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Old 5th November 2019, 11:21   #1
GTO
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Default How a more expensive car can work out cheaper (if you hold onto it for longer)

Disclaimer: This thought-process is entirely based on you retaining the better / more expensive car for a longer period than a “regular” car. But if you still want to change your car every 5 years, this thread isn’t for you.

Ever wondered how & why I keep my cars for so long? It’s simple = I buy the better car, even if it’s more expensive at the start, but retain it for 9 – 10 years (it's very EASY to hold onto a top-class car for longer). Yes, this might work out costlier initially, yet it's cheaper in the longer run. Why so? Read this thread - Depreciation - The Silent Killer (Resale Value - The Silent Killer).

Thread summary: Buy a 'great' car and use it for 8 – 10 years instead of buying 'good' cars & replacing them every 5 years.

Point #1
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Let me start the thread off with an example. Someone I know got a Swift in 2009, then bought a City in 2014 and finally a Creta in 2017 (which he drives now). That is a COLOSSAL WASTE of money in my eyes. He’s taken a massive depreciation hit each time he sold his perfectly-working 5 year old Swift & 3-year old City. Related thread = Keep, upgrade or sell your 5-year old car?. If he were to ask me for a recommendation, I’d have told him to buy a City in 2009 itself! Sure, it would have cost a lot more than the Swift, but in the long run, it would be substantially cheaper than what he did.

Point #2
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I’ll give you another example. Let’s say you are planning to buy a WagonR today, and at the back of your head have already thought about a Compact SUV 4 – 5 years down the line. Well, I will tell you to get that Compact SUV instead. Wait if you have to (to accumulate more funds), but it’ll be cheaper than spending 5.5 lakhs on a WagonR today, selling it for 3.25 lakhs in 2024 and buying a 10-lakh rupee Compact SUV then. What’ll work out cheaper for you is spending 4.5 lakhs more on the Compact SUV today and holding onto it for long (I personally prefer keeping my cars for 8 – 10 years). Do the math – it’s very simple and will blow your mind. If you are considering a Maruti Dzire for 10 lakhs today and have a feeling you’ll buy a 16-lakh City after 5 years, I’m going to advise you to buy that City instead. If your financial situation is secure and you are absolutely sure of keeping the car long term, take a longer loan duration (if need be)...but whatever the case, keeping the City longer on a 6 year loan will be cheaper than replacing your Dzire after 4 - 5 years.

Point #3
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Added bonus of the above = You’ll be driving a superior car for 8 – 10 years (Compact SUV instead of a WagonR, or a City instead of a Dzire). It’ll inevitably be safer, faster, of higher quality, more spacious, a better handler etc. The real question is = would you rather drive two good cars over 8 - 10 years, or one GREAT car over the same duration?

Point #4
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If you buy a superior car today, I can guarantee that you'll keep it for longer. All other factors being the same, you will find it far easier to retain a superb car for 8 – 10 years (versus an ordinary / mediocre car). You know why I happily kept my Civic till she was 8 years old? Because even in 2015, that ‘07 Civic wasn’t outdated at all. In terms of space, power, quality & safety, it met the (then) current crop of cars. My 530d is 6 years old today. Guess what? She is still pretty damn competent, even by today’s standards or if you compare it to the new G30. I’m going to keep her till she is 10 years old, minimum. Take a look at the picture above = a car like the Compass 2.0 Diesel is a keeper for 10 years…the Jeep won’t feel outdated or boring even in 2029.

Point #5
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For you to hold onto the car longer, it’s a MUST to buy sensibly and select the right model. Consider the Jetta = Is there any D-segment sedan even today that’s better than this VW? Not in my books. That’s probably the reason Jetta owners are happily retaining their 7 & 8 year old cars (my brother is one of them). The Creta is another example – it might be 4 years old, but it’s still competent by current standards. I don’t think any Creta owner will find his car to be outdated. Again, be sure to choose the right model that will stay relevant for a long time.

Point #6
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Ask me and I’ll keep going on & on. I know many 3rd-gen City owners (including so many BHPians) who didn't feel the need to “upgrade” to the 4th-gen City which offered little more than gizmos, in the name of improvements. However, if they'd bought a Dzire then (instead of the 3rd-gen City), they'd probably want to upgrade. Guess who saved money in the long run? The one who bought a City and owned it for a long time (versus the dude who bought a Dzire, and then a 4th-gen City)?

Point #7
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Know what else is cool? 7 years down the line, your car will be better maintained too. How’s that? It’s basic human nature. What do you take more care of, from your cupboard? The 600-rupee shirt or the 2,000-rupee one? Fact = the best solution to stop losing cheap 20-rupee Cello pens is to buy a 1000-rupee Cross. Not to forget, a car from a higher segment will usually be built to finer standards + with better quality parts, which means that it'll age slower & last longer. If your car ages well, you will happily retain it for more years.

