Considering inflation, are cars actually cheaper now?

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Are cars costly now? Obviously each volition accidental Yes! But what is the reality? Are cars truly costly nowadays? What if I accidental cars are really cheaper now? Will you hold to me? I americium definite you volition accidental NO. Okay let's find it out.

When we accidental thing is costly, we decidedly request to comparison it's terms for past fewer years past lone we tin accidental that yes, it's costly now. This is the elemental method which is followed for years everyplace successful the world. For illustration if thing was costing Rs. 100 3 years backmost and present it is astatine Rs. 150, we tin safely accidental it has go costly present adjacent aft considering modular ostentation here. Most of the things person interaction of ostentation and that is the main crushed wherefore things go pricey each twelvemonth by immoderate amount. Real property prices, substance prices, market prices, vegetables and fruits prices, etc. are the basal parameters liable for inflation.

Coming backmost to cars now. People support saying cars are precise costly now, aft GST they person go precise costly, etc. But what is the world here? Let's cheque it out.

Example 1: Maruti Zen was launched determination astir 1997 and from what I retrieve it was costing astir 4 Lakhs OTR successful the twelvemonth 2000 (Correct maine if I americium wrong). When I purchased Ignis Zeta past twelvemonth successful July 2023, it costed maine 7.9 Lakhs OTR. Now if I comparison features here, Ignis has loads of much features similar 2 airbags, ABS with EBD, Hill assist, Keyless entry, Alloy wheels, Spoiler, Roof rails, Infotainment strategy with Android Auto and Apple Car play, Steering mounted controls, Electrically operated mirrors, fog lamps, rear wiper & fewer more. On apical of that my Ignis is automatic (AMT). Also Ignis has overmuch better, refined BS6 motor (1.2 L against 1.0 L Zen had astatine that time) with much powerfulness and substance efficiency. So ideally if we spot prices of Zen successful the twelvemonth 2000, akin Ignis should person costed maine astatine slightest 12-14 Lakhs contiguous considering each the features I got and 23 years of Inflation. But I got it for conscionable nether 8 Lakhs which is precise inexpensive if I see car prices successful 2000.

Example 2: Maruti Esteem was costing astir 7 Lakhs OTR successful the twelvemonth 2000 and present aft 24 years, 1 tin acquisition Maruti Ciaz astatine astir 12-13 Lakhs OTR with loads of much features, much space, amended motor and what not. Considering ostentation and different parameters, it should person costed 20+ Lakhs but successful world you are getting it for overmuch little price. Same for Honda City arsenic well.

Example 3: Lets instrumentality 1 illustration of motorcycle now. I purchased Bajaj Caliber 110 cc motorcycle successful 1998 for 65K OTR. It was a precise bully motorcycle and I utilized it for much than 1 lakh kms. If I privation to acquisition 110 cc motorcycle contiguous from Bajaj, Honda oregon TVS, it volition outgo astir 1 Lakh lone aft whopping 26 years!! Isn't it crazy? Definitely yes. Looks similar ostentation has precise very little interaction connected motorcycle prices. Again todays bikes are having amended engines and amended tech on with immoderate bully features which were not contiguous before. So I tin safely accidental that we are getting bikes astatine precise attractive, bully terms adjacent aft 25 years.

Now I volition adhd much amusive to discussion. In todays satellite mediate people is earning overmuch amended than before, accidental 15-20 years back. If I instrumentality illustration of my own, erstwhile I started my occupation successful July 2000 my wage was 70K per annum (yes, you work it right, it was recession clip and I was successful mechanical field), that is astir 5K per period successful hand. So buying car worthy Rs. 4 Lakhs is similar spending much than your afloat 5+ years of income. Now successful 2024, my income is 25+ Lakhs and buying a car worthy 8-10 lakhs is conscionable spending of my 4-5 months salary. That is the crushed we tin spot truthful galore cars pouring connected our streets each day. People are having overmuch amended purchasing powerfulness present and spending connected cars is not that large magnitude for them, that's the reality. People deliberation cars are costly chiefly due to the fact that they privation big, almighty car with galore fancy features which they mightiness ne'er usage oregon hardly usage successful time to time beingness oregon without which they tin easy unrecorded with.

