What you need to know
The price tag is only the start. Over a 5-year loan you pay the down payment, all EMIs (including interest), processing fee with GST and insurance every year, plus fuel or charging, servicing, tyres and parking.
Example: ₹10 lakh on-road car
| Cost | Amount |
|---|---|
| Down payment | ₹2,00,000 |
| EMIs: ₹16,607 × 60 | ₹9,96,401 |
| — of which interest | ₹1,96,401 |
| Processing fee 0.5% + GST | ₹4,720 |
| Insurance (5 years at an assumed ₹25,000 a year) | ₹1,25,000 |
| Total paid over 5 years | ₹13,26,121 |
On-road price ₹10,00,000, loan ₹8,00,000 at 9.00% for 5 years. Financing adds ₹2,01,121 in interest and fees. Fuel or charging, servicing, tyres, parking and tolls come on top, and the car loses value every year. Total cost calculator →
Running costs to add
- Fuel or electricity
- Scheduled servicing and repairs
- Tyres and battery replacement
- Parking, tolls (FASTag) and cleaning
- Insurance renewals — premium usually falls as IDV reduces with age
How to cut the total cost
- Put down more and borrow less
- Choose the shortest affordable tenure
- Take a floating loan and prepay when you can
- Compare APR, not headline rate
Total cost calculator
Frequently asked questions
How much extra does a car loan cost overall?
On ₹8 lakh at 9% for 5 years, interest is about ₹1,96,401; at 7 years it rises to about ₹2,81,186.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.