would personally avoid a diesel car if I lived in a city with a 10-year ban as I prefer to keep my cars for long.

[idontdrivedoi]

Financial realities aside, speaking from an enthusiast person, you should personally go for the car which will be fun to drive for you for your particular use case. It doesn't matter what price range it is available at — the Altroz Racer, i20 N Line and so on and so forth come in under a million rupees while you can also be going for a v8 or v12 on the higher end of the spectrum. IMO, running cost per mile/month and the actual paper cost should be way more important than car life and resale value — cars are indeed greatly depreciating assets with notoriously short lives!

[self_driven]

All cars drop is value. The rate and value of this drop is much higher with unpopular and expensive models. The only way to make peace with it is to NOT look at cars as an investment. Cars are an expense for the value they add to our lives. Nothing more, nothing less. If you can afford one now, it doesn't matter whether it makes monetary sense after 10 years or not. Think of the memories and experiences you will have with it for 10 years of your life, a time that will never come back.

Originally Posted by princey

... extensive discussions with dealers have convinced me that second hand value of a new car will deteriorate beyond the 4th year.

Ask the dealer to valuate your new car a day after delivery. You'll realise that depreciation after 4 years is nothing compared to that.

[ajmat]

Originally Posted by princey

D
So, the dilemma is , does it actually make sense in purchasing an expensive car only to loose much in value over the years and sell it at a considerable loss after 6 or 7 years ?

.

I would almost say yes but the asking prices for such secondhand cars do not take account of this reality. The NCR cars are re-registered elsewhere. Until a clear national policy comes out, it will be in a state of flux.

The best scenario would be a higher tax for old diesels. This might keep the more expensive cars but discourage the smaller cars as the cost to change is more attractive.

Originally Posted by Dr.Abhi

.
So my mantra is
Stay prudent (to your needs and finance)
Stay Simple (no high tech gadgetry/machinery)
Stay relavant (changing emmission/ fuel norms)
Drive Safe (no rash/high speed driving)

Wise words but temptation is something else!

Originally Posted by arunphilip

Any resale value that the car offers is something I view as a bonus at the time of sale, not as an integral part of funding my next car.

To offer a different solution: remember that a car takes the biggest hit at the moment you purchase it. So, if you still want to purchase a high-end car, maybe consider a pre-owned option? We have two noteworthy threads on the topic (thread #1, thread #2).

This is my logic also. A new high end car makes sense if company owned to offset tax. One must establish the loss appetite

Originally Posted by GTO

I would personally avoid a diesel car if I lived in a city with a 10-year ban as I prefer to keep my cars for long.

The problem is that most of the more attractive used cars are diesel

Originally Posted by self_driven

All cars drop is value. The rate and value of this drop is much higher with unpopular and expensive models. The only way to make peace with it is to NOT look at cars as an investment.
Ask the dealer to valuate your new car a day after delivery. You'll realise that depreciation after 4 years is nothing compared to that.

Most people do not realise that a used car requiring more maintenance is cheaper than depreciation.

In reality, the government needs a sensible policy which discourages, not bans and focusses on fitness.

[Cresterk]

People in such states should start boycotting new cars and exclusively purchase used cars or just use public transport. Even better if they buy old vans, MUVs etc and start carpooling. See how quickly this ridiculous policy is overturned the moment RTO dues, dealership cartel bribes, fuel revenue, car loans etc dry up in the state.

Rule 1 of dealing with extortion is to never pay up. They want to play the "environmentally conscious" angle, give them environmentally conscious that doesn't conveniently involve putting more money in their pockets.

[Mystic]

What is the life span of a vehicle wrt modern cars? 10 years for petrol and 15 years for diesel makes sense when we look at the huge technology changes we see every 5 years making the car look dated.

Don't buy a car when one doesn't have a reasonable usage. I see many cars decade old with 30000 kms on odometers. Why buy a car? Better lease a car when needed.