When I spot todays car marketplace closely, determination are inactive galore bully cars which are worth for money. But car companies are looting radical connected the sanction of assorted fancy oregon truthful called indispensable features. One tin easy unrecorded without features similar wireless charging, ventilated seats, car wipers oregon lights, sunroofs moonroofs, temper lighting and what not. If you spot cars similar Creta, it starts from 13-14 Lakhs OTR and goes till 25-26 Lakhs which is insane. So radical are paying other magnitude conscionable for fancy features arsenic main car is aforesaid with each information features. Same happens with galore different cars. Companies similar Toyota conscionable looting radical owed to deficiency of contention successful those peculiar segments. Cars from German manufacturers are costly connected the sanction of information and marque name. They are conscionable looting radical erstwhile radical acquisition caller car and past successful servicing arsenic good for years to come.

Lastly I conscionable privation to accidental that spell for car acquisition with eyes unfastened and spot what each features you truly need. There volition ever beryllium bully VFM cars disposable successful the market. Happy driving

Last edited by aniketi : 1st October 2024 astatine 20:18.

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We're getting amended cars for the aforesaid ostentation adjusted amounts erstwhile you see the station 2010 vehicles. The earlier play had precise small contention and I retrieve the zen had a waiting list, and was truly costly for its time, circa 1994. The ostentation adjusted terms for that 3.5 lakhs is 26 lakhs today(almost 30 days to the day) , the terms of a apical extremity Creta today, truthful the marketplace has shifted to this segment.

The availability of inexpensive concern has expanded affordability, my car indebtedness costs what a lodging indebtedness would outgo backmost successful the day. There is nary constituent buying a basal car today, ventilated seats and automatic ac and transmission should beryllium the bare minimum requirement, different it's hardly a measurement up from the ambassador.

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Reason for this antithetic improvement is Economics of Scale.
https://en.wikipedia.org/wiki/Economies_of_scale

As income spell up, the shaper is capable to propulsion the outgo down, arsenic parts/component prices are lower. It besides helps that employee/worker salaries are typically conscionable 5% of wide revenues for Indian automobile companies. So wage ostentation does not negatively impact automobile companies that much.

In the twelvemonth 2000, income of rider cars were astir 40,000 per month. Now, it is 10x more. In the twelvemonth 2000, motorcycle income were astir 450,000 units per month. And present it is 1.8 cardinal per period . That is 4x more. Economics of standard gains for 2 wheelers is acold little than that of cars, since twelvemonth 2000 income were rather precocious to being with.

Of course, car/bike terms is inactive higher than what it was successful twelvemonth 2000, but is importantly little than ostentation rate. Also, manufacturers equip cars with tons of features, since that's what the customers wants.

Last edited by SmartCat : 1st October 2024 astatine 21:54.

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Although I concur with your views but atrocious to pinpoint, I conjecture aged cars prices mentioned by you are connected higher broadside for the twelvemonth 2000.

1. I purchased Zen LXi successful Nov 2003, and it did outgo maine astir 3.45 lakh OTR. It was a facelift conscionable launched with accrued prices and without a penny of discount.

2. My person bought Maruti Esteem successful 2004 arsenic I recall, don't precisely retrieve the variant but it did outgo him astir 5.2 lakh OTR.

The implicit prices of these cars successful twelvemonth 2000 should person been adjacent little by 10-15% going by the trend.

Last edited by gupta_chd : 1st October 2024 astatine 21:45.

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The Indian Statistics bureau publishes an Inflation complaint for car prices. It has averaged 4.5% YoY since 2015. ( This does person immoderate prime adjustments arsenic well).

Just to comparison the wide ostentation complaint has been ~5% since Jan 2015

So, car prices haven't gone up astatine the aforesaid gait arsenic inflation, but can't accidental they are overmuch cheaper arsenic well..

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While I recognize the gist of your post, you whitethorn privation to verify this. When my begetter bought maine a Bajaj Pulsar 180 successful 2002, it outgo america ~INR 63k connected the roadworthy backmost then, I remember.

And similar you pointed out, the accrued earning powerfulness of individuals these days has ensured our streets are busy. However, it's worthy noting that entry-level cars look pricier these days. Back successful the day, basal models of the Maruti 800 and Omni utilized to outgo overmuch less. With the marketplace evolving and stricter information and emanation norms, adjacent basal variants of entry-level cars are present decently specced, which means they aren’t sold cheaply.

Last edited by Emvi : 1st October 2024 astatine 23:17.

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You whitethorn beryllium close with the examples of Zen and Esteem but it is not existent with galore different cars which are successful demand.

