Car Masterclass: 2025 Best Cars, Get 50% Discount on Next Car | 1% Club Show Ep 64

It's a 5 cror Lamborghini. How much of that is actual tax?

When you buy a Lamborghini or a Ferrari, you're making the government really really rich because there's about 125% to 150% additional taxes just to bring it over to India.

And interest rates for a secondhand car is about 14% 16%. So this is an expensive loan. Is there a hack for

expensive loan. Is there a hack for this?

What if I tell you that you can actually profit off of that car loan that you're taking? You make more money than you're

taking? You make more money than you're spending on your interest. I would say you're full of Skinny is going to charge you at least a 1 and a half lakh to a 2 lakh rupee premium for giving you that mental peace of mind. But you can

do almost every single thing that they do with their car evaluations for under 5,000. So the very first thing that you

5,000. So the very first thing that you need to do is I think spinny is going to change their policies after listening.

Yeah, sorry Spinny. So 1.5 lakh Res to 1.8 lakh rupees is the insurance cost on that 32 lakh rupee XUB700. What if I told you you could actually get that

insurance premium down all the way to a 30 to 40,000 rupees?

I'm listening.

That's exactly what can happen if you use a website like what if I told you 90% of the rare earth minerals which are required to make these EV cars and EV

batteries actually found in China. One

of the reasons US actually backed away from troubling China so much is because China literally came out and said let's continue with this war. I'm just going to block your rare earth minerals. And

the moment your rare earth minerals get blocked, bye-bye Tesla. Bye-bye Tata.

And bye-bye EV companies all across the world. Tesla is about to come to India,

world. Tesla is about to come to India, right? Do you think it's a good idea to

right? Do you think it's a good idea to buy a Tesla?

Hey guys, welcome back to another episode of the 1% club show. In this

episode, we are going to be discussing about the signs of car purchase. Cars

are the second most expensive purchase in any person's life. If you do not spend even a few hours to bring down the cost of your car, then you're going to be spending lakhs in extra rupees. If

you watch until the end of this video, you will know everything about buying a cars, whether it's electric, petrol, firstand secondhand car and all the secret hacks will be unraveled in this

episode. So, make sure to watch till the

episode. So, make sure to watch till the end. Rohit, welcome to the 1% club show.

end. Rohit, welcome to the 1% club show.

Thanks for having me here, Sharon. It's

great to be here.

Rohit, let's begin right away. And I am now in the market to buy a car.

Uh, but I want to start from the absolute lowest budget cuz I want to know what is the best car in the market right now for every different budget. So

let's start with under five lakhs and I want cars in both segments, petrol and electric because electric is also like you know picking up now.

Got it. So see Shahan now I am a massive advocate of secondhand cars not entirely but up to certain budgets that people might have I really advocate for secondhand cars now you've asked for a

five lakh budget if someone has a 5 lakh rupee budget my best advice for them is go for a secondhand car you can get an amazing Honda city now Honda is a great brand right it's very reliable it can

easily get you 15 to 20 years Honda City you get under five lakhs in secondhand yes uh a Honda city maybe like a 2015 model which will get you at least another 5 years you can find that for

even three lakh rupees and Hondas are very reliable so they can last you a lifetime and you'll get that under five lakh rupees in fact you'll get it for three you'll save two lakh rupees I mean what's the alternative if you went for a

brand new car you'd probably end up buying something like a cario and if you think about it a scallario versus even a 10year-old Honda City to me at least a Honda City makes a lot more sense it's

safer it performs better it gets you more people inside the car more space more comfortable as well so under 5 lakh rupees. When it comes to a petrol car, a

rupees. When it comes to a petrol car, a Honda City, definitely if you want a secondhand car, when it comes to EVs, you can get a Tata Thiago. A brand new Tata Thiago will come for somewhere

around 10 lakh rupees uh on road, but you can get a good secondhand one for under five. If you're lucky, you might

under five. If you're lucky, you might also find a Tata Nexon.

Got it? Now, let's go to the next budget, which is under 15 lakhs.

Under 15 lakh rupees. Now under 15 lakh rupees budget is where I feel people can actually start exploring brand new cars.

Now let's say someone definitely is like anti-se secondhand. You can definitely

anti-se secondhand. You can definitely get a secondhand car too. But let's say you want to buy a brand new car. I can

actually recommend you to buy the Tata Curve or even the latest Scoda that's come out uh which is the Killak. The

Scoda Killak is a very good car. The

Tata Curve is a phenomenal car. The Tata

Curve is going to get you a lot of features and a futuristic look. Yeah.

And the Skoda Killak being a Skoda from the Volkswagen Group. It's going to get you great performance and it's actually a tax hack which we'll explain later.

Got it. So that's under 15 lakhs.

Under 15 lakhs.

Now let's go to under 25 lakhs for a fap.

Okay, let's go for Mahindra XUV 700 default. It's my

favorite car in the normal consumer market right now. I'm not talking about the Mercedes and the BMWs. But when you take that out of the picture, the Mahindra XUV 700 hands down my favorite

car and in my opinion the best car you can get under 25 lakhs. In fact, that car delivers value which many 50 lakh rupee cars don't deliver. And it's

priced at just 25.

And then in the EV segment, under 25 lakh rupees in the EV segment, I would actually recommend you to get maybe something like a Tata Nexon or again the Tata Curve also has its EV models which would be great under 25

lakh rupees.

But you said that for under 15. Under 15

lakh rupees, you can actually get a petrol Tata curve. The EV1 is slightly more expensive.

Yeah.

All right. Now, let's get to the budget that I'm looking at currently. Okay.

Under 50 lakhs, you should definitely buy the Scoda Kodiak. Now, that is one of my favorite

Kodiak. Now, that is one of my favorite cars. Again, if I had a favorite car

cars. Again, if I had a favorite car after the XUB700, it would be the Scoda Kodiak.

But, but really, because most people who are looking at a 50 lakh budget automatically are thinking BMW, Mercedes. You're saying that's a bad

Mercedes. You're saying that's a bad option for that. First of all the starting Mercedes or the BMWs or the Audi's you'll have to pay about 60 lakh rupees.

Huh?

I mean 50 60 I mean when people are think 50 then it becomes that's 20% more.

I know it's quite a bit but if you have a 50 and if I have to really talk about the value of a car see if you're coming from a car which delivers value and you're not someone that wants the logo.

See, if you're going to buy a BMW or a Mercedes, which starts off at about 60 lakh rupees, you're literally paying 30 lakhs just for the logo. The value of that car is not going to be significant

because it's entry level. It's like

buying the base level iPhone. It's great

to get the Apple logo, but the base model iPhone isn't going to deliver you that much value. The Scoda Kodiak, you'll get it for about 52 lakhs if you buy it in a smart way, but the value

that car delivers is as much as a 75 lakh rupee Audi or u yeah like a BMW or a Mercedes. So the Scoda Kodiak hands

a Mercedes. So the Scoda Kodiak hands down in my opinion best car to buy.

And in the EV segment in the EV segment I would actually go for the BYDS of the world. In fact even the MG Za CV is a great option. It's

significantly lesser than 50 lakhs. It's

priced around 25 lakh rupees but the MG ZV is also a very good value for money EV car. Uh unfortunately it hasn't for

EV car. Uh unfortunately it hasn't for some reason sold that much in India. So

MG packs it up with huge discounts. But

it's a great car which I feel should have sold a lot more.

Got it. And now let's go to the 1 cr right under 1 cr. What is the best car to buy in India right now? Petrol and

EV.

I'll go for the BMW M340. I have a bias.

It's a performance beast. It's a

beautiful car. It would cost you about 95 lakh rupees onroad. Beautiful.

Performs crazy. Any car enthusiast will tell you how good an M Sport is. If

you're talking about EV cars under 1 cr, I'd actually recommend the Mercedes EQB.

That's a great option. You'd get that for about 85 lakh rupees.

Got it. Now, let's go the final level.

Mhm.

The 5 cr mark.

5 cr.

Under 5 crores.

Under 5 crores. Get yourself the Range Rover Sharon.

The Range Rover.

The Range Rover. That's going to be a phenomenal car. Great value, everything.

phenomenal car. Great value, everything.

Perfect package. That's going to cost you about 32 crores. If you go for the top end model, it's going to cost you about 3 3.5 crores. But it's a Range Rover and the electric,

the Porsche Tyon, superb car. Uh,

phenomenal to drive. It's going to get you a lot of speed, a lot of power. 3.2

crores. That's going to be the best choice when it comes to under 5 crores.

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So now we've covered the different cars for every different price segment.

Now let's come to exactly how do you afford you know buying a car like this because everybody wants to buy an expensive car.

But let's be honest, right? Most people

can't buy a car outright. They have to take a loan or an EMI and it becomes a huge burden on them. So let us first try to understand firstand versus secondhand. Uh how do we actually look

secondhand. Uh how do we actually look at the math of a firstand versus secondhand car because there are pros and cons for both. So, what do you recommend? When to go first and when to

recommend? When to go first and when to go secondhand? Just try to explain that

go secondhand? Just try to explain that to us.

Personally, I feel that no matter what your budget is, no matter how much money you make, a secondhand car allows you to always punch above your weight because you're never going to be making infinite money, right? There's always

going to be a certain budget that you have to purchase a car. If we have to follow, let's say, the financial rule of 2410, if you're making about 20 lak rupees per year, your inhand salary is

going to be about 1.25 2 5 lakh r per month which means that you should be ideally not spending more than 12 to 15,000 per month to buy a car over 4 years. So ideally that's going to get

years. So ideally that's going to get you somewhere about an 8 to 10 lakh rupee car and that's if you buy a brand new but now the moment you get into the secondhand car market with a 20 lak

budget uh sorry with a 20 lakh rup CTC you can you don't have to stick for that 8 to 10 lakh rupee car you'd be spending 8 to 10 lakh rupees but you'd probably be getting a car which is worth 15 lakh rupees when you consider brand new a

significantly better car but now let's say that you're someone that's making 1 cr a year at that point in time you also have to understand that cars are a depreciating asset. If you're someone

depreciating asset. If you're someone making 1 cr a year, there's so much that you can be doing to grow that money.

Correct.

And the smartest thing at that point in time as well, I would say buy a secondhand car, you might, if you're in the 1 cr budget, 1 cr salary, you might have the potential to buy a 70 lakh

rupee Mercedes if you really wanted to.

With all the finance options available, the brand will make sure you have the money to buy a Mercedes even if you're someone making 25 lakh. But that's not the smartest thing to do. So I would always recommend a secondhand car

and usually secondhand cars are how much% cheaper than the firstand so I'll give you an example for I drive a secondhand car right now I'm making somewhere around 50 lakh rupees per year

I decided to buy a secondhand Honda city a brand new Honda City comes for about 22 lakh the variant that I drive my car when I bought it was 4 months used and just used for 1200 km okay

I paid 17 lakh for it wow so if you think about it that's like a 30% % saving for a barely used car. So

you can save big amount. The basic

savings also which you can get for a secondhand car which is barely driven can be around 25%.

They also say that the second that the car comes out of the showroom it loses about 25% value.

Right. It loses 25% of the value the second it comes out of the showroom.

Exactly.