More than environment impact for scrapping policy, it is the automobile industry which lobby the Government to make laws so that we keep buying new cars. The same lobby is also responsible to make public transport not be made efficient and effective. Does anyone truly care about the limited resources on this planet and we cannot afford to scrape leaving nothing to posterity. The so called hue and cry about ozone layer hole is self healed during the covid days and is no more a threat now.

On a similar analogy, When we were looking at buying a house overlooking the pacific ocean in San Diego, the realtors were showing us the houses which are more than 100 years old and an average decent house is 3 million. These old houses are in immaculate condition and also are exempted from taxes etc. Why scrape the house and build a new one when it’s serving the purpose and the Government of USA is encouraging people to maintain such houses as historical memories by giving tax exemption.

Similarly to the old houses, I see cars like Rolls Royce or Land Rover can easily last 100 years as they are built like tanks but the cars are only for vintage purpose and not for daily usage and hence general scrapping policies make sense wrt automobiles.

[efgritesh]

Originally Posted by GTO

After 15 years, you will get neglible resale from any car, be it petrol or EV.

Just wondering if EV also needs to be replaced by 15 years rule? I am aware that most EV battery may not last long which is a major component of EV cost, but from pollution perspective a brand new EV vs an 15 year OLD EV wont make any difference, isn't it. Infact it might be a massive net burden to produce a new CAR instead of replacing battery if needed.

[m8002?]

Originally Posted by Mystic

Don't buy a car when one doesn't have a reasonable usage. I see many cars decade old with 30000 kms on odometers. Why buy a car? Better lease a car when needed.

Its not that easy when talking in terms of decades. Things change. For example, a person's current usage would be 500kms per month mandating a petrol but after 2-3 years, would get a new job which needs a 1500kms per month travel. Also, we know how things changed during Covid.

Originally Posted by efgritesh

Just wondering if EV also needs to be replaced by 15 years rule? I am aware that most EV battery may not last long which is a major component of EV cost, but from pollution perspective a brand new EV vs an 15 year OLD EV wont make any difference, isn't it. Infact it might be a massive net burden to produce a new CAR instead of replacing battery if needed.

Great words . But does the govt. (or NGT) understand this?

[saket77]

Originally Posted by Mystic

Don't buy a car when one doesn't have a reasonable usage. I see many cars decade old with 30000 kms on odometers. Why buy a car? Better lease a car when needed.

Difficult to gauge the need on this aspect alone. It is easier to clock kms in bigger cities compared to tier-2 towns. For example, in a tier-2 city, your office can be 5kms away but in a metro or a bigger city, this distance can be many times of that.
Also, the use of car in critical times like in a medical urgency or buying a car for use of (old) parents who cannot take the public transport despite their low travel (which is a qualitative aspect) can be at times a decision making factor of buying a car.

[navinmra]

Originally Posted by efgritesh

Just wondering if EV also needs to be replaced by 15 years rule? I am aware that most EV battery may not last long which is a major component of EV cost, but from pollution perspective a brand new EV vs an 15 year OLD EV wont make any difference, isn't it. Infact it might be a massive net burden to produce a new CAR instead of replacing battery if needed.

There is no scrappage policy on EVs. While buying a pre owned EV appears risky, my own experience of using one for the past year has taught me how to evaluate its health, using everything from charging history to OBD 2 data like SoH, insulation breakdown voltage etc and the usual physical inspection… and since prices are tumbling while tech is evolving, it’s a given that their resale value is zilch so I will not hesitate to take an informed decision and buy a pre owned one!

[navinmra]

Originally Posted by arunphilip

I look at it this way: I purchase a car for what it offers me through the time I own it; not what it offers me at the time I dispose of it.

Glad you said it! I come from the same school of thought. My pre owned Civic was my steed for 12 years. I pampered it and drove it far and wide and didn’t blink an eye before upgrading its halogens to LEDs or its tyres thrice over. Didn’t regret a bit when I finally sold it for a pittance. Same philosophy applies to my recent EV Max purchase last year. I love it for what it delivers to me as long as it is with me ( going by my track record it will be a decade or more )