Buying your first car in India can be an exciting experience, but the vast majority of first-time buyers have no idea where to start. They are easily lured by flashiness and overlook what’s really needed. This guide will help you through every step of buying a first car.
Step 1: Set your total budget (road-ready price, not ex-showroom price)
Many first-time car buyers focus on the wrong metric for setting their budgets for the first car. Here’s what you need to include while setting your first car budget.
Ex-showroom price
Road tax / registration charge (varies from state to state, around 8-15% of ex-showroom price)
Insurance (comprehensive, with zero-dep add-on if possible)
Accessories (floor mats, film, etc.)
Extended warranty / service package (optional)
As a rule of thumb, you should add 20% to the ex-showroom price to arrive at a realistic on-road price. Your first car should not cost more than 30-40% of your annual income to reduce the EMI burden.
Step 2: Think about your usage and the roads you drive on
Many first-time buyers fall into the trap of choosing a car based on engine size and power, instead of matching the car to their usage. These are some crucial questions to ask yourself when considering the usage pattern.
How much will I be driving the car every month?
Less than 800-1,000 km: Petrol or CNG would suffice.
More than 1,500-2,000 km per month with lots of highway driving: Consider diesel or a petrol/CNG variant with a high mileage.
What is the ratio of driving on the highway vs in the city?
More city driving / stop-start traffic: Prioritise comfort and ease of parking. Look for cars with light steering, good visibility and manageable size.
More highway driving: Look for stability at higher speeds, comfort and good brakes.
What are the driving conditions like?
Mostly bad roads with lots of speed breakers and water-logging: Look for higher ground clearance.
Mostly good roads in the city: Consider a hatchback or sedan for greater comfort.
Step 3: Decide on the fuel type (petrol / diesel / CNG / EV)
The choice of fuel has a large impact on the running cost of the car. It is essential to understand which fuel type is best suited for your needs.
Petrol
Best suited for: City driving, low mileage (under 1,000-1,200 km) per month and first-time buyers.
Pros: Lower initial price, good variety of models, easier maintenance.
Cons: Higher cost per km compared to diesel, CNG or EV.
Diesel
Best suited for: Long distance driving (1,500-2,000+ km) per month, frequent highway driving, and a long-term ownership (5+ years).
Pros: Higher mileage on highways, cheaper cost per km if driven more than 1,500 km per month.
Cons: Higher initial price, maintenance cost and uncertainty about future availability.
CNG
Best suited for: City driving with an average of 1,000-2,000 km driven per month, and looking for the lowest running cost without going electric.
Pros: Lowest cost of all fuels per km driven. Factory-fitted CNG is a safe option.
Cons: Limited choice of CNG cars, slightly smaller boot space and availability in some areas.
Electric Vehicles (EV)
Best suited for: Predictable routes (office-home-school), home/office charging availability and driving 1,000+ km per month.
Pros: Lowest running and maintenance cost, instant torque, zero tail pipe emissions.
Cons: Higher initial price, range anxiety and charging infrastructure.
Step 4: Decide on a body-type (Hatchback / Sedan / SUV)
Based on the roads you drive on and family requirements, you should pick a body style that suits you the most.
Hatchback
Best suited for: City driving with a small family and / or on a tight budget.
Pros: Easy to find parking, best mileage, lowest price.
Cons: Smaller boot, less ground clearance.
Sedan
Best suited for: Highway driving, large boot requirement and comfort-focused rear seating.
Pros: Comfortable seats, stable at high speeds, big trunk.
Cons: Lower ground clearance and price than a Hatchback.
SUV / Crossover
Best suited for: Bad road conditions and higher ground clearance.
Pros: Higher ground clearance, larger cabin.
Cons: Most expensive, lower mileage and higher ownership cost.
For most first-time buyers in a metro / city, a Hatchback or a compact SUV/Crossover is a good choice.
Step 5: Focus on safety features and comfort
First-time buyers should spend time looking at the car’s safety features. At a minimum, look for the following:
Airbags – at least two but preferably six.
ABS with EBD
ESP / ESC
Rear parking sensors and preferably camera
ISOFIX child seat mounting points if you have or plan to have children.
Global NCAP / Bharat NCAP rating– look for a 3-star or higher rating.
Useful comfort and convenience features for first-time buyers:
Touchscreen infotainment with wireless or wired Android Auto and Apple Carplay
Steering-mounted controls for audio, phone calls
Auto headlamps and wipers– especially for highway driving
Hill-hold assist if you drive on hilly roads or have to negotiate steep inclines.
Do not get tempted by too many fancy features that may push your budget higher or compromise on other features.
Step 6: Do a test drive (with a checklist)
It is crucial to do a test drive before finalising the car. A good test drive should be at least 20-30 minutes in duration and include the following:
City traffic: Look for ease of navigation through traffic, U-turns, and parking in a tight spot.
Speed breakers and bad road patches: Test the comfort on bad road conditions.
Open stretch / highway: Test how stable the car is on the highway.
During the test drive, evaluate the following:
Feel of clutch, brake and accelerator (manual cars) or AMT/CVT/DCT (automatic cars)
Weight and visibility of the steering
Comfort of the seats and driving position.
AC performance with all windows up and fan on high
Listen out for any rattling or strange noises on bumps
If possible, do a back-to-back comparison of 2-3 cars that you are considering.
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Step 7: Think about service network, resale value and ownership cost
A first car is often meant to be upgraded after a few years. Think about the following while comparing cars:
The location of the nearest service centre. Ideally, it should not be more than 25-30 km away from your home or office.
Cost of spares and service – ask existing owners of the same model or look up online forums.
Resale value of the car – certain brands and models retain their value better.
Actual mileage and service cost – compare with other similar cars.
Some brands may have a good reputation but a weak service network, while others may offer a slightly lesser initial ownership cost but have a much lower resale value. Do your research on the ownership cost of different cars before finalising your purchase.
Step 8: Carefully consider financing, insurance and paperwork
If you are considering a loan to finance your first car, compare offers from at least 3 different lenders (your bank, a PSU bank and an NBFC). Understand the processing fees, prepayment charges, and the loan tenure. Ideally, the EMI should not be more than 15-20% of your monthly income.
When it comes to insurance, it is always advisable to go with a comprehensive policy. You can also look into a zero-depreciation add-on for the first few years of ownership. You can also shop around for a standalone comprehensive policy and compare the quotes with the one offered by the car dealer.
Before taking possession of your new car, cross-verify the following documents:
RC, insurance policy, warranty card, service book, owner’s manual
The two keys (main and spare), tool-kit, jack and spare wheel
The manufacturing date of the car (most cars in stock should not be more than 3 months old)
The odometer reading (should be under 100 km)
Pre-delivery inspection of the car- body, tyres, lights, AC and all electronics.
Picking your first car is all about budget, safety, running cost and simplicity. Having said that, you should know your requirements and avoid getting tempted by flashiness. Follow this comprehensive buying guide to ensure that your first car is not only a safe but also a comfortable investment.
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