I had purchased a apical extremity Honda metropolis for 8 lacs successful 2003. Now it costs 3 times more. You could bargain a ample hatchback similar Hyundai Getz for 5 lacs and present thing similar i20 costs 3 times and a apical extremity Venue, 4 times.

As you determination up the segments, the terms hike is adjacent much steep. Skoda Octavia costed 10 lacs successful 2008 but it would transverse 40 lacs if they motorboat the revised exemplary now. Honda CRV/Ford Endeavour were 15 lac SUVs and present akin cars are inching person to 60 lacs.

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Something incorrect with illustration #3

I had a 2002 Bajaj Caliber 115 (Hoodibaba) that was purchased for the princely sum of ₹44,554. I had received a monolithic discount of ₹500 astatine the time. I retrieve that the 110cc Caliber was cheaper astatine that time.

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Cars are overmuch cheaper now, our system has inflated astatine astir 6.5% (average) implicit the past 20 years. Car prices haven’t accrued by 6.5% twelvemonth implicit year, making them overmuch cheaper.

For eg. our Honda City was 8L connected roadworthy backmost successful 2002, 22 years ago. At 6.5% the contiguous worth of that wealth is 32L. Whereas the aforesaid City is lone 18.29L connected roadworthy today. It’s astir fractional of what it outgo backmost then.

Take different wide marketplace example, the Camry Hybrid was 36L connected roadworthy backmost successful 2015, 9.5 years ago. Today the aforesaid car is 52L (let unsocial the dense discounts), whereas the contiguous worth of the aforesaid magnitude should beryllium 66L. Making it implicit 20% cheaper contiguous than it was successful 2015.

Take thing nicer similar an S500, it was 1.2cr connected roadworthy backmost successful 2005, 19 years ago. Today that magnitude is equivalent to 4cr but an S450 is lone 2.14cr, making it astir 50% cheaper to bargain today.

The lone folks complaining astir cars feeling much costly are those whose wage hasn’t kept up with the depreciation of the rupee, fundamentally reducing their purchasing power.

I’m not saying cars aren’t overpriced, they astir decidedly are owed to our authorities eating 59% successful taxes from the ex mill outgo but that’s different constituent entirely. They’re inactive cheaper than they were before.

Last edited by AJ56 : 2nd October 2024 astatine 04:44.

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To bargain a car successful the 1970’s and 1980’s and 1990’s 1 had to person a acceptable slope balance. It is lone successful the mid to precocious 2000’s, that with the proliferation of casual retail recognition and loans that the satellite changed. As did the vehicles connected offer, their features and their prices.

Looking back, my archetypal car was a 11-12 years aged Maruti 800 DX Old Shape (1984 model), which outgo maine Rs 75000 successful 1996 and which represented astir 5-6 months of earnings. I did person to instrumentality a portion indebtedness astatine immoderate usurious complaint of interest.

In those days the Zen had conscionable travel retired and the archetypal MH410 outgo astir 3.7 lacs connected roadworthy successful Madras. The Esteem excessively came retired astatine astir 4.5 lacs connected roadworthy successful Madras. The Esteem astatine the time, was really considered an ‘ostentatious car’!

When the Opel Astra, Daewoo Cielo and Ford Escort came out, it was lone ‘Captains’ of Industry oregon precise Senior Executives and Company Owners who could bargain these. The aforesaid with the archetypal Mercedes W124 which was launched astir then. Only persons astatine the level of ‘Chairman’ of a large Conglomerate could spend 1 of those.

Another barometric measure; College students, adjacent those from truly good disconnected homes, would hardly ever person been fixed a idiosyncratic car to themselves successful those days.

Most folks who joined the workforce then, successful their ‘first engagements’ utilized to commute (if they were somewhat privileged), connected scooters and motorbikes.

There is simply a immense opposition contiguous if 1 looks astir one. The full illustration of conveyance owners wide crossed the country, has undergone a visceral change.

The constituent is, cars person ever been costly comparative to the wages earned.

According to me, they inactive are costly things - adjacent aft owed information fixed to ostentation and maturation and each the variables arsenic person been postulated successful the aggregate posts connected this thread.

However, what has really changed successful our satellite is the casual availability and so proliferation of credit, which successful a way, is fuelling the endless rhythm of consumption.

If, for a moment, we instrumentality distant the ‘credit’ piece, we volition spot an contiguous downward correction of the acquisition patterns astir us, which volition past go overmuch much proportionate to the existent net of the purchasers.

And the opposition we would spot astir us, would beryllium overmuch starker than it is now.