Very common question that strike every middle class independent individual is should I buy a car? Will it be cheaper to commute to work and weekend outing? Is it a financial sound decision to buy a car? lets see what is better buying car versus renting Uber.
Expense borne to own and maintain a car.
- Car cost 5lakh and remember is a depreciating asset.
- Annual car insurance 12000 Rupees
- Maintenance approx 15000 Rupees if you drive around 25k kilometers in a year.
- Fuel expenses for 25k kilometer will be approx 100000(1lakh) Rupees.
- Miscellaneous expense like toll tax, parking charges etc. Additional 5000 Rupees.
- Total expenses are 5lakh one time and 132000 Rupees annually.
- Problem of finding parking space.
Expense borne to rent a Uber
- Uber share costs around 6-7 Rupees per kilometer.
- Uber go costs flat Rs 120 for 10km ride
- More wait time.
- If you reside about 10km from your office, it would cost less than 120 per day for Uber share and 300 for Uber go.
- An for weekend outing with family lets consider 1500 per week. Which is good enough I guess.
- Total annual expense with Uber share will be (150*250 no of working days) 37500 and 78000 for weekend trips. Total 115500 Rupees.
- Annual expense with Uber go will be (300*250) 75000 and 78000 for weekend trips. Total 153000 Rupees.
Now the main question is which is more economical Buying car versus renting uber?
What if you were park your 5lakh in 100% risk free investment. 5lakh will yield approx 36000 annually. Which is a decent amount that can help you pay your Uber bills plus your 5lakh is not depreciating as car. So now we have narrowed down to annual expense of 132000 Rs for renting a car and 78500 for renting a Uber.
From above math, We can conclude that Uber renting is economically sound decision. In case you are going for car which costs 2lakh with high mileage you can re calculate and check if car is more suitable options. However, Owning car is a altogether different pleasure.