Daily Archives2017 July 14

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When you purchased your new car, you might have been too excited about your new ride to really take the time to think about the little extras that came with your car. Take your warranty, for instance. Your dealership included an auto powertrain warranty with your new car. But do you really know what that means? Learn what a powertrain warranty covers, and what it does not.

What is a powertrain warranty? This is a warranty that covers a specific section of your car, and nothing else. The powertrain is defined as the engine, transmission and drive train of the vehicle. So, if a problem pops up in the engine, or how it transfers power to the transmission, or how the transmission moves the drive train to move the wheels, it will be covered by the warranty.

Who provides the warranty? A powertrain warranty can be provided as either part of the whole of your initial standard manufacturer’s warranty, or it can be a stand-along warranty provided as an extended warranty. In the first case, the provider will be the manufacturer. In the latter, it would be a third party provider. Some people will be under the impression that an extended warranty, purchased from the dealership when the car was bought, will be through the manufacturer. Often, this is not the case, and these “dealer” warranties are also run through third-party providers.

How long will it last? The length of your powertrain warranty will depend solely on the provider and the conditions you agree to. There are several lengths available, anywhere from 30 days to ten years. The only way to know how long your coverage will last is to read the fine print on your copy of your warranty information.

Is this enough coverage for my car? Whether this is enough coverage really depends on your comfort level with the risk of other problems, as well as your knowledge of your car. The make, model and year of your car can tell you a lot – including whether you should bump up your coverage, or whether an auto powertrain warranty will be enough to cover you. If your car is prone to other problems, you will want to look into more coverage. If not, you might be able to survive with the lower costing warranty. The decision is yours, but it is only a good one if you make an informed choice, based on everything you know about your car, and not just picking the cheapest option.

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Source by Gregory D Nelson

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Finally, after long wait the Goods and Service Tax (GST) will be implemented in India from July 1, 2017. Although, the success of tax and its impacts on Indian economy are hidden in future, but it has created lots of curiosity among the citizens of country and has become the topic of hot debate among everyone. This is mainly because it is said that with implementation of this law, a common tax policy will be applied on all types of goods and services across the country and therefore, it is believed that the price of costlier items will be higher than existing tax policy.

Going through the concern of people, we are trying to find the impact of GST on the prices of cars that are being sold under different segments. But, before that it would be better to know what exactly GST is?

What is GST?

GST also known as Goods and Service Tax is overall amount of indirect tax that are levied on manufacturers, for sale of goods and services offered by them and charged equally from the customers consuming them. This tax will be charged equally from all the citizens across the country and will replace the indirect taxes that are imposed on customers by Central and State governments individually.

Impact of GST on Car Prices:

It is speculated that implementation of GST will result in levying of indirect CESS on the shoulders of car lovers. Generally, there are four segments of cars existing in Indian car market.

1. Small Cars: Also referred as hatchback the length of these cars is mainly about four meter and are empowered with both petrol and diesel engines but not more than 1.2 litre and 1.5 litre engine configurations respectively.
2. Mid-size Sedan: These are the cars which have length above four meter and offered in both petrol and diesel variants but do not have engine more than 1.5 litre displacement capacity in any of the variants. They are also known as compact sedans.
3. Luxury Cars: Like mid-sized cars these cars also have length above four meter and empowered with engine with more than 1.5 litre displacement capacity in both petrol and diesel variants.
4. Sports Utility Vehicles: These are the vehicles which have ground clearance of 170mm and length above four metre, they are also offered in both petrol and diesel variants with engine configuration more than 1.5 litre.

Let us now make difference in the car prices under different segments on basis of existing tax levies and on the basis of GST.

1. Small Cars: At present the tax on small cars enriched with petrol engine varies from 26% to 34% whereas on diesel variant it varies between 27.5% and 35.5%. After GST the total tax on petrol variant will be 29% (28% base tax+1% CESS), while on diesel it will be 31% (28% base tax+3% CESS).
2. Mid-sizd Sedan: The existing tax on both petrol and diesel variants varies from 40.5% to 51.5%, after application of GST it will be 43% (comprising of 28% base and 15% CESS).
3. Luxury Cars: The GST tax on this segment will be 43% (28% base and 15% CESS) whereas today the tax varies from 44.5% t o 51.5%.
4. SUVs: The ongoing tax falls between 47.5% and 54.5% but after GST it will be also 43% (28% base and 15% CESS).

From the above mentioned description it can be noticed that the prices of small cars will certainly go high after implementation of GST. Although, there are certain states that charge Octroi the cost of car might be different, let us for instance say Maharashtra.

This could be better understood from the following illustration:

The ex-showroom price of Renault Kwid with 0.8 litre engine is Rs 3,32,312. But as Octroi is not charged in Delhi, the ex-showroom price of Kwid in Delhi comprises of VAT+ Infra CESS that makes the total tax up-to 26%.

That means ex-factory price of Kwid in Delhi is Rs. 263739. After implementation of GST the tax as referred in point 1 will be 29% thus making the ex-showroom price of Kwid 0.8 petrol in Delhi to Rs. 340223, which as compared to existing ex-showroom price of Rs. 332312 is Rs. 7911 higher.

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Source by Kamal Swami