Buying a car cheaper than cabs like Uber, Ola: Explained in detail

Cars24 conducted a study to find out if using taxi services on a daily basis is cheaper than actually owning a car. Taking into consideration an average person who travels 50 kilometres a day for 25 days a month for a period of 3 years. This is a detailed comparison between the costs of owning a vehicle, and using a taxi service.

By:Updated: May 06, 2021 2:29 PM
Image used for representation

In times of the new normal, a car is more of a necessity than a luxury. The biggest issue faced by millions across the globe post-lockdown is that of transport. As more and more consumers become safety conscious, they now prefer personal mobility over public transportation. In such cases, a used car is beneficial to first-time buyers upgrading from two-wheelers or public transportation, or for that matter, someone looking to buy a second set of wheels in the family. Hence, the number of first-time car buyers has been on the rise.

Due to the volatile nature of the pandemic, exposing yourself to public transport is dangerous beyond measure. In these turbulent times, more and more people are turning to the comfort and safety of their own private vehicles to commute. While public transport like metros, buses, taxis is operational, one cannot be a hundred per cent sure of how safe they are, especially during the second wave of the pandemic.

Similarly, while app-based taxi services and cabs aggregators have taken all the necessary precautions to keep their customers safe, the number of people using them is yet to hit the pre-covid numbers.

Ruchit Agarwal, Co-Founder and CFO, CARS24

Other private vehicles like bikes & scooters are gaining more traction due to the lack of safety in public transport. According to our research, much of the target population chose private vehicles over public transport services, including taxis. If you’re a regular taxi user and have plans to buy a car, this article is for you.

We did a study to find out if using taxi services on a daily basis is cheaper than actually owning a car. We took into consideration an average person who travels 50 kilometres a day for 25 days a month for a period of 3 years.

Owning a car includes various costs such as regular maintenance (service cost), fuel, parking charges, road toll car insurance, etc.

We have listed out various prices for both owning and hiring a taxi.

Price of Used Maruti Suzuki Swift: Rs. 3 Lakh (in Delhi)


Interest Rate: 14 per cent
Loan Term: 3 Years
Loan Amount: Rs. 2,70,000/- (90 percent of the car’s value); Down Payment: Rs. 30,000/- 

Total Cost of Car: Rs. 3,63,359/-
Comprehensive insurance cost for 3 years: Rs. 30,000/-
Car servicing & maintenance cost 3 years: Rs. 70, 000/-
Parking cost & miscellaneous charges for 3 years: Rs. 50,000/-


Monthly distance covered: 1500 kms
Diesel cost: Rs. 80/per litre
Fuel Economy /Mileage: 20 km/litre
Monthly running cost: Rs. 6000/-
Total running cost: Rs. 2,04,000/-

Resale value after 3 years: 1,50,000 – 1,75,000*


Daily total distance covered: 50 km

Number of trips: 2

Time of each trip: 50 minutes

Tax, Road Toll and surge pricing included.

Number of days taxi services used in a month: 25 days

Let’s us consider the fare of Uber Go in India for the study
UberGo’s fare is the total of base fare and charges for time with the distance covered during each trip
Base fare: Rs 52.5/-
Per-minute: Rs 1.05/-
Per km: Rs 7.8/-

Regular pricing
Base fare (2 trips) + Time (2 trips of 50 minutes) + Distance (20 km one way, or 40 km in total) + Toll

Rs 105 (Base fare) + Rs 105 (Time) + Rs 390 (Distance) + Rs 50 (Toll) = Rs 650 (Cost per day)

Surge pricing
Assume surge factor to be 1.5x
650 X 1.5 = Rs 975 (Cost per day)


Owning Car vs Hiring Taxi for a period of 3 years

Total Cost of Owning – Rs 7,17,359

Taxi Regular Price – Rs 5,85,000

Taxi Surge Price – Rs 8,77,500

Resale Value of used car – Rs 1,50,000

Total Cost of Owning car (after selling it) – Rs 5,67,359

Keeping this in mind, it is clearly evident that owning a good used car is cheaper than using taxi services on a day-to-day basis; the pleasure of owning a car and driving it is incomparable; it’s also safer than any taxi service offered. The car is readily available if you’re planning on a road trip with friends or during an emergency. Given the cases of virus spread, we can say owning a car is the best travel option for you and your family. You can also be a hundred per cent sure of safety!

Taxi services sure make life easy when it comes to traffic jams and driving in crowded areas or places where finding a car park is difficult. But owning a car is something else, it’s a very special feeling; the bond shared between the car and the owner cannot be described by words.

It is no rocket science that a pre-owned car is cheaper to purchase. However, over and above this, a well-kept pre-owned car is better value for money than a new one- it is not only an upgrade in life but also satisfactory in its economic value, general function, and usage.

Opting for a pre-owned asset purchase means you have to pay a lot less than the original value of the car, depending on its year of manufacture and kilometres covered, which means buyers are in car paradise and can really save on a compelling purchase. Given the life of a well-maintained car is at least 10 years, if not 15, buying a well-kept second-hand car is a fantastic bargain. This means that you can either save money by buying a second hand or upgrade to a much better car because you could, for example, buy a second-hand Fortuner with the budget you had kept aside for a new Creta.

And with smart technological solutions on a real-time basis and you can also get your car on your doorstep for what it’s worth!

Author: Ruchit Agarwal, Co-Founder and CFO, CARS24

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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