Sunday, September 12, 2010

Bought a new car - Maruti Swift Dzire

I made my decision to buy a car in Feb 2010. I haven't driven on Indian roads much - other than the few days of driving lessons that I took in 2002 (just before going to US). The thought of driving a car on Indian roads, was very scary. I still wonder how people drive these giant vehicles on the road, without bumping into each other. I consoled myself when I saw these huge buses and trucks maneuvered on the roads with ease, by our dexterous drivers. (Also read: Driving on Indian roads - pleasure or pain?)

The following are some items that influenced my decision to buy a new Maruti Swift Dzire. The parameters given here should be useful for others, as well. Of course, the actual values others apply, may vary :)


Used vs New

When I made my decision to buy a car, I started looking for used cars. Since I haven't driven on Indian roads, I thought it is a good idea to buy a used vehicle - so that, I don't have to worry about the wear 'n tear or damages. Religiously, I looked at the "Classified" section in Hindu to get some understanding of the models available in the market & the price range. I visited even a couple of "Maruti True Value" exhibits to find out the "quality" of the used cars available in the market. Used cars are REALLY USED in India. Either, the cars have become very old (or) there is lot of miles on the car in a short time. If the car is relatively new or used very less, they charge you almost equivalent of the price of new cars.

Buying used cars directly from "known" people is good. Otherwise, buying used cars directly from a third-party has its associated risks. When you want to play it safe by buying used car from a dealer, you should be ready to pay the extra price. For example, Maruti True Value used cars sell you cars with 1 year warranty. However, they charge you nearly 10 - 15% more than the open market. In essence, used cars aren't very "attractive". Well, actually the smell of brand new cars mesmerized me more !

Small vs Big

Should I buy a small/compact car or should I go for a big/sedan car? Should I buy a car or should I go for a SUV/minivan? There were lots of questions.

Small cars are easier to drive in Chennai streets and city interiors. Taking a 180 degree turn in crowded/congested streets is easier, too. It is convenient for ladies & short people to drive a small car. Even from a budget point of view, small cars are very attractive and there are so many models/options available in that segment/category. But, it would be extremely hard for a 6.2 ft person (like me!) to squeeze into the driver seat. Also, it would not be convenient for a family of 5 members to sit comfortably - especially, when you have to go on a long drive. So, I ruled out the option of buying a small car.

I decided to buy a sedan, because it is spacious & at the same time, it is NOT as BIG as a SUV/mini van. So, relatively it is easier to drive on Indian roads.

Financing vs Paying by Cash

This is a "no-brainer". I straight away went for "Financing". The interest rates are very attractive and they're hard to resist. For example, for a 3-years fixed deposit banks give you an interest of 7.5%. However, for a 3 years car loan, they charge you just 8.5% interest. You are better-off investing the money in an 'appreciating' asset - instead of throwing the money on the car. I would recommend you to check with the bank where you have salary account (instead of going with the creditor that the car dealer arranges for you). Also, it is always recommended to check with multiple banks before finalizing on one creditor. Remember "When banks compete - you WIN" :)  (Also read: Loan application process in India - very simple)

Banks may force you to buy an extra 'insurance' for the loan amount. Don't ever do that. It is not a must to get insurance cover for your car loan. Car, by itself is an asset. Moreover, you would be taking insurance for the car. If something happens to you, the banker can always come and take your car. If something happens to the car, you'll get the car's insurance provider pay for it. So, don't buy a separate insurance from the banker/creditor. On instances where you have to take delivery of the car "soon", bankers/creditors may force you to get insurance for speedy processing. Don't fall into the trap.

Automatic vs Manual

Cars with "automatic" transmission are very easy to drive. In fact, some of the modern automatic cars are even 'optimized' for fuel consumption. However, I wanted to be a Roman in Rome. So, I joined the "herd" :) Honestly, there were two reasons why I didn't go for a car with  "Automatic" transmission. First, they were pricier than the "stick-shift" ones. Second, I wanted to be able to drive a "manual" transmission car. That way, when I have to drive other(s') cars in India, I would be able to drive them with ease.

Having driven a stick-shift car in India for a month, I feel that it is painful to drive them in "stop 'n go" traffic. So, if you are buying a car that will be used mostly in city interior roads, do consider "Automatic" ones.

Diesel vs Petrol

Petrol cars provide more driving comfort than Diesel cars. Diesel engines are noisier. If you have driven Petrol cars before and trying Diesel cars now, you'll notice the difference right away. From the point of mileage & cost of fueling, Diesel cars are very attractive. However, the cost of Diesel cars are 10 - 15% higher than Petrol cars. You should go for Diesel cars only if you anticipate driving long distances, frequently. Otherwise, it would take a long time for you to "break even" the premium that you paid for Diesel car. I did order a Petrol car initially. However, I had to change my order and settle for a Diesel car, due to the long wait time for the Petrol version of Maruti Swift Dzire.