Point #8
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A superior car will also lead to nicer memories because it'll make every drive, outing & holiday that much more special. As BHPians, the drive is as important to us as the destination. Cars are anyway such a fantastic passion to have (unlike alcohol / smoking / gambling etc), so go out and splurge a little bit more .

Point #9
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Don’t have the budget for that nicer car right now? Here’s my advice = retain your current car for longer, so your budget increases. Each additional year that you drive your current car, you are saving big bucks & increasing the available funds for your next car. Wait for 2 years or 3 if you have to, save up and increase your budget, but buy a GREAT car! Linking to this MUST-READ thread again Keep, upgrade or sell your 5-year old car?.

Point #10
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You’ll also be EMI-free for a longer time. Buy a superior car today and enjoy the additional 5 years of an EMI free life (e.g. years 6 - 10 when you would have otherwise bought a new car). You’ll be out of the vicious EMI circle, considering you'd have paid off your loan in the 3 - 6 year period & are holding onto your "nicer than expected car" for longer. Compare this to upgrading cars every 3 - 5 years and continuously paying car EMIs.

Point #11
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A compelling reason to buy a better car today is the changing landscape = downsized engines, shrinking variety of powerful diesels, increasing reliance on electronics, strict emission norms, electric cars etc. are coming our way! Go out and get a sexy mechanically-pure car while you still can.

Point #12
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Goes without saying that if you buy a superior car, you'll get higher resale too. Of course, it certainly won’t be enough to cover the entire $$$ difference between a WagonR and that Compact SUV, but it will partially offset the premium for sure.

Point #13
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Buy a nice car, keep it for 10 years and you can spend the money / EMIs saved on lifestyle enhancing stuff like doing up your house, electronics, going out more, holidays etc. (this is money you'd otherwise have spent on changing your car at the 5 year mark). My ride is now 6 years old and I intend to hold it for another 4 years, which means I have no automotive down payment or EMI to worry about.

P.S. Want to have your cake & eat it too? That is, a superior model but at the same price? Buy a sweet pre-worshipped car instead - be sure to read our lateral upgrades thread (ARTICLE: The Beauty of Lateral Upgrades (Getting MORE CAR for LESS $$$))! I'm addicted to picking up 1 - 2 year old "like new" cars for 30 - 40% off their original price (examples 1 & 2).

Last edited by GTO : 6th November 2019 at 08:25.
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Old 5th November 2019, 11:39   #2
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Have to agree especially no. 4 as i experienced the same first time. Its been 8+ years and 1 lac km+ with my Santa Fe and thats a first for my dad or myself. I simply do not find a better clear alternative even now. The likes of Kodiaq/Endy now cost 35-40+ compared to 26 i paid then and except for features they are not a big improvement. To get a proper upgrade have to choose one of the germans costing a lot more which i probably am not ready for yet.

Also, as you say in no. 11 probably will be the reason I might buy one before BS6 hits than have to make do with smaller engines for same/higher prices.

Last edited by AnandB : 5th November 2019 at 11:52.
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Old 5th November 2019, 11:39   #3
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Absolutely agreed! Better to take a hit earlier rather than waiting & still taking a larger hit in future due to cost, tax increases etc.

Another big point - we buy a cheaper (by money I mean) car today & wait for 5 more years to buy the real dream car. When one finally buys it - he/she is already older by 5 years. 5 good years of younger life that could have been enjoyed with a better car, were spent on a compromise instead.

As we grow older, the question of "do I really need it?" starts to creep in & the bigger/costlier car may start appearing unnecessary. This is first hand experience & that's how my long held dream of owning a Safari got permanently shelved couple of months back.
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Old 5th November 2019, 11:39   #4
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

I Absolutely agree with your views GTO. I own a Generation 3 Honda City that will turn 10 Years in JANUARY 2020. I have absolutely no intention of selling it. The more i use it the more i love it. Way back in 2010 when i purchased it for about 9.5 lacs, my actual budget was for a cheaper dzire or a swift. I am now so glad for not having picked those. I wouldn't have been able to keep those for 10 long years.