No but before that I wanted to ask you what are those reliable platforms that I should look at to buy these secondhand cars.

Right. because there is one option where I go to these aggregator websites versus having a good network of you know friends or uh connections or car experts who can refer me to the right person.

What is the right way to look at it?

So when you're buying a secondhand car right Sharon there's quite a few options. Let's start with the most the

options. Let's start with the most the best option first. It's actually to look within your friends and family. So if

you have someone within your friends and family that's willing to sell their car that's your most trustable option to buy it from. If not,

it from. If not, how? Because a lot of people are fearful

how? Because a lot of people are fearful because it doesn't matter if you're my friend or family.

I'm buying something worth 15 20 lakhs from you that that person is not going to probably think about my best interest, might not tell me about some small fault that the car might have because that person wants to sell it to

me. So, how do I really trust even my

me. So, how do I really trust even my friends or family who's trying to sell a car to me versus going to a reliable platform who is guaranteeing that I have checked everything 100% uh everything is

all right. Now, you can buy. So how do I

all right. Now, you can buy. So how do I make that decision?

So see if you want to go to a trustable platform like let's say a spinny spinny is going to charge you at least a one and a half lakh to a 2 lakh rupee premium for giving you that mental peace of mind that this car has been vetted by us.

One and a half lakhs rupees extra.

Yeah. Yeah. That's the profit that they make. 1 and a half to two lakh rupees

make. 1 and a half to two lakh rupees extra. But you can do almost every

extra. But you can do almost every single thing that they do with their car evaluations for under 5,000. And you can do a multi-layer check. That's exactly

what I did with my Honda City because I wasn't going to just trust the person blindly either. Right? So the very first

blindly either. Right? So the very first thing that you need to do is book a 799 or a 999 rupee package from Go Mechanic.

They will send someone to your building with all the equipment. They will check the car in and out or they will send it to the address of the person that is selling the car. So the car will instantly be evaluated by a platform

like Go Mechanic and they will tell you whatever problems there are. Second, you

need to check the service history of the vehicle because the service history will tell you if there are if the car has been regularly serviced, if there were any problems which it had been serviced for. So, you can go through the service

for. So, you can go through the service history, you can get the car evaluated.

Alternatively, if go mechanic is not enough, you can also take it to the brand showroom, I mean the brand service center. So, I'm buying a Honda City,

center. So, I'm buying a Honda City, right? I would take it to the Honda

right? I would take it to the Honda service center, ask them to do a secondary level of check. They'll charge

you about 2 and a half,000 or 3,000 rupees to do this check. So, you're

doing a multi-level check. You're doing

go mechanic, you're doing Honda. If

you're still cautious, also take it to your local car mechanic.

All of this under 5,000 rupees. Spinny

charges you 1.5 lakh rupees for the same thing. I'll give you another hack by the

thing. I'll give you another hack by the way. So,

way. So, whenever you have to list your car on, let's say, a spinny or a cars 24. When

you take the car to them, they evaluate the car for free because they want to check the condition of the car before they list it on your platform. So if the person selling you the car allows you to

do that, just take that car to cars 24 or spinny, tell them you want to sell it with them and they're going to evaluate the car in every single detail which they're charging you the which they're charging the consumer 1.5 lakh rupees

from. So that's a hack where you can get

from. So that's a hack where you can get it done for free.

I think Spinny is going to change their policies after listening. Yeah, sorry

Spinny and sorry everyone that's watching.

Got it. So that's that's the way to look at it. Got it.

at it. Got it.

And there is another thing as well by the way. So when you buy a secondhand

the way. So when you buy a secondhand car, let's say you buy it from a dealer like a car garage or you buy it from a spinny, the margin that that dealer has on buying on selling you that secondhand

car. So they have a cost at which they

car. So they have a cost at which they buy it. Like let's say we're considering

buy it. Like let's say we're considering a 15 lakh rupee secondhand car which is let's say a Mahindra XUV 700. So let's

say you're planning to buy a Mahindra XUB 700 and you're buying it from a dealer for 15K. If that dealer bought that Mahindra XUB 700 for 13, they're selling it to you for 15 on that 2 lakh

rupee difference, you're going to be build 18% GST.

Okay?

Because you're buying it from a dealer.

But if you're on Ox and if you're buying it directly from a person like you and I that wants to sell their car directly, there's no profit margin on that. So you

won't be having to build you won't be build for GST. So this benefit also applies when you're buying from friends and family that you're saving the GST and also when you're buying it from a normal person on Ox.

All right. Because you know how to do the checks properly based on what you explained. Ox is the second layer beyond

explained. Ox is the second layer beyond friends and fam.

Yeah.

But beyond that, anything else?

After OX, I would recommend your local car garages. Now

car garages. Now they don't off they don't put the margins like what a spinny puts the local car garage.

Not at all. Because see you have to think about it. A spinny is a very large company.

also honestly they're probably larger amounts of space to park their cars. Like if you look at a spinny they

cars. Like if you look at a spinny they will pick up a massive parking lot within a mall or a massive BMC parking lot within Mumbai where they can put 500

1,000 cars and they can afford to not sell a particular car for a year or two years. But when you're talking about

years. But when you're talking about your local garage in cities like Mumbai in cities like mang Bangalore got where space is a problem they don't have that flexibility to not be able to sell

a car also they don't negotiate much they can't negotiate I mean it's not even about negotiation right it's about space so they have to sell their vehicles quickly and the faster they sell the more money they make so they're more interested in

speed of selling and they're also bootstrapped they don't have the option for funding so they want to sell their vehicles so their margins are always going to be significantly lesserly If a spinny is charging you 1.5

lakh rupees to a 2 lakh r margin, your local dealer might actually only be charging you 50 to 60,000 margin because they believe in volumes.

Yeah. And another thing is even with local dealerships. Now if you talk about

local dealerships. Now if you talk about buying a bad secondhand car, see when a local dealership exists in a particular locality, their brand image is at stake.

If they sell you a bad car, they know you're going to spread bad word of word of mouth for them. So they also have a great incentive and great experience.

They're experts in the field.

So they also have great experience of making sure that they're not selling you a bad car.

So you will spend a little extra. There

will be a margin in the middle because of their profit margin then the GST on that margin. So it's the second best way

that margin. So it's the second best way of buying a car after OX.

Got it. Got it.

In fact on OX a lot of dealers actually sell you their cars.

Yeah.

So okay. So from what I've understood is that no matter how much money you make, always go for a secondhand car to get the best value and to make a sound financial decision. But what would you

financial decision. But what would you say to somebody who is little bit very uh let's say a little bit um uh spiritual like they're like you know secondhand car somebody has sat in it

what if their energy is bad I want to go with the firstand car because of so and so reasons I don't mind spending extra.

So any hack for people for buying a firstand car?

Definitely a lot. In fact, people that have those spiritual reasons that they do not want to buy a secondhand car, I totally agree it. See, at the end of the day, buying a car is not just all about

logic and finances, right? It's a very emotional decision for almost every single Indian. It's a very

single Indian. It's a very passion-driven purchase that people make.

Correct. And plus the flex society flex, right? Like people will always say,

right? Like people will always say, "Huh secondhand."

"Huh secondhand." Exactly.

Right. Firstand car means like another level of respect. for some reason. It's

like passing CA exam. First attempt,

second attempt, right? The respect is much higher when it's firstand.

Exactly. So, when you have to buy a brand new first car, there are plenty of hacks. So, I'll dive right into it. So,

hacks. So, I'll dive right into it. So,

you're going to walk into a dealership.

Now, when you're buying a brand new car, right, the first thing that you need to understand is how does the dealership make money from you? That's the very first thing you want to understand if you really want to get a good deal out

of it. Now, this might actually be

of it. Now, this might actually be shocking to a lot of your viewers and to you. In fact, dealerships when they sell

you. In fact, dealerships when they sell you a brand new car, the amount of profit margin they're making on it is only between 2 to 6%.

That's it.

Lower than a bank FD.

Wow.

Now, answer this question to me, Shahan.

Would you start a car business if your profit margins were only 2 to 6%.

No, I would not.

You would park that money in an FD.

Yeah.

Which is the safest way to park your money? Like, forget SIP or anything. You

money? Like, forget SIP or anything. You

can park that in an FI in FD and uh make more money out of it. Now, why do you think anyone would open up a showroom if the margins are only 2 to 6%.

I'm assuming they make money on the upsells. Ex

upsells. Ex upsells is one way and u so let's begin with the upsells. Now, when you go to buy a car, you're not just buying a car.

You're buying insurance which is mandatory by the government. You're also

taking a bank loan.

Dealerships are going to try selling you accessories.

So, the very and this is an easy way to actually begin saving money. Like when

you're buying a brand new car, the on-road price that you actually see, let's take an example of a top end Mahindra XUB700 onro it's about 32 lakh

but you can easily buy that car for 28 to 29 lakh without even negotiating in the true sense of negotiation K please sir reduce 10% please give me discount

you don't have to do any of that I'll tell you exactly how you need to start breaking down on where they make that money so you go to a car dealership 2 to 6% margin then fine, none of your problem. Whatever they make is their

problem. Whatever they make is their issue.

Insurance, let's start with insurance.

The insurance that you buy with your car is the biggest place where they make their margins. If you're buying a

their margins. If you're buying a Mahindra XUB700 for about 32 lakh rupees, the insurance component on that car is 1.5 to 1.8 lakh rupees a year.

A year I mean you get 3 years of third party insurance in that. So it's not so it's two components own damage and third party insurance. Okay. by mandatory by

party insurance. Okay. by mandatory by law third party insurance is going to be for a period of 3 years and the own damage is going to have to be changed

year on year so 1.5 lakh to 1.8 lakh res is the insurance cost on that 32 lakh rupee xub 700 okay what if I told you you could actually

get that insurance premium down all the way to a 30 to 40,000 from 1.8 8 to 30 to 40,000 rupees.

I'm listening.

That's exactly what can happen if you use a website like Policy Bizarre. Log

on to Policy Bizarre. I'll tell you another thing.

That 1.8 lakh rupee insurance you're getting with the XUV700 is a horrible insurance policy to have.

Okay, remember they're trying to make their money right now off of you. They

don't get margins by selling the car.

So, what they're doing is they're inflating the price of the insurance and they're dropping down the quality of the insurance. M

insurance. M hence in that 1 lakh 80,000 insurance they want to squeeze as much money as possible.

So you go on to policy bazar select every single add-on you want every single benefit maximum IDV uh IDV by the way for those that don't know is the

insured declared value of your car. So

if you're buying a car worth 32 lakh rupees the X showroom would be somewhere about 25 lakh rupees 27 lakh rupees. The

IDV is how much value of your car you're covering. So on policy bazar select the

covering. So on policy bazar select the maximum IDV add every single add-on possible zero depreciation return to invoice no claim bonus the list goes on and on

and that top level insurance policy will still max out at about 60,000 for the XUB700 versus paying 1.6 lakhs to the dealer exactly now if you think 1.6 6 versus

60,000 you just saved 1 lakh rupees without negotiating and now you a lot of viewers might be thinking that no you can't do that the dealership will force you to buy an insurance from them not just that the dealership will say

that I will provide you better service than you getting insurance from somebody else that if anything happens to your car I will only figure out the insurance you know premium I will only figure out the insurance claim you know I have

better relationships with the insurance company so if anything happens rest assured I will make it free of cost for you because I know the insurance companies better than you know them.

