That ₹18 lakh SUV is NOT an asset.
It is a WEALTH DESTROYER.
Do NOT sign the loan papers yet 🚗💸
Here is the math your car dealer
will NEVER show you 👇
THE REAL COST OF THAT SUV:
Car price: ₹18,00,000
Down payment: ₹0 (zero — most people)
Loan tenure: 7 years (because “EMI fits budget”)
Interest rate: 9%
Monthly EMI: ₹28,000
Total amount paid over 7 years: ₹23,52,000
Interest ALONE: ₹5,52,000
You paid ₹5.5 LAKHS just in interest.
That is a whole other car.
And the car itself?
Worth ₹6 lakhs after 7 years.
You paid ₹23.5 lakhs for something worth ₹6 lakhs.
That is not buying. That is burning money.
THE 20/4/10 RULE:
Before buying ANY car, it must pass
ALL THREE tests 👇
2️⃣0️⃣ MINIMUM 20% DOWN PAYMENT:
₹18 lakh car = ₹3.6 lakh down payment minimum.
Cannot afford ₹3.6 lakhs down?
You cannot afford the car. Full stop.
Why 20%? Because it forces you to SAVE first.
If you cannot save ₹3.6 lakhs, how will you
handle ₹28K EMI for 7 years plus insurance
plus fuel plus maintenance?
4️⃣ MAXIMUM 4 YEARS LOAN TENURE:
NOT 5 years. NOT 6 years. NOT 7 years.
Maximum 4 years.
Why? Longer tenure means more interest.
4 year loan at 9%: ₹3.2 lakh interest
7 year loan at 9%: ₹5.5 lakh interest
Difference: ₹2.3 LAKHS wasted
just for “lower EMI.”
That “lower EMI” is the most expensive
comfort zone in your life.
1️⃣0️⃣ EMI MUST NOT EXCEED 10% OF MONTHLY INCOME:
Earning ₹50,000/month? Max car EMI = ₹5,000
Earning ₹80,000/month? Max car EMI = ₹8,000
Earning ₹1,00,000/month? Max car EMI = ₹10,000
Earning ₹1,50,000/month? Max car EMI = ₹15,000
If your desired car EMI is MORE than 10%,
you CANNOT afford that car.
Your ego says “I deserve it.”
Your bank balance says “I will suffer.”
THE WEALTH COMPARISON:
₹28,000/month for 7 years — TWO PATHS:
PATH A — Car EMI:
→ Total paid: ₹23.5 lakhs
→ Car value after 7 years: ₹6 lakhs
→ Net wealth: ₹6 lakhs (depreciating)
PATH B — SIP at 12%:
→ Total invested: ₹23.5 lakhs
→ Corpus after 7 years: ₹38.6 lakhs
→ Net wealth: ₹38.6 lakhs (growing)
SAME ₹28,000 every month.
Path A: ₹6 lakhs (depreciating)
Path B: ₹38.6 lakhs (compounding)
Difference: ₹32.6 LAKHS
That is the real cost of the SUV.
Not ₹18 lakhs. Not ₹23.5 lakhs.
₹32.6 lakhs in opportunity cost.
THE HONEST REALITY CHECK:
If the 20/4/10 rule says you cannot
afford that SUV, you have two choices:
Option A: Buy a used car within budget
→ 3 year old Swift for ₹5-6 lakhs
→ Low EMI or pay cash
→ Same transportation
→ ₹32 lakhs richer in 7 years
Option B: Wait and save until you CAN afford it
→ Save ₹3.6 lakh down payment first
→ Then buy with 4 year loan
→ EMI under 10% of income
→ Wealth stays intact
Your ego wants the SUV today.
Your future self needs the wealth tomorrow.
Which one wins?
WHAT IS YOUR CAR EMI PERCENTAGE? 👇
Calculate right now:
Car EMI divided by Monthly Income times 100
🟢 = Under 10% (you can afford it)
🟡 = 10 to 15% (borderline — be careful)
🔴 = Over 15% (you cannot afford this car)
😎 = No car EMI (paid cash or no car)
🚗 = Planning to buy — checking now
Comment your percentage below.
I will reply with whether you can
ACTUALLY afford your car.
No judgement. Just math.
“If you cannot buy it twice,
you cannot afford it once.”
📞 +91 98408 78799
🌐 pveassetservices.com
Sudarsanam | PVE Asset Services LLP
SEBI Registered | CFP | 24 Years | Chennai
This is educational content not personal advice.
Car loan terms vary by bank and creditworthiness.
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