This is Part 1 of the Car & Bike Owner's Guide, our 20-part series on owning, running and staying legal with a vehicle in India.
Buying your first car is exciting, and also easy to get wrong. Showroom offers, friends' advice and online reviews all pull in different directions. Here is a simple way to cut through the noise.
Step 1: Budget for the on-road price, not the sticker
The price in adverts is usually the ex-showroom price. What you actually pay is the on-road price, which adds:
- Road tax and registration, set by your state and often the biggest add-on.
- Insurance, including the mandatory long-term third-party cover for new cars. See Part 10: Car Insurance Add-ons and NCB.
- FASTag, handling charges and optional extended warranty or accessories.
Then add running costs: fuel, servicing, parking and annual insurance renewal. A common rule of thumb is to keep the total car cost, including any loan EMI, to a modest share of your monthly income, so the car never becomes a strain.
Step 2: Pick a segment
- Hatchback: Compact, easy to park and cheaper to run. Ideal for city driving and small families.
- Compact sedan: A hatchback with a boot. More luggage space, similar running costs.
- Compact SUV: Higher seating and more ground clearance for bad roads, usually at a higher price.
- MPV or 7-seater: For large families or frequent group travel.
Most popular small cars are under four metres long, a size that, together with engine limits, places them in a lower GST bracket than larger cars.
Step 3: Choose a fuel type
- Petrol: Simple, smooth and the default for low to moderate running.
- CNG: Low running cost for heavy city use, with less boot space. See Part 15: Owning a CNG Car.
- Diesel: Fewer choices in small cars now, but still efficient for long highway runs.
- Electric: Very low running cost if you can charge at home. Read our guide to home EV charging.
Step 4: Check safety and features that matter
- Look up the car's crash test rating. See Part 13: Bharat NCAP Ratings.
- Prioritise airbags, ABS, rear seat belts for every seat and ISOFIX child seat mounts over touchscreens.
- Decide between manual and automatic early. Our manual vs automatic guide helps.
Step 5: Shortlist and test drive
- Pick two or three cars that fit your budget and needs.
- Compare on-road quotes from more than one dealer.
- Take a proper test drive. Use our test drive checklist.
- Still unsure whether to buy new? Read new vs used car.
Next in the series: Part 2: Scooter or Motorcycle?.