That's what they will say.

Exactly why people are watching this podcast. See, at the end of the day,

podcast. See, at the end of the day, those are sales people. You're never

supposed to listen to a saleserson. I'm

a saleserson by profession. I can tell you how much we put into uh closing any particular deal, right? Uh so, when it comes to those type of objections, just remember they're just trying to sell you

an add-on service. When you're claiming insurance, your dealership has absolutely nothing to do with it. the

insurance company I mean is going to process your insurance at the end of the day in fact the pressure that they will try on you is not about they will tell you that sorry you're not allowed to buy

an insurance from anywhere else but me it's illegal that's the type of lie they will try telling you the very first thing but as per the government of India you have the backing of the government of India over

here you are not required to buy an insurance policy from the dealer yes before you take that car on the road, you need to have an insurance policy, mandatory by law. But you can get that

insurance policy on policy bazaar and while your car is going in for registration, you can give those insurance details and when you have your proper registration done, you will have your third party bought insurance ready.

So you don't have to buy it from the dealer.

M got it. So insurance I understood there's a large amount of savings that you can make when you buy a brand new car. Any other ways that I can reduce my

car. Any other ways that I can reduce my expense?

Yes. Uh so insurance was the first thing we spoke about. The second thing that dealerships are going to try to sell on top of insurance is accessories. They'll

try selling you special floor mats.

They'll try selling you. Oh, nowadays

the biggest thing that every car dealership is trying to sell their people, their customers is PPF, paint protection film, okay?

You know, like how you have scratch guards on your phone. You don't want scratches on your phone's display, right? So the first thing you do after

right? So the first thing you do after buying a brand new phone is put a scratch guard.

Gorilla Glass.

Gorilla Glass. Now that's 500,000. it

doesn't really make a big difference but PPFs are in general very expensive and when a dealership is trying to sell you that PPF again the same fun with the

insurance increase price reduce quality they're going to sell you the worst quality PPF for around 1.5 lakh rupees I'm talking about any car like even if you're buying a 15 lakh rupee car if you

go for the option of a PPF they're going to charge you between 1 to 1.5 lakh rupees now I'm not saying that PPF is bad right now BPF is a great choice The problem is when you're going to a

dealership to buy a car, right? You

already have such a huge flow of emotions going into you because you're making such a big purchase.

It's easy to convince you at that point in time, pay that one 1.5 lakh rupee extra.

It's a psychology, right?

It's psychology.

I'm spending 20 lakhs and if you're adding another lakh extra, I don't want to act like, you know, pennywise pound foolish.

Exactly.

I don't want to be that. Huh.

Now, they'll convince you because when you're buying a brand new car, you see the car, it's so beautiful, it's so shiny. They're like maintain PPF from

shiny. They're like maintain PPF from us. I'm not buy

us. I'm not buy accessory shop that same PPF you'll get for 70 to 80,000 rupees of the highest quality.

70 to 18 70 to 80 70 to 80 70 to 80,000 for the highest quality PPF. Low-level PPFs start at start off

PPF. Low-level PPFs start at start off at about 30 to 40,000 rupees. In all

honesty, the PPF that the car dealership is going to be giving you is mostly likely going to be on the lower quality anyway. If you go to an accessory shop

anyway. If you go to an accessory shop outside in the market, you can get it done on your own. You just have to wait a day extra.

Okay. Yeah.

Because you have to take the car out of the dealership and take it to that accessory shop. Another easy way to save

accessory shop. Another easy way to save another one lakh 1 lakh 40,000 rupees by doing your accessories on your own. So

the basic idea is don't let the car dealership upsell anything to you. So

this is what I do when I so I recently bought a brand new Kia Cyrus. All right.

How much is that?

It was a 15 lakh rupee compact SUV and I went to the dealership and no extra conversations nothing. I go

up to the dealership the saleserson I tell them I know exactly what I want and this is how I want it. I told the person x showroom price plus I mean the

registration taxes the TCS stamp duty that's it. I do not want insurance from

that's it. I do not want insurance from you. I do not want any extra accessories

you. I do not want any extra accessories from you. Absolutely no add-ons

from you. Absolutely no add-ons whatsoever. Now immediately what the

whatsoever. Now immediately what the dealership told me is that okay sir but um insurance policy like no I'll do that on my own. They're like okay now this is what they did which actually turned out

to become very valuable. He's like,

"Sir, just do one thing. Whatever price

you're getting from Policy Bazar for your insurance, just take a screenshot and send it to me with all the add-ons you want. I will match that price."

you want. I will match that price."

So, I won't charge you that extra. I

will match that insurance price and you will get the service that we can give you if any whatsoever. So, that's what I did. Also, what I was doing was I also

did. Also, what I was doing was I also like I also strategized when I'm buying the car. So apart from

the car. So apart from the dealership, you also what is that logic going at the end of the month?

Think about it, right? If you're a salesperson Shahan and you have a monthly target, when are you going to be running the hardest for your target?

The last week.

So you'll be desperate to get up to your targets to close those deals. And if

someone shows you interest of buying a car super quick, you're going to be likely to give them discounts to make sure that person doesn't leave.

He also gave me a small discount on the x showroom price. So from the 3% margin that Kia makes, he also gave me an additional 30% disc 30,000 rupee discount on the car over there because I

went at the end of the month.

That's interesting. So go at the end of the month to negotiate better with the saleserson.

Exactly. You should always go at the end of the month or during festive seasons like uh Diwali. M

or in fact not just that at the beginning of a new year because when you like ambitious day people want to buy something. Nope. That's what you

something. Nope. That's what you probably thought. But uh so when you

probably thought. But uh so when you like right now we're in 2025. Let's say

you go to any car dealership at the start of 2026. What's going to happen is that car dealership, let's take into consideration Mahindra again. Uh you go

into Mahindra January 2026. They're

going to have stock left over from last year which they did not sell. The

manufacturing date of that car is 2025.

Cars are emotional purchases. When a

brand when a buyer goes into the showroom, they don't want to buy a 2025 manufactured car in 2026. It's complete

psychology. The car is the same. It's

going to be good. But human psychology, right? It's 2026. I want to buy a 2026

right? It's 2026. I want to buy a 2026 manufactured car. Leaderships know this.

manufactured car. Leaderships know this.

So, what they do is all the cars that are manufactured in 2025 or are slightly older variants, they naturally discount it. They know it's not going to sell as

it. They know it's not going to sell as fast if they don't discount it. So you

will always get a very good discount if you buy last year's stock.

How much% discount?

You can easily expect a discount of let's if you're taking into consideration a Mahindra XUV 700. For

example, the on-road price is 32 lakh rupees, right? You can easily on the X

rupees, right? You can easily on the X showroom price of that car get about 30 to 40,000 savings. Now the X showroom is going to be about 27 lakh rupees. Easily

30 to 40,000 additional you will get off which is big money if you think about it. like 30 to 40,000 when you think

it. like 30 to 40,000 when you think about it on 27 lakhs might not seem big but at the end of the day 30 to 40,000 rupees is still a lot of money and remember they're not making much margins

they're only making a Mahindra only makes about 3 to 4% margin right so when you consider that 30 to 40,000 rupees is a huge amount as well and that's how much money you can save sometimes it

goes even higher so another thing is it also depends on how much that car sells overall so if a car is very much in demand it's going to attract fact, you know, it's going to have a certain

weight list to it. The seller is not going to be that motivated to give you a discount. But let's say you're buying a

discount. But let's say you're buying a one-year older model, manufactured model of a car that's anyway not selling very well.

I'll give you an example of a very popular car which many people love, but it just doesn't sell in India. The

Toyota Hilux. Now, the Toyota Hilux is a pickup truck from Toyota.

If you go online, the listing price is somewhere about 35 to 37 lakhs. But what

if I told you Toyota has been selling these cars for a 14 lakh rupee discount as well at times?

Wow.

You know why?

Cuz they don't sell.

They don't sell. Have you ever seen someone How many pickup trucks have you seen driving around in Mumbai?

I have not seen anything.

Nothing. Right. But it's a fantastic car. If you go to anyone in the Middle

car. If you go to anyone in the Middle East, uh, good and bad, you're going to see the Toyota Hilux used quite a bit. It's a very popular car, very good car, but because it

doesn't sell 14 lakh rupees off.

There's one more hack I've heard. I

don't know how much true this is. So

these dealers and these showrooms, they usually have these cars that they've kept for display, right? That people use for test drive. Is it a good idea to buy these cars once the year is over because

then they get the new models and in the older models which uh they just kept for a test drive, they I've heard that they usually sell it at a 10 20% discount.

What is your opinion on that?

Horrible way to buy a car.

Never ever ever buy a test drive car.

I'll tell you. So, in honesty, the benefit of buying a test drive car is that on paper, it has never been registered to any buyer. So, when you buy a test drive car, you're getting a

firsthand car technically, but in reality, it's been driven about 10,000 km, right?

When you go for a test drive, Shahan, you want to make sure you drive that car in every type of condition to make sure it performs, right? like you'll drive it. You'll press the brakes. You'll

it. You'll press the brakes. You'll

accelerate randomly. You won't care about that car because it's not yours.

It's a test drive.

You're abusing it. And that's what happens of the times when people are taking the test drive. So the 10,000 km that that test drive vehicle has been driven, guaranteed it's been driven

really bad. Why do people get scared

really bad. Why do people get scared when they buy secondhand cars? Because

they don't know how that car has been driven. Now with test drive vehicles,

driven. Now with test drive vehicles, common sense, people are abusing it. So

these cars are not driven well at all.

Another thing when you actually go to negotiate with a dealership that I want to buy a test drive car or a demo car, they don't really have that type of incentive to sell it for you to you. So

they're not going to give you a significant discount. Like they probably

significant discount. Like they probably give you like a 10% discount at best, which if you're thinking about let's say a 15 lakh rupee car, uh you're not even going to get a 10% discount if you're

buying a 15 lakh rupee car to be very honest. You'll probably save about 1 lak

honest. You'll probably save about 1 lak rupees on buying that demo car. But for

saving that 1 lak rupee car, you're getting 10,000 km of horrible driving.

Rather than that, just go to the secondhand market. The only benefit of

secondhand market. The only benefit of buying a demo vehicle is that firstand owner tag and you can tell them to fix all the paints and dents. You can ask them to give you extended warranty. You

can ask them to do a couple of servicings for free. But is that really enough when you really know that the car has been driven in a pathetic condition for 10,000 km? Not worth it in my opinion.

So, not a good idea.

Not a good idea.

Got it. So, now let's talk about taxes.

So, we have a lot of taxes which comes into it and a lot of people don't really dig into this because it's boring, right? We are like, okay, the government

right? We are like, okay, the government is going to charge so how am I going to optimize this and save money for myself?

So can you like educate us about the different types of taxes when you purchase a car and how exactly can I minimize it and save a lot of money to myself and make the smart choice.

Got it. Before that I want to ask you a question.

Yeah.

