Travel & Spending · 7 min read
Car vs cab in an Indian city: the honest monthly cost
A car feels like an asset. In an Indian city it often behaves like a fast-depreciating monthly expense. Here is the true cost, side by side with cabs.
Krish Dalal
Founder and editor, PaisaExpert. Master's in Business Management, SP Jain School of Global Management, London. · Last updated 2026-05-26
Owning a car is one of the most emotionally loaded money decisions in India, wrapped up with status, family expectation and the feeling of having arrived. None of that is wrong, but it makes it hard to see the number clearly. A car is not free once the EMI ends. It quietly costs you every single month it sits in your parking spot, and for a city user who drives mostly short distances, that monthly cost can be far higher than simply taking cabs.
The true cost of owning, beyond the EMI
Most people compare the car EMI to their monthly cab spend and stop there. That comparison is wrong, because the EMI is only one part of the cost. Here is what actually goes out every month when you own.
- Depreciation. A new car loses 15 to 20 percent of its value in year one and keeps falling. On a ₹10 lakh car, that is often ₹12,000 to ₹15,000 a month of value quietly evaporating, whether you drive it or not.
- The cost of the money itself. Whether you took an EMI or paid cash, the money is tied up. On an EMI you pay interest, on cash you give up the return that money could have earned in a SIP.
- Running and standing costs. Fuel, insurance, servicing, parking, and the occasional repair add up to several thousand a month even for light use.
| Monthly cost of a ₹10 lakh car (city use) | Rough amount |
|---|---|
| Depreciation | ₹12,000 to ₹15,000 |
| Interest or foregone return on the money | ₹6,000 to ₹8,000 |
| Fuel | ₹3,000 to ₹6,000 |
| Insurance, servicing, parking, repairs | ₹4,000 to ₹7,000 |
| Typical all-in monthly cost | ₹25,000 to ₹40,000 |
When a car makes sense, and when it does not
This is not an anti-car argument. A car earns its keep when you drive long distances regularly, have a family with car-seats and school runs, live where cabs are scarce or unreliable, or travel at hours when getting a cab is a gamble. It makes less sense when you mostly take short city trips, drive only on weekends, or have reliable cabs and metros nearby. The honest test is how many kilometres you genuinely drive, not how the car makes you feel in the showroom.
Frequently asked
What to do next
- Estimate how many kilometres you genuinely drive in a typical month, honestly.
- Run your numbers through the car vs cab calculator to see the true monthly cost of owning versus cabbing the same trips.
- If you do buy, keep the all-in monthly cost from crowding out your investing and emergency fund.
- If you already own one car, count how often you truly need two before considering a second.