Think Before Taking a Car Loan!

Thinking of taking a car loan? Hold it right there! Did you know that the value of a brand new car depreciates by 20% when you drive out of the showroom! Add to this a 15% depreciation in value each year (assuming normal wear and tear) the govt recommends!


This implies in the first few years and certainly before you pay out the loan the value of the car will be lower than the balance in your car loan!

Suppose you didn’t take the car loan but instead invested an amount equal to the EMI you intended to pay, could you buy an used car in 2-4 years and safeguard yourself against the initial steep depreciation in car value?


Use this calculator to find out!

Download the Think Before You Take That Car Loan Calculator!

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9 thoughts on “Think Before Taking a Car Loan!

  1. People know this deep down their heart… but they always ignore it (instant gratification)…..
    You gave this proof, strong enough to sit and think ….
    Thank you Pattu …..

  2. No matter, how hard the sensible thing is said but the emotional part of our brain ‘ll over financial part or should I say rational part. Common sense suggests, we do not need a car for parking it most of the time in our own house, yet We go for it.



  3. IMHO a car purchase should never looked with an investment perspective. Just like we don’t treat insurance as investment we should also not treat motoring as an investment choice. It’s a consumable and the loan just increases the overall cost of it. For some the benefits of this choice are worth the cost.

    Also a note of caution on used cars : buying used cars and saving on the depreciation brings with it its own can of worms. Used cars carry the risk of tampered odometers , and other service related problems.

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