When you think about buying I'm not even talking about the imported cars. When

you think about buying let's say a normal car which a normal consumer would buy. Let's say uh 10 lakh rupee swift

buy. Let's say uh 10 lakh rupee swift desire. How much tax do you think a

desire. How much tax do you think a buyer of a score swift desire is paying?

I don't know 20%.

20%. What if I told you that even for a entry-level car like the Maruti Desire, the taxes that the person is paying is around 60%.

What?

Yeah.

60%.

Around 60% for a Maruti Desire.

Yep.

That's what the taxes are. Look, that's

what the taxes look like. Let me break it down for you. Okay. Okay. Now the

world of taxes around cars is actually a very complicated thing and not a lot of buyers know this. In fact very few people I would say 1% of the people know about these things in reality. So there

are multiple slabs. The very first thing the very first thing that comes into picture when you're buying a car is GST.

Now we all know GST. Now when it comes to petrol diesel vehicles I'm talking about your internal combustion engines, your ICE vehicles. Standard GST applies

across all types of vehicles, 28%.

Now, when it comes to GST, who makes the money? The central government. Right

money? The central government. Right

now, the states had a problem with that.

They're like, if this because the GST structure came in, the states are like, okay, now we're not making money off of these vehicles. All the money is going

these vehicles. All the money is going to the central government. What about

us?

So, in comes GST compensation cess. The

compensation in GST compensation sess literally means compensation for the state government.

Okay.

Now the GST compensation says is actually applied based on two parameters. The size of the vehicle and

parameters. The size of the vehicle and how powerful the engine is. Basically

CC. Any car with a length of lesser than four meters and an engine of lesser than 1.5 liters has an has a GST compensation

says of 1% if it's petrol or 3% if it's a diesel vehicle.

Okay.

Now this is on top of GST. So let's say you're buying a desire. Now a desire is lesser than 1.5 L. It's about a 1.2 L engine and the length of the car is

lesser than 4 m. It's a let's say you're buying the petrol desire. That's a 1% GST compensation says on top of 28 that becomes 29%.

If you consider let's say the Honda City. Now the Honda City is longer than

City. Now the Honda City is longer than 4 m and it has an engine capacity of 1.5 L.

What do you think the GST compensation says there would be?

So normally you said it's 28 + 1 1. If it was lesser than 4 m

1. If it was lesser than 4 m say 28 + 5 5 no suddenly it draw goes up all the way to 17%.

Almost half of the cost of the Honda City is tax and I'm just talking about GST and GST compensation says right now we're yet to come to registration taxes, road taxes, TCS. We're still to come to that.

TCS. We're still to come to that.

Now the moment you start thinking of a large SUV, let's think the XUV 700 or let's think the Fortuner.

Suddenly now these cars have engine capacities of more than 1.5 L and they're also more than 4 m in length. M

the GST compensation says on a SUV like the XUV 700 or the Fortunor is 22%.

28 + 22 50%.

Okay.

So XUV 700 uh 32 lakh rupees onroad we were talking about it the X showroom is somewhere about 26 27 13 lakh rupees from that 26 lak straight to the government.

Wow.

So I like calling this term the true value of a car when you're going to buy a car. Right. I told you not a lot of

a car. Right. I told you not a lot of people are aware about the taxes that go into a vehicle. I like calling that term true value. When you're comparing any

true value. When you're comparing any products based on price, you usually comp most of those products usually don't have these high level of taxes and you're fine comparing them based on MRP.

But when you're comparing cars where the taxation is 50 to 60%, you don't want to compare two cars with each other based on how much tax you're paying. Take away

the taxation of that car and compare it based on what the true ex showroom price is. Strip it away of all the taxes.

is. Strip it away of all the taxes.

That's the term I like calling it the true value of the vehicle.

Wait, I'm I'm still shocked by this. So

the Mahindra XUV, which is a 28 28 or 32 lakh car, 32 onroad, 37 x showroom.

So okay, so let's say 32 lakh car, you're saying out of that Mahindra gets only 14 lakhs.

Yeah.

Right. So they get to keep only 14 lakhs in their bank account and the rest they have to send it to Nirmala ma'am.

Yep that's correct ma'am.

Now this is just GST and GST compensation says which goes all the way up to 50% when you add it together. On

top of this in a state like Maharashtra you pay between 11 to 13% additional on road tax.

There's also a 1% TCS if you're buying a car worth more than 10 lakh rupees. M

now you can claim that TCS back when you're filing your income tax refund but at least up front you're still paying that 1% TCS right so you can just see there are four to five different taxes on top of that a

mandatory insurance is good for you so let's exclude that from this conversation so let's go back to the desire that we were talking about the egg showroom of that 12 lakh rupee

desire will be somewhere about 8 lakhs 8 to 9 lakh rupees now from that 8 lakh rupees we already know that 29% of it has gone into taxes which is about 2.4 4

lakh rupees in your GST and your GST compensation says another thing we know is from that 8 lakh rupees you're also going to have to pay close to 13% on u

registering that car to make it street legal that's another 1 lak rupees so on that 12 lak rup car you're paying close to 4 lak rupees in just taxes around 50%

of the x showroom has gone in taxes oh my god on a desire let's let's talk about the math for a very popular car okay let's do my car then we'll go to some other car.

Yeah.

Mine is a Volkswagen TYGO.

Mhm.

For which I pay 22 lakh.

Okay. What how much tax did I pay?

So now actually folks the car you have the TYON it's actually uh it has two different layers. It's a very good car

different layers. It's a very good car if you want to be smart about your taxes. Now when we were talking about

taxes. Now when we were talking about GST and GST compensation sess I told you that it starts off at the 1% slab if the car is less than 4 m and if the car has

an engine of lesser than 1.5 L mine is what all less only or more your car because you paid 22 lakh rupees I'm assuming you have the top top end tun so you you probably have the 1.5 L

one and that means that you came under the 17% GST compensation says but what if I told you that you could have bought the same car at a 1% GST compensation says by going for the lower variant.

Yeah. You didn't know about this when you bought the car, did I? I didn't know. This is 3 years back.

I? I didn't know. This is 3 years back.

And then it also comes with the the what is that?

Sunroof which only comes in the top end.

A sunroof in a city like Mumbai is already very hard to maintain. We'll

have to talk about that on another day.

But uh great you paid 17% GST compensation says for the sunroof. But

so both Folkswagen and Skoda, they're sister companies, the Kushach and the Teun, they both also have a 1 L turbocharged engine. Now, let me rub

turbocharged engine. Now, let me rub some salt in your wound.

1.5 L you would have bought, you'd be like, "Okay, this is going to perform better than the 1 L engine." But that 1 liter engine is a turbocharged engine.

So the turbocharged engine, 1 liter turbocharged engine which is giving you a lesser GST compensation says. What if

I tell you that that engine actually performs as good as your 1.5 L naturally aspirated engine because of the turbocharger?

Because of the turbocharger.

It sucks in air faster because of that.

More torque, all of that, more salt in your wounds.

But they didn't tell me this.

They didn't tell you this. And you

didn't know me back then.

Yeah. So this is the game. So if you want to save on the GST compensation but then you're like okay but the engine is going to be smaller. Look for an engine with a turbocharger in it. So then I

still get the performance like a larger engine and also avoid paying that higher tax because the government hasn't made the rule that oh if turbocharger is there then also I have to pay tax.

So what happened was Shan now when the government launched this policy of GST compensation says manufacturers got innovative with it. A lot of manufacturers that sell a lot of cars, I'm talking about Hyundai, I'm talking

about Kia, I'm talking about Schoda, I'm talking about Volkswagen. What they did was they started releasing cars which are compact SUVs. This is actually why there are so many compact SUVs in the Indian market today because

manufacturers are flooding the market with them because they make more sense taxation wise.

If there are incredible taxes on cars, even the manufacturers lose out because they're not going to sell that many vehicles. People won't be able to afford

vehicles. People won't be able to afford them. So, the manufacturers got smart.

them. So, the manufacturers got smart.

What they did was we're going to make compact SUVs. They're lesser than four meters. We're going to make them

meters. We're going to make them spacious inside. So that's taken care

spacious inside. So that's taken care of. We'll make sure that let's say the

of. We'll make sure that let's say the trunk is smaller. So they'll get massive cabin presence. On top of that, we'll

cabin presence. On top of that, we'll give you a 1 L engine. You're getting

taxation benefit there, but we'll turbocharge it. Now, a naturally

turbocharge it. Now, a naturally aspirated engine is better in terms of reliability and longevity than a turbocharged engine, but not a lot of people know all of these differences.

And the turbocharged engine at 1 lit is going to save you money.

So let's do one last tax exercise before we move on to the next topic. Let us

look at some very popular car which is the Mercedes-Benz E-Class which is like the uh you know like the the dream car for every rich man like how do I look at the taxation there?

Okay, so the MercedesBenz E-Class luckily is manufactured in India. Um so

there are different taxes that also come into picture if you're fully importing a vehicle or if you're importing uh parts of the vehicle and assembling it in India. So there are different taxes that

India. So there are different taxes that come into that. But the Mercedes E-Class is fully manufactured in India. So

that's taken care of. So the taxation is simple. 28% GST. It's a powerful luxury

simple. 28% GST. It's a powerful luxury vehicle. So 22% compensation says takes

vehicle. So 22% compensation says takes it to 50%. U 11 to 13% road tax if you are buying it in Maharashtra. 1% TCS

because it's above 10 lakh rupees. These

are the type of taxes that go into it.

So around 65 64%.

About I mean when it comes to the road tax of 11 to 13% and that yeah it goes up to about 60 to 65% that you're paying on top of it.

So 1 cr car actual cost is 40 45 lakhs.

In fact u I was doing the math for a Mercedes E-Class just the other day. You

pay 1 cr for the Mercedes E-Class. the

true value of that car is actually just 40 lakhs.

So yeah, 60% of that car is going in taxes.

And what happens when you import a car?

Let's say when I get a Ferrari or a Lamborghini, how much of that is actually tax? Like it's a it's a 5 cr

actually tax? Like it's a it's a 5 cr Lamborghini.

How much of that is actual tax?

When you buy a Lamborghini or a Ferrari, you're making the government really really rich because there's about 125% to 150% additional taxes just to bring it over to India. No, but if it's

already there in the showroom of Lamborghini, it's already put in that price already put.

It's already done because the showroom of Ferrari has imported it from a particular country, maybe Italy. So

maybe they've imported it from Italy and that cost has already been factored in.

So the 125% tax that gets applied, it actually gets applied uh to the price of the vehicle in the home country plus the charges they paid for the freight. So all the

shipping costs everything that went into bringing that car to India the final container price on top of that they put those 125% 150% taxes and then they sell it to you.

So how much of it is taxed then? Like

so if you're buying a 4 cr Ferrari the true value of that car is only about 1 and a half to 2 crores. In fact if you buy a 4 cr Ferrari in India you can get that same Ferrari in Dubai for about 1.5

crores.

Really?

Yeah. Sounds unfair, right?

Very unfair. Those guys are richer also with the oil. You don't even have to pay tax over there.

Habib, come to the No income tax over there. We not even talked about income tax money. After

that, we are buying these cars.

