The Total Cost of Ownership (TCO) Shock

When buying a ₹10,00,000 on-road hatchback, the true monthly outgo is never just the EMI:

  • 5-Year Loan EMI (at 9.25%): ₹16,700 / month
  • Fuel (1,000 km/month): ₹6,500 / month
  • Comprehensive Insurance + Servicing: ₹3,200 / month
  • Tolls, Parking, Cleaning: ₹1,800 / month
  • Total Monthly Cashflow Impact: ₹28,200 / month

The 20/4/10 Golden Rule:

1. 20% Down Payment: Never take a 100% on-road loan.

2. 4-Year Maximum Loan Tenure: Never stretch to 7-year loans where you pay 35% in interest on a depreciating car.

3. 10% Total Outflow Cap: Total monthly vehicle costs (EMI + fuel + insurance) must not exceed 10% of your gross salary.