Deal Time On Diesel Cars: Why Buy One Before April 2020?

There are discounts being offered on BS-IV stock as well as depreciation benefits for corporate buyers.

From 1 April 2020, all vehicles sold in India will have to meet BS-VI emission norms, which is a huge step up from the current BS-IV norms prevalent in the country. With just about a month left for dealers to exhaust stocks of their BS-IV compliant vehicles, its time for bargain hunters to look for deals.

While most automakers have slowly been moving their petrol-engined products to BS-VI norms over the course of the past year, they have been waiting for the last few months to introduce diesel engines that are BS-VI compliant owing to the huge increase in prices of such vehicles, except in some cases.

However, not all car and bike dealers have been able to get rid of their BS-IV inventory soon enough, and these are the vehicles that will be up for grabs with some sweet discounts.

Buy BS-IV or BS-VI?

The big question though: Is it worth buying a BS-IV compliant vehicle instead of a BS-VI one?

With the government taking steps to revive the auto sector’s slowing sales, Finance Minister Nirmala Sitharaman had, on August 23, announced that government departments would be allowed to buy new vehicles. In addition, automobiles purchased till 31 March, 2020, can avail the benefit of additional depreciation of 15 per cent, with total depreciation up to 30 per cent. This would benefit corporate buyers looking to save taxes.

The big carrot - Minister of Road Transport and Highways Nitin Gadkari has assured buyers that BS-IV vehicles bought till March 31, 2020, would remain operational for their entire registration period.

Now add this up and it sounds like a sweet deal. Discounted prices in March by carmakers selling off their BS-IV stock and corporate buyers picking up cars to avail the depreciation benefits, is bound to push up March sales.

Worth Buying A Diesel Car?

It becomes even better for those looking at diesel cars. Environment concerns aside, diesel vehicles have inherent economic benefits for those who drive long distances or for commercial use. The higher fuel efficiency, lower price of fuel and better torque figures on diesel vehicles translate to savings in the long term. That is if you buy at current prices.

With BS-VI emissions compliant vehicles coming in, which require the addition of equipment like urea injection (for larger diesel engines), diesel particulate filter, additional catalytic converters, lean nitrous traps and such, the prices will go up significantly. You would end up spending anywhere between Rs 30,000 to Rs 1 lakh more than a BS-IV diesel vehicle.

Take the Tata Altroz BS6 for example. The XT petrol variant costs Rs 6.84 lakh ex-showroom, while the XT diesel variant costs Rs 8.44 lakh ex-showroom. That’s a difference of Rs 1.6 lakh in ex-showroom price alone. Unless you are a high-miler, the money saved buying a petrol car would go a long way in keeping it fuelled up. 

However, some companies like Ford India have tried to keep the prices of their BS-VI vehicles at par (or even lower) than BS-IV offerings in an effort to boost sales. They’ve done that by knocking off some features (like leather seats, for example) and rationalising manufacturing costs.

Others like Maruti Suzuki have simply existed the diesel space. Instead it is focussing on new BS-VI petrol engines, additional features and introducing CNG-powered models across its range.

Toyota too has axed the Liva and Etios from its range. It will now “badge-engineer” some Maruti Suzuki products for its stable. It already sells the Baleno as the Glanza and will now sell the Vitara Brezza and XL6 as well as re-badged models.

Deal Time At Dealers

What happens to stock at dealers? Most have almost exhausted their inventory, but the one’s left over will go for a song.

Renault, for instance, is offering a flat Rs 2 lakh off on the Duster 110 PS model at some dealerships. Nissan is offering a 1.6 lakh “benefit” on the Kicks diesel models, which includes cash discount, warranty and exchange bonus. Renault and Nissan aren’t going to be selling their 1.5-litre diesel engine models post April 2020.

Maruti Suzuki is launching the Vitara Brezza petrol soon and is pulling the plug on the diesel model. The Dzire diesel, one of its largest-selling models, will also be axed. The Ciaz diesel was recently discontinued. Bad news though is that dealers have already exhausted stock of all their diesel cars.

Toyota is offering up to Rs 50,000 off on the feature-rich Yaris BS-IV model. Hyundai dealers are offering Rs 50,000 cash discount on BS-IV Verna models, besides exchange offers.

Among the pricier vehicles, Honda is offering a Rs 5 lakh discount on the BS-IV Honda CRV, while Jeep is offering Rs 2 lakh off on the petrol variants of the Compass.

All in all, for bargain hunters, March is a good month to look for deals.