Oh, if I start getting into income taxes, Shan, you're going to lose your mind because in order to buy any car, first you have to also pay close to 30% income tax to the government. So, if you want to buy a 30 lakh rupee car, you

first need to earn 40 45 lakh rupees to pay that. Yeah. Damn. And these these people who buy these cars, they're obviously also taking loans for tax benefits, right? So if I'm buying a

benefits, right? So if I'm buying a Maybach at 2 and a half crores, I need to be earning at least like 20 lakhs a month to sort of afford these kind of costs. Like who are these people buying?

costs. Like who are these people buying?

If you're buying a 2 1/2 cr car, then you don't need to be owning 20 lakh rupees per month. I would say you probably need to be making about 50 to 60 lakh rupees per month. That's

consider it, right? So ideally if you're thinking about the 2410 rule now 20% of the car in terms of the down payment so that's 50 lakhs on 2.5 crores you need

to be putting down uh so 2 crores loan you have to take which you have to pay over 4 years and that installment should only be 10% of your income right

so if you're taking a 2 cr loan over 4 years at uh 10%. So when you're thinking about after doing the maths on that S-class the monthly EMI would be about

five lakh rupees per month on that S-class per month. Now if you're spending five lakh rupees a month ideally you need to be making 50 lakh rupees a month like I said before. So if

you're making 50 lakh rupees per month you can then afford to buy it in that way. But then again when we're talking

way. But then again when we're talking about an S-class it's not a normal person that's buying it.

It's the extremely wealthy that are buying it.

Okay. So then okay I understood about everything about tax optimization. Uh

now I want to go into a very interesting topic which is obviously credit cards right I see a lot of videos out there about credit cards. You know your best friend Ali Hajjani talks about using a credit card to purchase a car.

Uh anything that you can share on that front to reduce the cost of my car purchase using a credit card.

So all right uh let's talk about how you can buy a car using your credit card.

This is actually one of the ways that I always advise anyone that tells me that they're going to buy a brand new car.

Sometimes even secondhand cars if you're buying it from a platform like Spinny because it works there. Uh in fact Ali when he bought his car from Spinny he used his credit card to buy it and he got a lot of points. But let's say you

go into the showroom you're buying a brand new Volkswagen Tun for 20 lakh rupees.

Now 2410 rule means that you have to put 20% down payment on that 20 lakh rupee car which means that you have to pay a down payment on four lakh rupees. M

so when you're saying buy a car using your credit card you're not paying the entire 20 lak using your credit card you just have to pay your down payment now your down payment comes down to about 4

lakh rupees now a lot of people don't actually have the credit limit to make a transaction of 4 lakh rupees so at this point in time you might want to use multiple credit cards depending upon

your credit card stack to actually enable you to make these transactions but why are we even talking about using a credit card uh to pay for the down payment. Well, the reason is when you're

payment. Well, the reason is when you're paying 4 lakh rupees down payment for that car, if there is an opportunity to make money and get free hotel rooms or free flights uh through the points that

you earn on the card, why not? We're all

Indians. We love a good discount. We

love freebies. And the same should also apply when we're buying a car, right?

So, the idea is simple. You use your credit card to pay for the down payment.

Now, the ideally preferred cards to do this is the American Express Platinum Travel, which unfortunately is not in circulation anymore for the time being because AMX has paused it. But since for people that already have the AMX

Platinum Travel, I think we only broke the system.

Maybe.

So, if you have the AMX Platinum Travel, when you do the math, you get about 48,000 rupees worth of hotel stay if you spend four lakh rupees on that card for your down payment. If you use the access

atlas, which is my second favorite card.

Yeah, I use that. Yeah.

Yeah. Even I have that in my wallet.

Even on the access atlas, after you do all the conversions of the points, you'd get about 30,000 rupees worth of free hotel stay. Now, that's basically what

hotel stay. Now, that's basically what happens. Now, it's a very simple fun. If

happens. Now, it's a very simple fun. If

I just tell you next time you go to buy a car, use your credit card to make the transaction. But there are certain

transaction. But there are certain things which people need to be aware about. First of all, when you're swiping

about. First of all, when you're swiping your credit card at a car dealership, chances are that the POSOS machine that they have is tagged under insurance as

per the bank that gave them the POSOS machine. So, the first thing that you

machine. So, the first thing that you need to do is you need to make a test transaction and then you need to check on your statement or call up your credit card company and find out from them if

that transaction came under a dealership or if it came under insurance. If it

comes under insurance, you're not getting any points for it because insurance is an exclusion with almost every single credit card that I'm aware about. Uh

about. Uh so that's one of the first things that you need to check.

The second thing you need to check is what is the daily points limit that you can get for a transaction. Now you'll

get all excited. Uh the POS machine is not coming as insurance. It's coming as a normal dealership. I have a 4 lakh rupee credit card limit. There you go.

Free hotel stays. Then you find out that your credit card company is very smart.

They have said that the maximum monthly cap or a daily cap maximum you can get is 5,000 points. So you go home thinking that oh wow I just earned myself two nights at the Taj and you see that

you've gotten yourself half a day at a no. You're not going to be very happy

no. You're not going to be very happy are you?

So the second thing you need to do is you need to check uh with your bank what if there is a daily limit. Now the

American Express Platinum Travel or the Access Atlas both as far as I'm I know for a fact that American Express does not have any daily limits and as far as I'm aware about the Access Atlas even

they don't have any daily limits for earning points. So these are ideally the

earning points. So these are ideally the two best cards. So you check for two things the daily limit on points you check if it's coming under insurance or not. And if these things are clear um

not. And if these things are clear um and if you have the credit limit, if you don't have the credit limit, use multiple credit cards. Some points are better than no points. So use multiple credit cards. You might not get two

credit cards. You might not get two nights at the Taj, but you will get still something. And why let you know

still something. And why let you know you there's a rule in business. Never

let go of any money on the table.

If there's money on the table, you need to take it. That's exactly what you do.

It's just about being a smarter spender.

So you can get some good money back if you use your credit card to pay your down payment of a car. Got it. So that's

what basically for the down payment of the car, use the credit card, get those points. Yes. And next time you're going

points. Yes. And next time you're going on a vacation, use those points to book the hotels and the flights on the credit cards website. What if I in fact told

cards website. What if I in fact told you that just picture this situation, right, Shahan? You go to buy a brand new

right, Shahan? You go to buy a brand new car. Let's say you're buying a brand new

car. Let's say you're buying a brand new XUV 700 and it's a special occasion. Uh

you're going there with your mom, your dad, your partner. Now you've bought this car and what if I tell you that immediately you can take it for a nice road trip to Goa and celebrate with your

family, stay at the Taj for two nights free of cost.

That's possible with the credit card, right? So you basically get to celebrate the experience in a much better way.

Now talking about cards, there is another interesting use case for these credit cards when it comes to car which is your fuel expenses. If you have a petrol or a diesel vehicle, I was just

recently checking my own fuel expenses per month. I'm spending about 25,000

per month. I'm spending about 25,000 rupees on petrol.

Yeah.

Is there a way to reduce these expenses?

Because you know, petrol keeps getting more and more expensive because we import all of this petrol, right? And it's just going to

petrol, right? And it's just going to get more and more expensive for people.

So, is there a way for me to reduce these expenses using any hacks that you know for a fact? So you know Shahon in total I probably just like Ali and I probably have about 15 to 20 different credit

cards but most of them sit at home and I only keep four credit cards in my wallet at any particular point in time. One of

them is my BPCL Octane card.

Now this is an SBI BPCL Octane credit card by SBI. Now this is in partnership with SBI and Bhat Petroleum. Now what

this card basically does for you so it gets you in total 6.25% 25% value back every time you fill fuel. So you get

about a 5 5.5% discount in terms of points and you also get a fuel uh transaction waiver of about 1.5%.

So you're getting about 6.25% back every time that you fill fuel at a Bat petroleum petrol pump using the BPCL Octane card. Now there are certain

Octane card. Now there are certain things which people need to be aware about. There are other cards as well

about. There are other cards as well that do this. For example, there's a card from RBL uh that's partnered up with Indian Oil. Uh Hindustan Petroleum also has some partnerships with credit

card companies. They have a partnership

card companies. They have a partnership with American Express as well where you get multipliers in terms of points. Now,

each one of these credit cards actually has a cap. So, just like you, even I fill fuel of about 25,000 a month because I have to use it to travel 55 km to and fro from work every single day.

So, my fuel bills 25,000 rupees a month.

Now on my BPCL SBI Octane card, there's a limit of 10,000 rupees to earn the points. So every month up to 10,000

points. So every month up to 10,000 rupees on the BPCL SBI Octane card, I get about 6.25 6.5% cash back in the form of points which I can use at that

POSOS machine in the future while filling my fuel to get a discount on my uh fuel purchase based on how many points I've collected. So that 6.25% 25%

it keeps accumulating and the next time you're filling fuel you can use that accumulation to get a free fuel tank but there are limits that you need to be aware about on the BPCL Octane card

that's 10,000 rupees per month on the RBL card which is partnered with uh Indian Oil it's about 12,333 rupees per month the cafe fuel expense

yes of fuel expense so what I do in my case is I have a multiard strategy so I use the BPCL Octane for the first 10,000 0 worth of fuel after which I use my

American Express MRCC card. Now you'd be wondering I didn't mention American Express before. So I'll tell you how the

Express before. So I'll tell you how the MRCC works. Basically when you do four

MRCC works. Basically when you do four transactions of 1,500 rupees each on the American Express MRCC card in a particular month you get an additional

1,000 points which can be worth about 1,000 rupees.

Right? So technically you're spending 6,000 rupees and you're getting 1,000 rupees worth of points from American Express which can be used for a hotel later on.

That's 16% returns.

That's 16% returns for that particular amount of fuel. So till 16,000 I have my fuel taken care of. I'm always getting some amount of money back or some amount

of points back after which I pay fuel full price which does hurt but uh I'm a finance guy. So, even when I'm traveling

finance guy. So, even when I'm traveling to and fro to work, I figure out car pooling where whoever travels with me has to pay me.

Got it.

I'm pretty sure that person is watching this podcast.

Thank you.

No, that's interesting. So, most normal credit cards don't give you points on spending on fuel, right?

In fact, they charge you extra 1.5%.

Right. Search charge. They charge

search charge.

But you're saying using these two cards, you can actually get some returns on your fuel expenses. So you wave off the search charge of around 1.5% that these

other credit cards charge and you also get about 4.5 to 5% back.

Mhm. Got it. And that's how do you redeem that in fuel?

Very very simple. So when let's say I'm filling fuel today. All right. I'm going

to use my credit card to fill fuel worth 4,000 which is full price for my car.

The next time I go to fill fuel, I'll be able to get that discount of like say since it's only one fuel purchase, but the next time I go to that fuel station, I will tell the person that's filling my

fuel, here's my credit card. I want to pay using points. So that person, he will swipe my card on his POS machine, all the petrol pumps have their POS

machines configured by the partnership bank to have the option of paying with points. So there will be a pay with

points. So there will be a pay with points option on their POS machine. They

will click that. They will redeem whatever points you have and that's the discount in fuel.

Oh, they'll only do it.

They will only do you have to do nothing. It's the easiest way to redeem

nothing. It's the easiest way to redeem points. Literally the easiest way.

points. Literally the easiest way.

