Which car segment is right for me?

By BankBazaar.com | January 19, 2011

Which car segment is right for me?

Fixing a budget will give you more clarity on which models to choose. It will also act as a locus which defines the perimeter of flexibility that you can afford in case your needs are not satisfied by a lower end model. A budget is the best way to shortlist a segment as most of the cars available in each category in India are priced neck to neck.

A guide to help you decide the right segment for choosing a new car. Learn the steps to be followed to make sure that you get value for money as well the pleasure of driving something that’s an extension of you.

A new car in the house is a great achievement for many of us even in today’s “India shining” generation. We all remember the days when there used to be one or a maximum of two cars in the whole colony or street. Today there are probably very few urban houses which have less than two cars. A car has become a necessity rather than a luxury. This article will hence delve on solving your needs by choosing the right car for your need.

Step 1: Defining the need: The Why?

– Why are you buying the car?
– Is it for commuting to and from office?
– As a car for the family to go out on weekends?
– For the purpose of regular business travel; upcountry sales etc?
– To get adrenaline boosts?
– For your college going child?
– A spare car for emergencies?
– All the above and also as a luxury statement?

Once you are able to answer this first question, choosing and buying your new car becomes a lot easier. This is the most important aspect in your “operation buy new car” so spend a lot of time on this, include the family members too in the process, as they will surely expect to use the car if given a choice, especially when its new! Make sure you list out all the possible roles you expect your car to play in the household, don’t forget to add “for sleeping when there’s a fight with the missus or vice versa”!!!

Step 2: Drawing the boundaries: The financials

This is the crucial step where money meets desires. Although there may be a case of what came first in between step 1 and step 2, you could swap them based on your liking. How much ever you are ready to spend for buying a new car, answer this question irrespective of whether you are buying a car in exchange for your old car, buying the car entirely on cash or going in for a car loan.

Fixing a budget will give you more clarity on which models to choose. It will also act as a locus which defines the perimeter of flexibility that you can afford in case your needs are not satisfied by a lower end model. A budget is the best way to shortlist a segment as most of the cars available in each category in India are priced neck to neck.

Step 3: The balancing act – Needs vs. Budget

Once step 1 and step 2 have been thoroughly done, comes the final act of balancing between your needs and your budget. Some higher end models could satisfy your needs, but they might not fit into your budget. Some models may fit into your budget but may not satisfy your needs.

Take a sheet of paper and write down your needs in one column and find out the cost of satisfying all needs. The cost of satisfying all needs is the cost of the car segment which suits it. Now, take off the most unimportant of that need and check if it has a major impact on the cost. Keep doing the same till all those needs which can be sacrificed are ticked off. Now check the budget. Has the exercise helped you zero in on a segment which matches your budget or is it still the same? In the former case you can take that segment as the one from which you can choose your car, in the latter case start planning for hiking your budget.

The basic idea is to sacrifice some needs if it gives a big saving in cost. Else to stretch yourself so that at least all needs are matched. The extra bucks will at least result in more peace of mind and satisfaction while driving. A car is expected to be with you for at least 3-5 years. If you are unhappy with even one aspect, driving becomes a pain.

The segments:

Till a few years ago the cars were segmented based on length/size into A, B, C, D segments, starting from small, going upto big. But, lately it has been seen that in the same segment you could have various options in terms of utility of the car, and sometimes even 10 different versions of the same car. This led to a classification based on pricing. Even this has led to lots of confusion as the number of cars in each price band is large. Thus the ideal segment would be a pool of cars which suit your budget and satisfy most of your needs.

A rule of thumb segmentation we could use is:

Small or Compact car (needs satisfied in small budget)
Price band: 2-3.5 Lakh
Indian models: M800, Alto, Indica, Spark, Santro, i10 (basic), A-star

Premium compact car (needs satisfied in larger budget)
Price band: 3.5 Lakh-6 Lakh
Indian models: Getz, Swift, Ritz, Estilo, Palio, i10, i20, Wagon R, Fabia, Fiat Punto

Super premium compact car:
Price band: Above 6 Lakhs
Indian models: Jazz

Entry level Saloon (Big car at entry level prices)
Price band: 4.5 Lakh-6 Lakh
Indian models: Fusion, Ikon, Accent, Logan, Swift Dzire, Indigo, Indigo marina

Mid segment Saloon (Big car at medium prices)
Price band: 6-10 Lakhs
Indian models: Linea, Fiesta, Optra, City, Verna, SX4, Cedia, Lancer, SR-V

Luxury Saloon (Big cars at big prices)
Price band: 11 Lakhs-25 lakhs
Indian Models: Accord, Civic, Sonata, Laura, Superb, Octavia, Corolla Altis, VW Jetta

Premium/Super Luxury (Real big price, Luxury. Period)
Price band: 30 lakhs-50 lakhs
Indian Models: Audi-A4, A6, Q5. | BMW-3 series, 5 series | Mercedes Benz-C-class, E-class
Porsche-Cayman, Passat | Volvo- S80

Sports utility vehicle (Big money, big thrill)
Price Band: 10-50 lakh
Indian models: BMW-X3, Endeavour, Captiva, CR-V, Tucson, Merc-M class, Nissan X-trail, Outlander, Pajero, Montero, Land Cruiser, XC90

Multi-utility vehicles (Big on work, ok on price)
Price band: 2-25 lakh
Indian models: Omni, Tavera, Bolero, Getaway, Xylo, Scorpio, Versa, Rhino, Safari, Sumo Victa, Sumo Grande, Xenon, Innova.

*** This article has not included cars in the above 50 lakh segment and there is no unique way to segment them.

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