Monday, June 15, 2009

What Is The Real Cost of Owning The Wonder Car - Nano?

All we know that the Nano cost Rs. 1 lakh but how much will you have to cough up to run the car? Two-wheeler companies have been saying that the running cost will differentiate the Nano from a premium motorcycle brand. ET worked out the math.

The entry-level Nano, with its Rs. 1-lakh price tag, is expected to have an on-road price of Rs. 1.35 lakh in Pune. This will include the road tax of around Rs 10,000 including Rs. 2000-3,000 as registration and a one-time comprehensive insurance payment of Rs. 4,374.

The EMI for a five-year tenure loan is Rs. 2,300 added to which will be the petrol bill, with the Nano boasting a fuel efficiency of 23.6 km to a litre of petrol. In Pune, petrol retails at Rs. 44.29 per litre.

Explaining the tariff structure, the Maharashtra transport commissioner, Deepak Kapoor, said individual buyers have to pay 7% as road tax on the total cost of the car, which rises to 14% for corporates. Moreover, the tariff structure is based on the cost and not on the size of the engine. “We are not expecting huge tax collection on the Nano since its base price is low,” Mr Kapoor said.

The Nano’s insurance costs are also higher than two-wheelers. Finance industry professionals tracking the sector said the EMI on a higher-end Nano could be Rs. 3450-4000 for a five year loan while one-time insurance costs would be over Rs. 6,000.

When it comes to spare parts, though, the Nano is not going to be very different from other cars since all automotive manufacturers make their money on spares. “The world over, car makers always earn on spares and the Nano is not going to be any different. Individual spares of the car will probably cost the same as those of the Indica,” said a Nano vendor.

The owner of an automotive garage said the most commonly replaced parts in an Indica are front and rear bumpers.

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