So basically, you're like if you use the right credit cards for fuel. So out of 12 months of expenses of fuel, the 13th month can be free. Yeah.

If you use the right credit cards. Got

it. Now let's go to a major expense which most people just take it for granted which is like taking a car loan, right? because 99% of them cannot buy a

right? because 99% of them cannot buy a car up front. I mean, it's a 20 lakh car, 25 lakh car. I don't have 25 lakh sitting in my bank account to just buy it up front. So, everybody inadvertently

goes for a loan. Now, these loans can be as little as 9% when it's a brand new car.

But what you said earlier is that it's always better to buy a secondhand car no matter how rich you are, right? Because

of the so many benefits that you get, instant 30% off and all of that. But the

loan is where people get screwed, right?

Because even banks are cautious now. I

have to, you know, give a loan to a guy who's buying a secondhand car which is 5 years old. So the interest rates

years old. So the interest rates naturally go up and the interest rates for a secondhand car is about 14% 16%.

Now this is an expensive loan. Is there

a hack for this? Because I don't want to pay a 14% interest or a 16% interest rate loan. So what's the hack? Now the

rate loan. So what's the hack? Now the

interesting part Shahun is that there are actually quite a few hacks when it comes to your bank loans which many people are genuinely not aware about and they're very very simple. Now you know

you were speaking with me about how I'm such a massive person in favor of secondhand cars but as you said the loans on a secondhand car can range between 11 to 16%. But what if I tell

you that you can actually profit off of that uh car loan that you're taking profit?

You make more money than you spending on your interest.

I would say you're full of Okay, so let me tell you exactly what my story is. Now I own a secondhand Honda

story is. Now I own a secondhand Honda City. Now I'm making about like if you

City. Now I'm making about like if you talk about my CTC, I'm in the 50 lakh rupee range right now. So ideally I had saved up a good amount of money like I had about 20 to 25 lakh rupees with

using which I could have bought a brand new Honda City outright.

But knowing basic finance, I know that that's not a good decision. like why

would I want to spend 20 to 25 lakhs of liquid money on buying a depreciating asset? Makes no sense.

asset? Makes no sense.

Apart from that, I was convinced that I want to buy a secondhand car because I want to punch above my weight and I also want to carefully plan my finances. Like

just because I have that money, just because I make a good amount of money, it doesn't mean that I should just blow it away on a depreciating asset. So

here's what I did. I bought a secondhand Honda City which was costing me about 17 lakh rupees. I had about 20 to 25 lakh

lakh rupees. I had about 20 to 25 lakh rupees in my bank. So what I did was I went to SBI. I made a senior citizens FD in the name of my dad for about 20 lakh

rupees. The next thing that I did was I

rupees. The next thing that I did was I went to the bank and I told them this is my FD. I want a FDbacked loan from you

my FD. I want a FDbacked loan from you for 17 lakh rupees. And uh so what I did was backed by that FD I took a personal loan for 8.5%.

Okay.

Right. So, when you're buying a secondhand car, usually the loan amount is only 11 to 14% or 11 to 16% if you're taking a used car loan.

But I'm not taking a used car loan. I am

taking a FDbacked personal loan and it's backed by a collateral, right?

So, the bank is going to give you 85 to 90% of that FD amount to take as a loan.

So, that's exactly what I did. I take I took 17 lakhs from that and I put it entirely towards my secondhand car. Now

the 17 lakh rupees loan is what I'm paying over a period of 3 years. Over a

period of 3 years, I've done the math.

The interest that I'm paying on my 17 lakh rupees is about 2.5 lakh rupees.

But the 20 lakh rupe FD that I made is giving me a little over 4 lakh. And see

now this is just one of the hacks. Now

let's consider another situation where you have bought either a brand new car or a secondhand car and you have gotten into a loan with bank A which is let's say HDFC. Now when you bought that car,

say HDFC. Now when you bought that car, you had a certain salary, you had a certain credit score. After 1.5 years into that car loan, your credit score has increased as has your income.

There are options which you can even find on a platform like policy bazar to transfer your bank loan from one bank to another. Think about it just like how

another. Think about it just like how you're negotiating your CTC when you're switching one company to another.

Company B pays you 20% hike and your appraisal at your current company is only 5%. What do you do? You

switch.

Do not listen to me.

What do you What do you do?

You switch. Same way bank loan, you're paying 10% on uh your current bank with your current you're paying 10% interest with your current HDFC loan. If SBI

comes tomorrow and tells you that I'll do it for 9.5% or 9.25%, that suddenly becomes a very interesting choice. Now,

there are a couple of things you need to consider here and I'll tell you how it happens as well. Well, when you're foreclosing a loan, there will be certain foreclosure rates which is usually around 1 to 3% depending on the

bank and depending on your terms. So, you have to calculate how much is that foreclosure. Another thing which you

foreclosure. Another thing which you need to calculate is the processing charges that the new bank is going to charge you. So if the processing charges

charge you. So if the processing charges and the foreclosure rate is lesser than the amount you're saving by switching your loan, you'll get all the calculations from the bank of how your

how much new interest you'll be paying, what your EMI will be.

If that difference is profitable, you switch your loan and it's very very simple. Now you might think, okay, okay,

simple. Now you might think, okay, okay, I'll have to take a loan, then I'll use that money, go to my bank, pay that money to them, and close that loan. You

don't have to do anything. So if you're moving from HDFC to SBI, SBI will actually pay off your remainder loan with HDFC and that's all that it takes.

No money enters or exits your accounts.

HDFC and SBI settle it amongst themselves. You pay the foreclosure rate

themselves. You pay the foreclosure rate and you pay the processing charges and suddenly your interest rate has dropped.

No, but you mentioned something. You said

the foreclosure could be 1 to 3%.

Mhm.

So does that mean that I only shift if the reduction in interest rate is more than 1 to 3%?

No, no, no. So the 1 to 3% foreclosure rate that you're paying is dependent upon how much principal amount is left and that's not very high. So let's say you've bought a 20 lakh rupee car after

2 years you have let's say 15 lakhs left to pay on it. If you think about a foreclosure rate of let's say 2%. Okay

that's about what 30 uh 15 30,000 30,000 rupees. So 30,000 rupees

30,000 rupees. So 30,000 rupees foreclosure rate and uh there will be about 2,000 to 3,000 rupees processing charges. So about 35,000 is what your

charges. So about 35,000 is what your cost is. But when you factor in the 0.5%

cost is. But when you factor in the 0.5% that you're saving year on year for the next four, five or 6 years, that becomes a significant amount of savings. And in

90% of the situations, changing your bank loan to another bank is always going to be profitable. Now many people do not know this hack and it also sounds very cumbersome, but remember banking is

also a very competitive market. In fact,

I want to add a point here. For

absolutely every single hack that we are discussing in this podcast today, you just need to have a common sense of how business works, how competition works, and you in your own mind will be able to

figure out a lot of a lot of tactics. If

you can understand how sales people are working, how competition is working, how business functions in the real world, half the hacks will automatically open up within your eyes. banks, competitive

industry, they want to serve your loan instead of their competition. So, they

are going to give you a discount to bring you over.

When you have a SIM card, a post-paid SIM card, if you're using Airel and if you tell Vodafone that you want to port, they will give you a better offer. And

Airel to keep you back will tell you, "Oh, you were paying $7.99 today. I'll

make it $5.99. Please don't leave us."

Yeah. Yeah.

Same principle.

Got it. Got So this is another way in which people can also make their loans cheaper over a period of time.

So this is especially for people who had a higher interest rate because they had a bad credit score. Couple of years later things got better, earning more money and my credit score credit score improved. It's a opportunity for them to

improved. It's a opportunity for them to lower their interest rates on their car loans as well. Correct.

Exactly. Now let's talk about u a very interesting um feature that some companies provide their employees which is like the it's called like the car lease option right

corporate lease corporate lease option not all companies give this and it's not given to all junior employees but once uh employees reach a certain level in the

organization I think manager and above that's when the uh company sort of offering this to their employees to retain them or something I briefly read about this but would love to know about the details of this.

Yeah. So, in my opinion, corporate leasing is hands down one of the best ways to buy a car and I'll tell you exactly why. Now, the way that it works

exactly why. Now, the way that it works is you your you will talk to your HR.

Your HR will tell you, okay, we have a corporate leasing policy available and we have a tie up with a company called Orex. Orex is a car leasing platform.

Orex. Orex is a car leasing platform.

You select the car that you want. The

company will take that car on their name. They will lease it from Orex. It's

name. They will lease it from Orex. It's

basically a trierson contract. So the

contract will be between Orics and your company and your company and you. Now

let's say you've picked up an XUV700 on a corporate lease and the monthly lease of that car is 50,000 rupees per month.

So when you're paying 50,000 a month in a year that's 6 lak right now let's say that your income is 30 lakh rupees per year. If you're buying an XUV 700 then I

year. If you're buying an XUV 700 then I would hope that your income is around 30 lakh as well. Now that 6 lakhs that you're paying if it had been a car EMI that 6 lakh rupees would have left your

pocket you would not get a single penny of benefit from it. But because this is a corporate lease that 6 lak rupees immediately becomes a deduction in your income. So 30 lakhs is your salary 6

income. So 30 lakhs is your salary 6 lakhs cut 24 lak is now what your taxable salary is as per the current tax labs that 6 lakh additional component

would have a 30% tax rate on it. 1.8 8

lakh rupees saving for every single year that you're in that corporate lease.

Wow.

When you're taking a car on loan, you're paying interest out of your pocket 10%.

Over here, you're saving 30% in uh straight up taxable income. Now, there

are a couple of things you need to consider here when you're taking a car on lease. The lease uh the lease that

on lease. The lease uh the lease that you're paying per month is more than the EMI that you would be paying on your car. But it comes with benefits.

car. But it comes with benefits.

Taxation being the number one benefit.

Second benefit, there's no headache or stress for anything related to that car.

So, normally, let's say you're driving on Western Express highway, someone rear ends your car, you'll get out of your car door, you'll start fighting, pay me, pay me now. If you're, if you have a car on lease, you don't have to worry about

anything because that's not your headache.

It's the corporate, it's the company that has leased it. It's their problem.

You have an insurance policy. The

insurance policy will settle the claim and uh the lease company will ensure that it's uh paid off as well. So none

of that even maintaining the car you don't have to pay for the maintenance annual maintenance year on year you don't have to pay for any damages accidents anything absolutely every single thing is taken care of in that

subscription amount that lease amount which you're paying month on month another thing people might be wondering what happens at the end of the lease term I have to give that car back be like I don't own this car right like

because it's on a lease so people would argue saying that I don't own this right so what's the point of doing this now again let's go back to that point which I made earlier once you start thinking business once you start

thinking common sense every single thing suddenly becomes a lot more logical for you and the same thing with corporate leasing once you have used that car for 5 years both the company that has leased

it or your company that you work for both don't have any incentive for taking that car back from you and keeping it there's no benefit why take it so they

give you the option to buy that car for as low as 5% to 10% at maximum value of that car's price. So yeah, so we were considering the XUV 700 30 lakh rupee

car 5% of that is what 1.5 lakh rupees.

Yeah.

Yeah.

They let me buy it at 1.5 lakh rupees.

