Buying a Car is a great first time emotional event and people are buying a car at a fairly young age. Once upon a time a person would be in his 40s when he bought a car, now he is in his 20s. Two things have happened – car was once considered a luxury, now it is considered a necessity. A guy goes around in a bike ONLY till his wife gets pregnant! Then there is so much pressure on him to buy a car, it is not funny!

I am not even getting into ‘do you need a car’ – that is a philosophical debate!

How Much Can You Afford? What Car Should You Buy?

This question should normally preceded by ‘How much car DO you need’. If you are going to travel 10km a day in a city and in a place where there is no traffic, and you are travelling alone you may need an Indica. However if you are planning to travel 200km a day, may have to take bankers, customers, etc. along, you may need a bigger car like a Toyota Corolla or a Honda Accord.

Should You Finance the Car?

For many people this question is answered by the sheer lack of cash to buy a car. Sure, I know 2 Mercedes owners who paid cash, but the general rule is people borrow for buying a car. In fact cars are discussed today as “Rs. 35,000 a month” rather than as a Rs. 15L car or a Rs. 18L car! Just try to pay up as much as possible upfront, so that the interest that you pay is kept to the minimum.



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  1. Subra, with the series of articles on ‘how to buy a car’, it looks as if you are going thru the motions of buying one.

    Best Wishes.

  2. no, I am not. I wanted to be a wealth ONLY kinda blog. I do not get excited by saying ‘spend less’ – frankly that does not really make you rich. Investing smartly is what I wanted to concentrate on. However the under 35 guy/gal reading my blog is busy spending…and sometimes foolishly, hence this attempt.

  3. Subra,

    I love you for quoting such examples, like this : “A guy goes around in a bike ONLY till his wife gets pregnant” 🙂

  4. In India, there are no options of leasing cars for short term. Otherwise for non-official occasions it can work out here.

    In US & especially in well connection cities like San Francisco, i see people leasing out cars when there is a need. Not exactly very cheap but works out cheaper if you are going to lease only few days in a month.

    Why bother to buy & incur all costs when you can just pay by the usage for few days. And have a different car every time!!!

  5. I don’t think in Indian context, car is a necessity. With so much help available from autos, buses, radio cabs.. one should stay away from owning a car as much as possible. Even if you have to buy a car, accumulate the money and don’t take loan for car (except if your company subsidizes it..). If you don’t have money, take a second hand one..

  6. Subra we are greatful for the effort you are taking in our Blog.Long Term wealth creation and Compounding plays real magic with “TIME FACTOR”….and which means we need to start when we are very young ….Sooner we start ,even from first salary ,IT BEcomes really easy in later stage once ,SNOWBALL effect starts….Delayed Gratification is the trick…and sooner our Young generation learns it ,better they become in giving full justice to their hard earned money….else a sea saw of lifestyle diffrence…..Reckless and High when young and conservative and Low when Goals like Kids post graduation,Marriage and own Retirement start comming near…SUBRAS post is educating our Young Generation as well and thats so wow for them going ahead…keep it up sir !!

  7. Hi Subra,

    CAR is for sure a fast depreciating item. Lets say after 10 years you’ll get 1/10 (if lucky) or 1/5th of the cost. How would you observe a loan to purchase this one?
    1. It is bank’s money that is put at first place (They bought the major % depreciating thing)
    2. we pay interest for the O/S amount
    3. Value depreciation of Rupee YoY. (Like rs 1000 today looks much cheaper than what it was 7 years ago)

  8. the best education i ever received in ‘delaying gratification’ was in my mid twenties when i lost my job and therefore my fancy car.
    the school of hard knocks is a good teacher -the earlier you learn,the better i guess.

  9. This could be the last generation that could be burning petrol. For your kids, petrol would be Rs 3000 / liter and by the time your grandkids grow up, there will be no crude left… When you would tell them that we used to go around in cars – it will be like a mythical thing like Pushpaka vimana …. Definitely buy a car if you get the chance.

  10. Hi! I was hoping I could use the article in our blog too and mention source. Please let me know.


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