Owning car more econmical than hiring cabs

Your have car in your garage and cab aggregators on your mobile. But which is more convenient? Should you use your car or take the cab? Which is more economical? What are the factors you should keep in mind while choosing among options? Lot of people get confused when they buy a car. Maybe you are also facing this dilemma. So let’s look at that in this report.

Let’s make a calculation from 5 years point of view.
For example, you buy a diesel car for Rs 6 lakh. It gives you mileage of 15 km and diesel costs around Rs 90 per lt right now.

Car usage
You will use the car to commute to office and back, use it for regular household shopping etc and social occasions. So let’s assume that you travel about 1,500 kilometers per month, which means that the total cost of driving the car for 5 years will be around Rs 5,4 lakh.
Then comes the maintenance cost, If you drive properly then maintenance cost won’t be more than Rs 25,000 annually. So this way, total expenditure in five years will be Rs 1,25,000.

Insurace exoense
Besides this you will also have to include insurance expenses. If you opt for zero depreciation insurance of Rs 15,000 then total expenditure for 5 years will be Rs 75,000.

After adding all the expenditure, the total comes to Rs 13,40,000.

It is possible that after 5 years you might wish to get a new car. At that time you would sell your old car. Hence considering 20% depreciation every year, then after 5 years the value of your car will depreciate from Rs 6 lakh to Rs 2,60,000. If you sell your old car for that amount then your expenditure on the car will fall from Rs 13,40,000 to Rs 10,80,000. Hence in 5 years, you will spend Rs 10,80,000 on a car.

Hiring cost
Now let us look at expenditure on cabs. Average cab ride right now is around 20 to 22 rupees per km. Prices shoot up during peak hours. So let’s take 22 rupees as the average price. Hence if every month if you travel 1,500 kms then your monthly expenditure will be Rs 33,000.

In five years this will be Rs 19,80,000.

We have not considered inflation rate for next 5 year in both these cases. With rising inflation cab fares as well as costs related to cars like fuel cost, insurance cost and maintenance cost will also increase. Hence we have ignored inflation in both these cases.

From cost point of view, it seems that having personal car is cheaper.

There are some other factors also that can be considered to compare car and cab. Like you have comfort with car but there is parking, maintenence cost. While in cab there is no issue with maintenance and parking but you don’t get comfort of your own car