Yeah.

After after how many years?

After the lease term, which is usually 5 years, 3 to 5 years is the lease term.

Now you'll be wondering why are people doing this? But think about it. If your

doing this? But think about it. If your

company has put you onto a car lease for a period of 5 years, in their mind they feel that they've secured you for 5 years. M

years. M so if offers you 30% extra now you suddenly have an extra incentive in your mind I have a corporate le going on with such a

nice car screw the 30% I'll stay back and when you're a high stakes employee you know we're hearing about these days how meta is stealing employees from open AAI

left right center by paying them $100 million bonuses when you're a high stakes employee at a senior leadership your company does not want to lose you and these These are small tricks that they can use to to retain you

retain you. So talking about leasing um

retain you. So talking about leasing um in the US you know leasing is very very popular very popular and what people end up doing is that they keep switching their cars every year right because people want to

experience different different things like for example let's say I can't afford a Ferrari right there are some companies in the US which will allow me to maybe you know subscribe to a Ferrari for a few months

so I get that joy you know burn a hole in my pocket but not impossible for me to experience the feel of a Ferrari.

Yeah. Are there options like that in India where I can keep switching cars on a subscription?

There are multiple options. Uh leasing

is definitely one way which does enable you more than buying a brand new car without lease to switch cars because I mean if it's a 5year lease at the end of it, you don't have to buy back that car.

You can just lease another one. In fact,

on platforms like Orex, you can also lease a car directly from them, but then the same tax benefits do not exist. So,

it's always better to do it through a corporate corporate. Now there's also

corporate corporate. Now there's also options of actually buying cars using fractional ownership.

Now I'll explain this to you. You know

about how fractional ownership works with property. Many people have heard

with property. Many people have heard about it before. Basically on large ticket purchases, you don't necessarily have to pay the entire amount of money to own it. You basically split up with

other people who are also interested in that same purchase. In this case, let's again consider the XUV 700. Okay, 32

lakh rupee car. Maybe you don't want to buy it outright. You get the option of fractional ownership where you're splitting and buying that car amongst 12 other people amongst 11 other people. So

12 tickets will be made for that 30 lakh rupee XUV 700.

So you buy one ticket which means you have 1 upon 12 ownership of that XUV 700. Now this fractional ownership

700. Now this fractional ownership period lasts for a period of 5 years.

After that period any of the 12 owners do have the option of buying that car.

uh if they bid the highest price if they choose to do so. But why should you consider this fractional ownership and when does it make sense? Now I already have a Honda City like I said to you.

Okay, that's my primary car that takes me through 365 days of the year and I'm someone that absolutely loves going on road trips. Now my Honda City is great

road trips. Now my Honda City is great for road trips. If I have to go down to let's say the south of India which I've done crazy road trips to Mumbai to Kanyukumari and a lot of times to Mangalore, your hometown as well. I love

Mangalore by the way. It's one of my favorite places. But so my Honda city

favorite places. But so my Honda city can take me to those places. But what if I want to go to a Lelaya? I can't go in my Honda city. Let's be honest. It's not

a car meant for Lelaya. For that I need something which is all-wheel drive. I

need something which is 4x4 or I need Lord Alto. I'm not buying Lord Alto. So

Lord Alto. I'm not buying Lord Alto. So

let's talk about all-wheel drive and 4x4. So there comes in a car like the

4x4. So there comes in a car like the tar or comes in a car like the XUV 700.

Now what's my purpose for buying this car? 4x4. I don't need it for the full

car? 4x4. I don't need it for the full year. I need it for just the 4x4 purpose

year. I need it for just the 4x4 purpose uh purposes. Now one of the things about

uh purposes. Now one of the things about buying a car on fractional ownership is that you don't get to drive it throughout the year. You're buying it amongst 12 other people, right? So 12

months in a year, 11 12th of a year is 30 days 1 month. So you get to drive that car for 30 days every single year across 5 years. So you have what 5 150

days to drive that car. If my purpose to buy that car is strictly for my 4x4 road trips. 30 days per year is enough for

trips. 30 days per year is enough for me.

Now this depends on situation to situation. I might love road trips. You

situation. I might love road trips. You

for example might want to fractionally own a Ferrari. That's also an option. So

the website that is providing this fractional ownership does have Ferrari listed as well. It's just going to be complicated to find 11 other owners of that Ferrari. Not everyone is that

that Ferrari. Not everyone is that affluent, right? Uh so now you basically

affluent, right? Uh so now you basically can buy this car and I'll tell you how much it costs. A brand new XUV 700 is for 30 lakh rupees. I actually have the quotation for fractional ownership which

I took for this XUV 700 just yesterday.

2.5 lakh rupees to get fractional ownership of that car for a period of 5 years. On top of that, annual

years. On top of that, annual maintenance charges of 1 lak rupees across the total of 5 years. So 3.5 lakh is how much money I'm putting in to have

fractional ownership of that XUV 700 to drive it for 150 days across 5 years. It

will get me my road trips to Lelay Laadak anywhere down the north where I need a 4x4 allow me to explore India which I so badly want to do. So it

enables that and another thing at the end of 5 years when that car's subscription period has ended or the fractional ownership is ending it gets sold right. So you get about 1 to 1.25

sold right. So you get about 1 to 1.25 25 lakh rupees back as well. So 3.5 lakh rupees you put in 1.25 comes back 2.25 lakh rupees is what you have spent

across 5 years plus fuel because maintenance insurance every single thing is taken care of. So you're just paying for fuel on top of that effective payment of 2.25 lakh rupees. Divide 2.25

by 5 you're paying a little over 40,000 rupees a year. My EMI for my Honda City right now is 42,000 a month. M

so if I tell you you can get an XUV700 for 40,000 a year and use it across the 5 years at a hearty period what would you say to that?

I would say it's a good deal.

Exactly. Right.

So it's actually a great way in my opinion to buy a secondhand car. I would

not recommend using fractional ownership to buy your first car because if your car is meant to be your daily driver, imagine you're in a sense of urgency where you need to go somewhere in your

car right now and you need to book an appointment on the app that uh I need this car. You're not going to get it

this car. You're not going to get it instantly, right? So, for your first

instantly, right? So, for your first car, I wouldn't recommend fractional ownership. But when you're buying your

ownership. But when you're buying your second car, the second car that you own, at that point in time, fractional ownership becomes amazing or if you're a

ultra high net worth individual, let's say a top level businessman and you want to drive a Ferrari. Now, logically, if you own a Ferrari Shahan, how many days do you think you'll be able to take it

out on Indian roads in a year?

I don't know, like 25, 30 days.

That's exactly what fractional ownership is offering you. So if you want to own a luxury car without having to pay 4 crores with the 150 175% taxes we were talking about earlier what do you do you

pick it up for 40 lakh because that's the ticket price for a Ferrari on this particular website 40 lakh rupees is what you pay you get your ticket to the Ferrari 30 days a year 150 days you want

to impress a girl take it out have fun and create content for us create content but for those that want to do other things yeah you have that Ferrari to do so I mean it's like a dream right like for

every Indian boy Ferrari and you cannot just not look at a Ferrari if it's just going by you and even if you're in uh Dubai and there's like hundreds of Ferrari you're just still going to look at all of them right because it's so beautifully made

exactly exactly now now let's go a little bit into the future right let's now start talking about know what Elon Musk has been saying right he's saying the future of cars is driverless

vehicles for the whole world you never need need to own a car ever right in the future What would a car expert like you say to Elon Musk?

Elon Musk is born in South Africa, lives in California.

Uh driverless vehicles have already started in the United States, particularly San Francisco. They have a taxi which is driverless as well.

Now in a country like the United States or some place like let's say even China, it it's feasible because u the civic sense, the traffic sense is all obeyed

by like it's all followed and the road conditions are good as well. Now you

tell me Shah if I tell you that you don't need to pay your driver that 25 30,000 every month anymore and you just buy yourself a Tesla I mean I'll propose

it in a fantastic marketing idea okay I'll be like okay you're paying 125% 150% for that Tesla as custom duties but uh you'll save 30,000 rupees per month

on your driver and that car will drive itself in Mumbai would you want that driverless car what will you tell me hire your driver drive a Tesla I don't think I would trust the Indian

roads for a driverless vehicle.

So there you go. We're living in India at the end of the day. 1.5 billion

people right now. 25 years down the line, we might be at about 1.8 billion.

The size of the country remains the same. Metro cities like Mumbai and

same. Metro cities like Mumbai and Bangalore are only going to get more and more populated because these are also employment centers. So

employment centers. So it's not really bad governance or bad civic sense that our infrastructure is not

the size of the country and the number of people that live there. So even 20 to 25 years down the line India might not be that perfect country for a driverless

vehicle to operate. I'll give you an example and uh I drive a Honda City.

That car comes with ADAS. Now ADAS is basically not exactly automated driving but it does automate quite a bit. Now

one thing about ADAS is that if any particular person or any obstruction comes in front of your car it automatically breaks. Now when I'm

automatically breaks. Now when I'm driving this car on a daily basis based on how you're supposed to drive in a city like Mumbai, uh there might be a person that's a bit

far away but it's in terms of the camera sensing technology and the logic that the computer within the car is applying.

It senses danger and it puts the emergency brakes and it's a strong brake. Now ideally in Indian conditions

brake. Now ideally in Indian conditions based on how we're trained to drive, I would get through that and I would not uh collide with the person obstructing it. But imagine you're in a driverless

it. But imagine you're in a driverless vehicle and randomly for no apparent reason it just starts stopping.

Like imagine if you're in a car which just keeps halting again and again and again because that's what the computer thinks is the right thing to do. It's

not the smartest thing. Driverless cars

definitely in a utopia in a utopia world might sound amazing great for certain countries but I don't necessarily see it happening within India for at least

50 to 75 years in my opinion. So now

Tesla is about to come to India.

Do you think it's a good idea to buy a Tesla?

Now Tesla coming to India falls usually under that same uh 125 to 150 customs duty slab. So extremely expensive if you

duty slab. So extremely expensive if you have to import it like that. Hence there

are barely any Teslas apart from multi-millionaires in India that have brought it over for the flex of it. So

Donald Trump and uh the Indian government got into heavy conversations that you need to bring down your uh taxation for our vehicles and it started off with EVs because I mean Elon Musk was

supposed to benefit from this. So the

convers conversation did start and India and the US actually did come to an agreement. In fact India didn't just

agreement. In fact India didn't just make this for the US they made it global because I mean the Indian government is smart as well right? They don't want to create an image where the rest of the world thinks that just because Donald

Trump passed Narendra Modi and his government to do something, he has exclusively done it for the United States. So, India came out with a new EV

States. So, India came out with a new EV policy, EV import policy. It's a great policy which has already started getting implemented. So, the policy basically

implemented. So, the policy basically goes like this. for any car above the price of 35 lakh rupees or $35,000 if we're considering US dollars in its home

country any of those cars which want to come to India if they invest $500 million within India for manufacturing they can get a

subsidized import rate of 15%. So that

150% which they have to currently pay to export their cars to India that drops to 15% if they invest $500 million plus in the Indian manufacturing industry. So

they have to set up a plant for manufacturing their cars and eventually that capacity needs to go into full production. But while you're preparing

production. But while you're preparing for full production there's another term and condition over here 8,000 cars per year. So let's hypothetically say Tesla

year. So let's hypothetically say Tesla decides to invest $500 million plus into setting up a manufacturing plant in India. They can in they can export 8,000

India. They can in they can export 8,000 cars per year after making those guarantees to India at a 15% custom rate import rate up to 8,000 not more than that

up to 8,000 per year and eventually their manufacturing capabilities would be full scale. So they wouldn't have to import those 8,000 but 8,000 per year, 40,000 across 5 years and uh that's what

they can import at 15%.