Gen 3 City is one heck of a vehicle and can be easily maintained well for a long time. Will surely have tears letting this one go whenever the time comes.
Posting a couple of pictures we had taken last month of my car that i have handy.
Attached Images
  

Last edited by manishkapadia : 5th November 2019 at 11:46.
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Old 5th November 2019, 11:51   #5
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

This thread is right on time, I say! Have been looking to "upgrade" my 2012 Jetta , but unless I spend a good deal more (like 40L+), there is no car that even comes close to what the Jetta offers (I am not talking about features here). Infact my wife prefers the jetta over the 3 series because its more spacious, rides better, trunk is humongous and its nearly as powerful (since its remapped ). Not a single rattle in 7 years and the car is built like a tank. Sometimes I feel I should have gone for the DSG highline, but after remap, the manual is more fun! I am planning to keep it for another 5 years considering it has run only 40K. The parts that have been changed over 7 years are the water pump, battery (lasted 5 years luckily), tyres, wiper blades and 2 door latches. And I get it serviced at a FNG and costs me about 10-12K every year.
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Old 5th November 2019, 12:00   #6
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Guilty as charged!

I am one who has gone through 15 cars in the past 7 and half years. And the result? I still regret selling off my 2012 City for “upgrading” to the 2014 City. In terms of quality, it was a downgrade. One sell led to another, and now, thinking back, maybe our initially purchased 2012 cars - the City iVTEC & the Ritz DDiS - should have still been with us today.

Depreciation hits were definitely there - to the tune of 2.5 - 4 lakhs. Add them up and it’s a substantial sum. Today’s equivalent to buying a 2000 sq.ft. plot in a Tier-3 city!

I am keeping my existing cars for at least 7-8 years. A lesson I have learnt the hard way.

My advice - ignore the “itch” the best you can till your current steed is faithfully serving you. Trust me, it is one very “costly” itch!

Thank you, GTO.

Last edited by RavenAvi : 5th November 2019 at 12:09. Reason: Added.
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Old 5th November 2019, 12:09   #7
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Quote:
Originally Posted by GTO View Post
I buy the better car, even if it’s more expensive at the start, but retain it for 9 – 10 years it's very EASY to hold onto a top-class car for longer. Yes, this might work out costlier initially, yet it's cheaper in the longer run.
Completely agree on this and while doing that, I feel it is always better to get one of the top variants of whatever car you are buying so that the itch to upgrade doesn't get to you anytime soon.

I have seen so many people buy the base variant and then sell that car within a few years because they got bored of the car due to the bare bones feature list. With every new launch, manufacturers keep adding features and when such cars are out on the road, the person with a base variant will most of the times admire the new cars and think of selling his car for the want of additional features. This could have been prevented had the person bought the higher spec variant in the first place.

If money is the problem, then like sir has mentioned in his post, it's better to wait for sometime rather than buy a 'yeh chalega abhi ke liye' variant.

Quote:
Originally Posted by RavenAvi View Post
I still regret selling off my 2012 City for “upgrading” to the 2014 City. In terms of quality, it was a downgrade.
Quote:
Originally Posted by manishkapadia View Post
Gen 3 City is one heck of a vehicle and can be easily maintained well for a long time.
Even I have a 3rd gen facelifted City and just can't let that car go. It is may not have all the features of the 4th gen but it is for sure the better of the two. I have the 4th gen facelift as well and I'm pretty sure it won't age as gracefully as my 3rd gen, that's the reason why a lot of people are not selling their 3rd gen Citys.

Here's a picture of my car that will soon turn 8.
How a more expensive car can work out cheaper (if you hold onto it for longer)-si_20191105_121713.jpg

Last edited by OSH : 5th November 2019 at 12:38.
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Old 5th November 2019, 12:29   #8
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

I have made the mistake of changing cars till 3 years ago, mostly due to the mistake I committed by not buying the right vehicle the first time. But three years ago I was able to buy a vehicle that fit my specific needs and although I am tempted by the EV scene I have decided to hold on to this one for as long as possible and by that time the EV scene should also mature. Vehicles are not mobile phones and they do not need to be upgraded so often. Upgrading the mobilephone each year is also a huge waste. Some may have the peer pressure to upgrade but try to resist it. If someone has the itch for a constant change buy an upgrade friendly vehicle and every year or so you can keep adding something to it to keep up the interest levels and enjoy low premiums and zero EMI.

Apart from that, when buying new do not buy a close to EOL vehicle unless you get a big huge discount on it and the new gen is priced way too high and out of budget. Personally I know of two people who did this and one of them sold and bought the newer model within an year. Other person still drives the old gen vehicle and says he should have listened to me when i asked him to wait for newer model.
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Old 5th November 2019, 12:30   #9
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Absolutely agree with you, GTO! Take my cars for example, a used Maruti 800 for 12 years and a new WagonR for 17.5 years were cars that I owned. I now own a 12-year old Fiesta 1.6 sxi that I plan to keep for long.

