Compare the cost of a BS IV car with that of a BS VI before actually buying

Topics BS VI | BS IV vehicles

India will make the transition from Bharat Stage (BS) IV to BS VI vehicle emission norms on April 1, 2020. Registration of BS IV vehicles will stop from the start of the next financial year. Some manufacturers like Maruti-Suzuki have already got their line-up of BS VI models in place, while others are scrambling to do so. Many customers have asked us whether they should purchase a BS IV or a BS VI model. Let us examine the pros and cons of purchasing these two variants, and remove some of the confusion and myths surrounding this subject.

Alluring discounts on BS IV models: Manufacturers are currently offering considerable discounts on their BS IV models. The level of discount varies from one manufacturer to another. “Manufacturers that have a bigger inventory, or those that have already ordered kits from abroad that will need to be manufactured by January-February, are offering a higher discount,” says Som Kapoor, partner, EY. He adds that discounts are also being offered currently because of the slowdown in auto sales. Say Rush Parekh of Team-BHP.com: “Customers can get discounts on almost every car today, except for the latest launches like Hector, Seltos, etc.”

On an Alto 800, for instance, you could get a discount of Rs 40,000. If you offer your old car in exchange, you get a further Rs 20,000 off. There is also a corporate discount of another Rs 5,000. All of this adds up to a hefty discount of Rs 65,000.

On a Vitara, a discount of Rs 50,000 is available at present. In addition, there is an exchange bonus of Rs 20,000, a corporate discount of Rs 10,000, and a five-year warranty. On the Honda Amaze sedan, a discount of Rs 42,000 is available.

Currently, buyers will have greater choice in the BS IV variants. “Some cars, or their engine variants, are going to be discontinued in the BS-VI era, such as Swift 1.3L diesel, Tiago diesel, etc. Almost all small diesel engines are on their way out,” adds Parekh.  

 
Ready delivery is another advantage. The car you choose is likely to be available right away in the BS IV variant, whereas there could be production delays after BS-VI kicks in.

Experts say that a BS IV car can run on BS VI fuel without any problems at all.

Selling in a different state could be a problem: If you sell your BS IV vehicle in the same state, then it doesn't have to be re-registered, so you will not face any problem. But if you try to sell the car after three-four years in a different state, you could face a problem. A car has to be re-registered in a different state. If the registration of BS IV vehicles is stopped completely after April 1, 2020, then you would have no option but to sell your car in the same state. “Once a new technology becomes the standard, the resale price of vehicles running on older technology does get hit,” says Sharma.

According to Parekh, there is also the probability of engine power and fuel economy being slightly compromised due to the restrictive exhaust systems required to meet BS-VI norms.

BS VI vehicles will be greener, but costlier: If you opt for a BS VI vehicle, you will get a vehicle that runs on the latest technology. Since it will consume fuel containing less sulphur, emissions will be lower.

A BS VI vehicle will, however, cost more. “For the same model, the cost will be 10-15 per cent more for the BS VI variant compared to the BS IV variant,” says Anil Sharma, associate director, Markets and Markets, an automotive and transport consultancy. The cost difference between BS IV and BS VI, experts say, will be higher for diesel vehicles and lower for petrol vehicles because the new technology deployed for achieving BS VI norms is more expensive for the former.

 
Since car manufacturers would have made high investments to make the transition from BS IV to BS VI, they will want to retrieve those costs from customers. However, they may not pass on the full impact right away. “In a tepid market like this, manufacturers will try not to hike costs to ensure a smooth transition,” says Kapoor.

What should you do? 

Customers looking for a good deal and keen on lower cost of ownership may buy a BS IV vehicle. Such persons should be prepared to use the vehicle for at least five years, to extract the utmost value out of it. After that, even if they do not get a good resale value, it would not matter too much.  

On the other hand, customers who are environment-conscious, and want a vehicle running on the latest technology, or those who want a good resale value, should opt for a BS VI vehicle.

Very attractive deals will become available, more so on diesel variants. Timing will matter greatly for getting the best deal. “BS-VI related discounts will peak between January and March 2020,” says Parekh, as manufacturers strive to sell off their entire inventory by the end of March. So, keep an eye out and strike when you get a good deal.

Those opting for a BS VI vehicle will have to make sure that this fuel is available in their vicinity. Finally, do a cost comparison between a BS IV and a BS VI vehicle. If you are fine with the extra cost of the BS VI vehicle, buy it.

Myth and reality

Myth 1: If I buy a BS IV car, I may not be able to get it serviced

Reality: Yes, you will be able to. Maruti Suzuki is even offering a five-year, 100,000-km warranty to take care of precisely this worry.

Myth 2: The government could come up with a new policy in future imposing an early ban on BS IV vehicles

Reality: At present, the government’s stand is that BS IV vehicles purchased before April 1, 2020 can be used for their complete lifecycle. In a place like Delhi-NCR, this means 10 years for a diesel vehicle and 15 years for a petrol vehicle.

Myth 3: If I buy a BS IV car and put BS VI fuel in it, engine performance will be affected

Reality: Experts say BS IV petrol cars will be able to run on BS VI fuel also without encountering any problems. There is less clarity on diesel vehicles. Even in their case, most experts lean towards the view that there will not be any problem. 

 


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