Fill only cells in green When you drive out of the showroom the car depreciates in value by about

20%.
Total cost of Car 1000000 You could change this in cell C10 but its not a good idea!
Downpayment 100000 After that each year the car depreciates by 15% as recommended by the govt! Assuming normal wear and tear only!
Loan Amount 900000 Notice that the depreciation is rapid initially and slows down as years go by
No of years 7 * Corpus from EMI: Suppose you dont take the loan but invest an amount equal
Payments per year 12 to the EMI a safe instrument like a recurring deposit at annualised growth rate of
Interest Rate 10% (RDs are compound quaterly but annual compounding should be close enough)
EMI Rs. 14,941 I have neglected tax on the corpus saved. This will make a difference but not enough to favour taking a car loan!
Year Balance Loan Value of Car Corpus from EMI*
0 800000
1 806499 680000 193636
2 703207 578000 402763
3 589099 491300 628621 Buying a used car which is between 2-4 years old sounds
4 463042 417605 872546 good. Why?
5 323786 354964 1135986 (A) You safegaurd yourself against the initial depreciation of the new car
6 169947 301720 1420501 (B) You have saved up enough to pay cash for the used car
7 0 256462 1727778 (C) You dont have a car loan to pay!
0 0 0 0 (D) Car experts would agree with this but would probably recommend a 2-year old car
0 0 0 0 A car is the biggest thing you will buy which will go down instantly in value
0 0 0 0 So think before you take a car loan
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
When you drive out of the showroom the car depreciates in value by about 20%.
You could change this in cell C10 but its not a good idea!
After that each year the car depreciates by 15% as recommended by the govt! Assuming normal wear and tear only!
Notice that the depreciation is rapid initially and slows down as years go by
* Corpus from EMI: Suppose you dont take the loan but invest an amount equal
to the EMI a safe instrument like a recurring deposit at annualised growth rate of 8%
(RDs are compound quaterly but annual compounding should be close enough)
I have neglected tax on the corpus saved. This will make a difference but not enough to favour taking a car loan!
Buying a used car which is between 2-4 years old sounds
(A) You safegaurd yourself against the initial depreciation of the new car
(B) You have saved up enough to pay cash for the used car
(C) You dont have a car loan to pay!
(D) Car experts would agree with this but would probably recommend a 2-year old car
A car is the biggest thing you will buy which will go down instantly in value
So think before you take a car loan