8,000 a year is not enough. People will

buy Tesla like anything 8,000.

Exactly. So think about it from that perspective, right? The reason the

perspective, right? The reason the government has put an 8,000 cap is because they want to they want to motivate the manufacturing company to manufacture faster. Remember Indian

manufacture faster. Remember Indian government is not just going to bow down to the requests of the US government without protecting our own companies because suddenly if Tesla start coming to India what's going to happen to a

Tata and a Mahindra they're going to get disrupted.

Exactly. And if you look at the contribution that both Tata and Mahindra have made to the EV space in India it's astronomical. Both of them are actually

astronomical. Both of them are actually manufacturing very good EV cars that offer the Indian consumers a lot. So why

compromise two of your biggest homegrown companies? Right? So the Indian

companies? Right? So the Indian government is smart. 8,000 cars per year that's your lollipop. You know 8,000 is not enough because if you're getting and also it starts above 35 lakh rupees,

right? So how many people are really

right? So how many people are really going to be buying cars above 35 lakh rupees anyway from one single brand and it's every brand gets 8,000 cars. So a

Tesla will get 8,000 cars, a BYD will get 8,000 cars. If a Volkswagen or a Mercedes companies that are also planning to take benefit of this policy, it multiplies and how many buyers are

really buying those cars above 35 lakh rupees anyway. So it's still a sizable

rupees anyway. So it's still a sizable amount which is allowed to come in. Now

Tesla was the company everyone thought is going to be the one taking advantage of this. This is done specifically for

of this. This is done specifically for Tesla. There were news articles

Tesla. There were news articles everywhere. I was very excited as well

everywhere. I was very excited as well that people are going to start getting to buy Teslas for 35 lakh rupees in India. Imagine that, right? If you can

India. Imagine that, right? If you can buy a Tesla for 35 lakh rupees, why would you even buy a Mercedes E-Class?

Because currently the flex around having a car like a Tesla in terms of the modern times is even more than you know an old school name like a Mercedes. So suddenly it becomes a very

Mercedes. So suddenly it becomes a very valuable proposition till suddenly Elon Musk decides that I am not taking that risk to invest in the Indian market.

Why?

It did not make feasible sense to him.

only he and Tesla knows the answer of why they don't want to enter India but they basically pulled out. So they have said that we're now going to import cars to India from Germany. We're going to

pay that entire customs duty of 125 150% whoever wants to buy it can buy it. They

are picking up retail shops uh in India as we speak. So they are opening up their uh retail distributorship. What I

feel is that they're probably just testing the market. They want to see.

So now it's going to be sold at 70 lakhs.

Yeah. I mean a 35 lakh rupee model, the base model of the Tesla will come to India for Indian consumers at 70 lakhs.

It's not going to come at 35. But while

Tesla is not taking advantage of this, Volkswagen, Mercedes and a lot of other major companies have explicitly shown interest. In fact, there's a new EV

interest. In fact, there's a new EV player which is entering India, a company from Vietnam called Winfast.

Winfast. They dropped 16,000 cr rupees to set up manufacturing in India and they're $500 million is only 4,000 crores and they dropped 16,000 and they've already not even heard of this company and they

have 16,000 crores to drop to be very honest till 6 months back even I didn't know what Venfast is but they're launching some beautiful cars that's genuinely going to blow the minds of Indian consumers and they're going to

be getting the benefits of the tax labs as well because these are Indian manufactured cars. So now BYD was the

manufactured cars. So now BYD was the previous very good option for EV cars from another company country. Now we

have BYD coming sorry now we have Win Vinfast coming in as well. So the EV space is getting very interesting. One

thing I am very happy about though is that with news like this with u the relaxation of import rules for EV vehicles. While it is important to

vehicles. While it is important to protect Tata and Mahindra the homegrown companies you also need to also give them a little kicker. You're a

businessman. You know how important it is to give your employees that bit of motivation to perform better. Now the

moment certain international pressure comes in, international competition comes in, Tata and Mahindra automatically get motivated into making better cars and pricing them better as

well.

They'll invest more into R&D and make it better and better. That's why

competition is good in any economy. So

today many people talk about how EV cars aren't great but with the competition that is coming into picture those EV cars are going to become significantly better and uh they're also going to become significantly cheaper.

Got it.

Yeah.

And then talk to me about BYD because that's also like picking up steam right now. Like everybody thinks about Tesla

now. Like everybody thinks about Tesla first when they think about electric vehicles but a Chinese brand called BYD has like really taken up the market share. How did that happen? So, you're

share. How did that happen? So, you're

probably aware of this. BYD actually

displaced Tesla as the number one car EV company just about a couple of months ago or last year, right? Globally. And

BYD is now the number one company when it comes to electric vehicle sales. So,

BYD has literally dominated that space.

And I'll tell you exactly why it's happening now when you're thinking about EV cars, right? And what is an EV car made of?

EV car is made of a battery mostly.

A battery. And a battery is made of lithium. And the number one producer for

lithium. And the number one producer for lithium batteries is China. In fact, I think 80% or 90% of the rare earth minerals which are required to make

these EV cars and EV batteries actually found in China.

Wow.

In fact, uh they have certain and I'm not going to say patented because patented is isn't the term, but they have certain rare earth minerals which are exclusive to just them. So

when China and the US for example was getting into trade battles, one of the reasons US actually backed away from troubling China so much is because China

literally came out and said let's continue with this war, the tariff war, I'm just going to block your rare earth minerals.

And the moment your rare earth minerals get blocked, bye-bye Tesla, bye-bye Tata, bye-bye Mahindra, and bye-bye EV companies all across the world. So China

does have that strategical advantage.

the the future UAE.

It's the future UAE. I mean, it's the future Saudi Arabia. It's the future UAE. It's the future Middle East, which

UAE. It's the future Middle East, which is fuel heavy because the future is moving towards EV. So, China is where all the rare earth minerals are at this point in time, most of them at least.

So, it becomes a significant uh cost reduction as well. I mean, I've been to China uh twice over the last 6 months.

I've never been cuz I feel like the media doesn't show us how developed China is, right? But what I've heard from people

right? But what I've heard from people who've gone there, it's a different planet.

You're in for a treat. You've been to the United States. I've lived in the United States. I've traveled there

United States. I've traveled there extensively over the last few years as well. I'll go ahead and tell you this. I

well. I'll go ahead and tell you this. I

enjoyed my experience in China more than I enjoy the United States.

Really, China is a really, really developed country. It's growing at a very fast

country. It's growing at a very fast pace. But we're talking about cars right

pace. But we're talking about cars right now. So, let's get into that. You go to

now. So, let's get into that. You go to China, you'll see EV cars every singlewhere. About 80 to 80% of the cars

singlewhere. About 80 to 80% of the cars on the streets that you'll find every single taxi, it's all EV. Phone

companies like Xiaomi, Huawei are making fantastic cars. EV cars that look like

fantastic cars. EV cars that look like Ferraris and look like Maybacks.

Wait, phone companies are making cars.

Phone companies are making cars because phone companies are also great with batteries. And China has a strategic

batteries. And China has a strategic advantage with batteries. So, you have Huawei that just launched a car last week which looks just like a Maybach, an

S-Class Maybach, which you have to buy for 2.5 crores in India. Imagine I I don't know the rate that Huawei is selling it for, but I'm pretty sure it'll be somewhere around 40 lakhs.

Knowing China and knowing their car industry, it's going to be for 40 to 50 lakhs. Imagine a car as good as the

lakhs. Imagine a car as good as the S-Class Maybach. If Xiaomi started

S-Class Maybach. If Xiaomi started selling cars to India, I would probably consider buying it because the cars are genuinely so beautiful.

But I don't think Indian government will allow right?

Indian government will definitely not allow it. Actually, I'm not too sure

allow it. Actually, I'm not too sure because we already have MG and BYD through those uh special arrangements.

Yeah, there are certain special arrangements that have been made. So,

let's see what happens.

All right, Rohit. Now, we're going to do the rapid fire round. We have three questions.

If you had all the money in the world, which car would you buy? I would buy the Porsche 911, the GT3 RS. It's for about 3.5 crores, and it's an absolute dream car for me right now.

But why?

I mean, it's gorgeous. I mean, when you think about buying a car, right, it's honestly also the looks that create such an amazing vibe to it and the performance, just the entire aura of

that Porsche is fascinating towards me.

Like the sound that it makes, the performance, the looks, everything. I

just love it.

Got it. Okay, second question. One car

brand that's overrated AF, Hyundai.

Why Hundai?

And I'll tell you why. So my grudge with Hyundai and even my confusion as to why so many Indians buy them is basically Hyundai isn't necessarily making the greatest cars when you think about the

core fundamentals, right? Are their cars built in the best way? No. Do they

perform the best? No. Do they have uh crazy good comfort? No. How do they sell their vehicles? by packing it up with

their vehicles? by packing it up with features, marketing the hell out of it and for some reason Indian consumers end up going and buying these Hyundai uh Cretas and sister company Kia, same

story, just packing it up with features and you might say it's a bias because I'm a huge fan of Japanese automobiles.

So, particularly Honda and there's a reason, right? Because I believe in good

reason, right? Because I believe in good engineering and not necessarily a feature-p packed car that has 90% f features that I don't need. So Hyundai

in my opinion is the most overrated and their sister company Kia.

Kia Stos that is also gone.

Yeah. Kia Stos, Hundai Creta. No.

Got it. All right. My last question is if you could drive only one car for the rest of your life, what is it?

I mean, if I had to really say something luxury and fancy and create that type of aura, I could have said something like the GLS. But practicality-wise in India,

the GLS. But practicality-wise in India, driving a luxury car like GLS for the rest of your life does not make sense.

I'll go to my favorite car which I've been talking about again and again. If

it had to be one car, it has to be reliable. It has to be comfortable. It

reliable. It has to be comfortable. It

has to be good. It's going to be the Mahindra XUV700. I

Mahindra XUV700. I think you've said that like 50 times in this podcast, the Mahindra XUV700.

Rajett needs to get money from them.

All right. Thank you so much, Rohit.

It's been almost 2 hours of shooting one of the most in-depth car podcast which I don't think exists anywhere else in India. So I think this is going to be a

India. So I think this is going to be a gold mine of information and knowledge for millions of Indians. Guys, for all of you guys who have watched until this long, you guys truly have next level

attention span. So congratulations.

attention span. So congratulations.

Please let us know in the comment section what are the kind of topics that you want us to talk about because we will bring those kind of guests here with you and talk about those topics in

such depth. You are the audience that we

such depth. You are the audience that we create these kind of videos for because you have that attention span to watch till the end. Until next time, we will

see you in the next one.

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