Why Maruti?

There are so many brands available in India, today. The prices are very attractive/competitive. Almost all the car manufacturers (that, I know of) sell cars in India - Mercedes, Volswagon, Ford, Toyota, Honda, Hyundai, Chevrolet, Tata, Maruti and the list goes on ! I wanted to avoid 'premium' cars. Based on the information that I gathered from friends, maintenance costs of 'Premium' cars are HIGH. Also, the resale value is LOW. Maruti Cars provide low cost maintenance and also high resale value. The maintenace cost of Tata cars is also LOW. However, Maruti's post-sales service (for maintenance) is considered the BEST.

In fact, I did consider TATA Indigo MANZA, before settling down for Maruti SWIFT Dzire. Honda City was also very attractive in terms of features & convenience - however, it went above my budget and I also heard that the cost of parts replacement/maintenance is high.  Hence, settled for Maruti SWIFT Dzire. I like the features and convenience of Maruti SWIFT Dzire (for the price that I paid!). No wonder, why Maruti is still the #1 brand in India.

How did I get adjusted to driving a car on Indian roads? How did I learn to drive a stick-shift/manual car? Lots of interesting experiences to share... wait for my next blog post :)

Also read:

Self Adjusting Traffic - Miracle on Indian Roads
Two wheeler service - Can't escape from those long lines and hours of waiting
Heavy Rain made Chennai into Venice

11 comments:

  1. Congratulations!!!. Waiting for a post on a long drive to a vacation spot

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  2. Congrats!!! enjoy the new car smell and ride too ;)

    -atchuta

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  3. Congrats on your new car, I am visiting this blog for the first time and it is excellent. I was looking for an answer on what address you gave for SSN/401K/DMV/Voter list etc. and about Jury duty. Do we need to inform US Government? Do we need to inform India govt about R2I. looks like though you were not a US citizen - I looked for answers for some of these. direct me to the right link if you already have this info.

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  4. 401K - Depending upon the provider, you can give a foreign address. For ex., Vangaurd would allow you to do that.

    DMV - Yes. For example, Oregon DMV allows you to do that.

    https://www.oregondmv.com/online/faq_address.htm#Foreign

    You can do the address change on Voters list, in your DMV itself.

    SSN - No address change required. However, you need to keep IRS informed about your address change. You should fill Form 8822, to notify IRS about your address change.

    There is no "formal" process to notify India govt. about R2I. If you have a PIO you may need to get it registered, at the FRRO.

    http://www.immigrationindia.nic.in/faq_registration2.htm

    If you have an OCI, you don't need any registration

    http://www.immigrationindia.nic.in/Oci_Card2.htm
    Hope this helps.

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  5. Wow... reading ur blog reminds of those days when my husband and I had to settle on cars in India... What a coincidence Saro... we moved back to US and looks like u have settled down in Chennai now...
    -Anandhi

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  6. Oh ! You moved back to Seattle. Great. [I believe you were the Anandhi who worked for Azaire]

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  7. Dear Saro ji,
    Thanks for sharing your experience on car buying. My status and yours are almost the same, only diff is that you stayed in US and I in Bahrain. I also learnt a few classes before leaving for Bahrain and now am back in Chennai struggling to get around Chennai traffic and driving chaos on roads.

    Scared of the congested roads, indisciplined traffic and driving methods, smoke and dust pollution, and all the negatives; I tried the bus, auto, cab etc for the first couple of months and found it quite ok. But the dependence on their terms and availability at the time you need, drove me to go for a Scooty Pep which I use to drive to office - a bit inconvenient but better off compared to other modes of transport looking at the ease with which I can get past heavy traffic; but have to be extremely careful and watchful lest there is any accident mostly due to other's fault.

    I am also thinking a lot to go for a car of our own which would also be fullfilling a long pending dream of my wife. For most part of our marraige (now nearing 20 yrs) she has been aspiring for a car majestically parked in front of the house, giving an eye of pride for self and envy for others; "neighbor's envy owner's pride".

    I can get a world of tips from your experience on car purchase. Now I am able to think more practically why or why not one should have a car and with what parameters one should proceed to choose the one from amongst a host of options.

    My friends have been suggesting Maruti WagonR based on budget, head/leg room, pax capacity etc. What say you, pal?

    Cheers.
    S Varadarajan, CC CL - Member CTM 9380606600

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  8. Hello Varadarajan !

    Good to know that you are also interested in buying a car. Yes, WagonR is definitely good. You should also consider Ritz. It is more spacious (tall boy car).

    Enjoy your ride on Chennai roads :)

    - Saro

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  9. If you prefer to buy a private used car instead of brand new, find out if the seller owes money on the car for sale and never offer to "pay-off" the car for the owner.

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