Owning a car in 2025 is more expensive than ever. While most people budget for the purchase price, the real cost involves several hidden and ongoing expenses that can quickly add up. Whether you’re buying a compact city car or a luxury SUV, it’s important to understand what you’re really paying for.
Purchase Price and Depreciation
The first and most obvious cost is the sticker price of the car. In 2025, car prices have risen due to inflation, increased demand, and higher manufacturing costs. But once you drive the car off the lot, depreciation kicks in immediately.
A new car loses around 20–30% of its value within the first year. Over five years, depreciation alone can cost you nearly 50% of the original price. For example, a ₹10 lakh car may only be worth ₹5–6 lakh after five years, regardless of its condition.
Fuel Expenses
Fuel prices are constantly fluctuating. In 2025, the average petrol cost in many urban areas is hovering above ₹100 per litre. If your car has an average mileage of 15 km/l and you drive 1,500 km per month, you’re looking at a monthly fuel bill of around ₹10,000.
Electric vehicles (EVs) offer a cheaper alternative in terms of running cost, but they have higher upfront costs and limited charging infrastructure in some regions.
Insurance Premiums
Car insurance is a mandatory recurring expense. Third-party insurance is the legal minimum, but comprehensive coverage is recommended and more expensive. In 2025, insurance costs have increased due to rising repair bills and claim rates.
Depending on your car model, the insurance premium could range from ₹6,000 to ₹25,000 annually. Add-ons like zero depreciation and roadside assistance can increase the cost further.
Maintenance and Repairs
Regular servicing, oil changes, brake pad replacements, and occasional part failures are all part of owning a car. Maintenance costs typically increase as the vehicle ages. For a mid-range car, expect to spend ₹8,000–₹15,000 per year on basic maintenance.
If your car is under warranty, you might save some money, but consumables and wear-and-tear components are still out-of-pocket.
Loan Interest and EMIs
If you finance your car with a loan, interest payments significantly add to your total cost. A ₹10 lakh loan at 9% interest over 5 years results in a total repayment of over ₹12.3 lakh.
Monthly EMIs, processing fees, and other hidden bank charges must be factored into your overall car budget.
Registration and Road Taxes
One-time charges such as registration fees, road tax, and fastag setup can range from ₹25,000 to ₹1 lakh depending on the car segment and your state regulations. These costs are usually bundled during the vehicle purchase but are often overlooked in planning.
Parking, Tolls, and Traffic Fines
Living in a metro? Be prepared to pay for parking — whether at work, malls, or residential complexes. Monthly parking fees in busy cities can be ₹2,000–₹5,000.
Add highway tolls and potential traffic fines, and this “miscellaneous” category can cost thousands more per year.
Tyres, Battery, and Other Consumables
Tyres typically need replacement every 40,000 to 50,000 km, costing ₹15,000–₹40,000 depending on brand and size. Car batteries usually last 3–4 years and cost around ₹5,000–₹10,000.
Other consumables like wiper blades, coolant, and air filters also add to your long-term ownership costs.
EV Ownership Considerations
If you’re considering an electric vehicle, factor in charging costs, home charger installation, and battery replacement down the line. EVs can be cheaper to maintain but may have higher depreciation and repair costs in case of electronic failures.
Final Thoughts
The real cost of owning a car in 2025 is much more than just the showroom price. From fuel and insurance to depreciation and maintenance, car ownership demands financial planning.
By understanding and preparing for these hidden costs, you can make smarter choices — whether you’re buying a new car, going for a used one, or considering switching to electric.
