The price on the windscreen is the smallest number in car ownership. A ₹10 lakh car can cost ₹2 lakh to ₹2.5 lakh a year to keep on the road before a single loan EMI, once you add depreciation, fuel, insurance, service and parking. Depreciation alone, the value the car sheds year after year, is usually the biggest line and the one buyers forget. All figures here are illustrative.
Most people compare car prices and EMIs. The cost that actually shapes your budget is what happens every month after you drive off the lot.
What a car really costs each year (illustrative)
Depreciation: the cost you never see
Depreciation is the value a car loses simply by ageing and being driven. A new car often sheds 15–20% in the first year and roughly half its value over five years. On a ₹10 lakh car, that is close to ₹1 lakh a year on average, gone whether you sell or not.
No bill ever arrives for depreciation, which is why it slips out of most buyers' sums. But it is as real as fuel: it is the gap between what you paid and what the car will fetch when you sell. It is also why a car is a depreciating asset, a point that matters when deciding whether to pay cash or take a loan.
The running costs that repeat every year
The visible costs recur relentlessly. Fuel for 12,000 km a year at 15 kmpl and ₹100 a litre is about ₹80,000. Full-cover insurance, own damage plus third party, renews yearly, roughly ₹15,000–30,000 on a car like this. Routine service, tyres, brakes and the odd repair add ₹15,000–25,000. Parking in a metro, whether a rented spot or building charges, can run ₹1,500–4,000 a month, another ₹18,000–48,000 a year. Tolls and cleaning sit on top.
Add these to depreciation and the total lands near ₹2–2.5 lakh a year, or roughly ₹17,000–21,000 a month, before any loan EMI. If the car is financed, the EMI stacks on top; a ₹10 lakh car often carries a loan of a few lakh, and you can size the monthly figure with the car loan EMI calculator.
These costs also do not stay flat. Insurance premiums and service bills tend to climb as the car ages, wear items like tyres, battery and brakes fall due, and fuel prices move on their own. A rough rule is that the older the car, the more of these repeated costs you carry, even as depreciation on the remaining value slows. Setting aside a small monthly amount for the big, irregular bills keeps them from landing as a shock.
Where the yearly cost goes (illustrative)
Illustrative annual costs on a ₹10 lakh car, before any loan EMI. Depreciation is the largest line and the one buyers most often forget. Your figures vary by car, city and use.
Car versus cabs: where the break-even sits
Because so much of the cost is fixed, the sensible comparison is not "car versus no car" but "car versus how else I would travel". Suppose owning and running the car costs about ₹2.4 lakh a year, and cabs or ride-hailing run near ₹15 a kilometre (illustrative). That budget buys roughly 16,000 km of rides a year, about 1,300 km a month.
Below that, cabs can work out cheaper, because you skip depreciation, insurance and parking entirely. Above it, the car's per-kilometre cost keeps falling while the cab meter does not, so heavy users come out ahead. The break-even shifts with cab rates, fuel prices and how much you drive, so plug in your own numbers rather than assuming.
Owning still buys things a cab cannot
The maths is only half the decision. A car offers availability at odd hours, a fixed seat for a child or an elderly parent, space for luggage, and the freedom of an unplanned drive. For families and long commutes, that convenience can be worth paying a premium over the pure cab cost.
For a single city-dweller who travels lightly and irregularly, the same money may go further on cabs, with none of the depreciation, servicing or parking headaches. Both can be reasonable. The point is to make the choice with the full cost in view, not the sticker price alone.
Related NYVO guides
- Car Loan vs Paying Cash for a Car – how to fund the car once you have priced the true cost.
- Emergency Fund: How Much You Need in India – the buffer that keeps a big repair bill from becoming debt.
- How Much to Save Before a Big Purchase – sizing the fund before you commit to a car.
A car costs far more to keep than to buy, and most of that cost is invisible until you total it. Price out depreciation, fuel, insurance, service and parking together, weigh them against what you would otherwise spend on travel, and decide with the real number rather than the one on the windscreen.
