The Cost of Driving Your Car

If you are contemplating buying your second car, for the home, the better half or possibly a grown up child, read this carefully. When an airconditioned taxi cab (with a chaffeur) is offered to you @ Rs. 15 per kilometre (Meru or Easy Cabs, for instance), you shudder. This is expensive, if used regularly. Much better to buy a vehicle instead.
Lets do some micro economics here:
Assume now, that you are purchasing a mid range car, say one that costs Rs. 6 lakhs and runs on petrol, giving you an efficiency of about 12 km per litre. Assume further that the car will run about 10,000 km a year. These are fair & realistice assumptions. Remember that this is the second car for the family.
Fuel cost per kilometre (including engine oil) : Rs. 5 (just a third of the cab)
Over a five year period, though, there are the following:
Daily washing, quarterly servicing and (inevitable) repairs, battery & tyre replacement and tinkering costs : Rs. 100,000, or about Rs 2 per km
Insurance : Rs. 50,000, Re 1 per km
Loss of interest (post-tax!) on the amount invested in the car : Rs. 3 per km
Loss on sale of car after 5 years (@ Rs. 3 lakhs) : Rs. 6 per km. The more expensive the car, the higher the loss per km.

Total cost of ownership : Rs. 17 per km. The saving to you by using a cab covering 50,000 km over a five year period is Rs. 1 lakh.
Throw in a personal chaffeur and the cost reaches Rs. 23-Rs. 26 per kilometre.

I use this argument against a second car, rather than the first, only because a single car may be seen as vital for, say, a medical emergency and hence not subject to critical economic analysis.
The moral: public transport is not just eco-friendly, it is common economics as well.