I'd splurged when I bought the Fiesta for 8.35 lakhs in 2007, and even ended up taking a personal loan of 1 lakh to make up for some deficit. End result, I am gleaming with glory each time I take the car out.

May I ask why you've put an outer limit of 10 years? I've been using mine way above that limit. My son's friend who bought my Waggie a few months ago is very happy with it and finds it extremely reliable. It is now 18.3 years old.
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Old 5th November 2019, 12:48   #10
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

A truly eye opening and wonderful thread GTO. Truly appreciated.

Completely agree with you regarding the Jetta. My dad bought it in 2012 and till now it has run flawlessly for almost 1.10 lakh kms. Even today there are no rattles or squeaks. We are planning to keep it for at least one more year.

Another car I bought in 2017 was the Hexa. Another keeper for sure. I don't think even 5 years down the line any 20 lakh SUV will come close to the sheer comfort and ruggedness provided by the Hexa.

Thanks once again and keep coming up with more such wonderful threads.
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Old 5th November 2019, 12:52   #11
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

2006 - 4.05 lacs for a WagonR that has clocked over 250,000 Km now
2013 - 10.26 lacs for an Ertiga that has clocked over 180,000 Km now

Both of them continue to serve well. Simple mechanicals and fuss free ownership till date. What I do believe is in spending right at the right time so you don't have to spend a fortune over incidental expenses! I spend less than 12K for renewing comprehensive insurance for both these cars together.

The WagonR had a reason to get a big brother due to space constraints and overall highway capabilities. The Ertiga addressed this and continues to do its job and keep the passengers happy. I need a very strong reason to upgrade (I don't even get that itch). I also know that the resale for both the cars after clocking so many Km won't be great but it won't be too bad either and most of my family drives in the Ertiga worked out cheaper than a flight or an AC Bus fare including wear and tear expenses.

If I buy the next one, It has to be something that will serve me well for at least a decade and not 3-5 years and I know what will that be .
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Old 5th November 2019, 13:05   #12
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

True that, though my line of thought was on the other end of the spectrum.

I was like, "Why buy a superior car and use it for 10 years, while you can buy three different cars in the same time period and enjoy the variety."
(My finances are a ruin)

Started to notice this trend in my family/hometown social circles. Those who buy cheaper cars ( sub-10lakhs), tend to change them in five years or so.
While those who take the plunge and buy an Innova/Fortuner, are like "gonna keep them till my death", and their next car purchase will either be a cheap runabout or a graduation/wedding gift car for their children.
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Old 5th November 2019, 13:18   #13
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Absolutely agree!
My family used the Daewoo Cielo for 12 years, the MS Dzire VDi (1st gen) for 7 years and now we have the 3rd gen Dzire.
The current Dzire is a great car but as GTO said, by keeping the previous car for some more years and saving up some bucks, we could have bought a 15-20 lakh rupee sedan/SUV.

Quote:
5 good years of younger life that could have been enjoyed with a better car, were spent on a compromise instead
Can't agree with you more!
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Old 5th November 2019, 13:24   #14
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

Quote:
If you buy a superior car today, I can guarantee that you'll keep it for longer. All other factors being the same
What you're referring here is an expensive car can be retained & will not get outdated quickly & hence can serve the purpose for long years. If that is the case, it's very much true.

One of my friend, who I think makes more money than I do, is very proud of his Alto that he bought recently to have learned driving at ripe age of 40. To me, cars like Seltos & MG, I think the "connected car" is utter useless (including the automatic lights on my SCross). Point is, superior or Inferior depends on one's perspective as everyone has faced different challenges in their lives.

Talking about the real money spending part, the maintenance, smaller the car, lesser the cost of ownership, provided it's not a show piece in the garage. Superior/expensive cars are not economically viable to maintain either. But it all depends on how much one makes in a year & how much they can afford to spend. And again how much time they're willing to put to save & their priority.

In a nut shell, economical or expensive, loan or on-spot payment, 3 years or 10 years of ownership - smaller/bigger the car, lesser/more the cost of ownership. Period!
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Old 5th November 2019, 13:38   #15
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Default Re: How a more expensive car can work out cheaper (if you hold onto it for longer)

I held on to my Elantra almost 14 years gave it away reluctantly last month. Now with the rules changing holding onto a diesel car for 10 years may not be a good idea. Getting it re-registered would be a big hassle so would be the FC: charges which have been hiked manifold. These are times of flux where the ground literally is moving beneath our feet. So holding onto to car would be difficult as we move forward into the future. Though I'd like to. As cars reach the limits of their life they loose value even more than they would at 5 years, all said and done all rides are depreciation disasters. So are the gadgets we collect. But we like them so we buy them and drool over them when it isn't financially feasible.
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