Planning your first car? CA breaks down why a car loan could be a huge financial mistake

That first car — it’s a milestone that screams freedom, independence, and adulthood. But if it comes with a monthly EMI, it might just chain you down instead. CA Nitin Kaushik recently took to X to issue a blunt reality check: Your first car should not come with a loan. And he’s got solid reasons why.

Instead of rushing into a shiny new vehicle fueled by peer pressure or FOMO, Nitin suggests a smarter, stress-free approach: start small. Opt for a second-hand or budget car that lets you learn the ropes — from driving and maintenance to managing real-world expenses. And if you accidentally scratch it? It won’t break your heart — or your bank balance.

The biggest win? No EMIs. That means no stress over monthly payments, no interest quietly draining your salary, and more room to breathe financially. As Nitin points out, there are better ways to build a credit score — like using a credit card wisely or taking a small personal loan, if needed.



Then there’s the harsh truth about cars: they’re depreciating assets. The moment you drive a new one out of the showroom, its value drops by 15–20%. Fast forward five years, and that car is worth barely half of what you paid — while you’ve shelled out lakhs in EMIs and interest. A typical ₹12,000 monthly EMI over five years? That’s over ₹8.2 lakh spent for a car that might be worth just ₹3 lakh by the end.

Nitin’s advice is clear: if you can’t afford the car in cash, downgrade the model — not your peace of mind. Your first car should give you freedom, not financial baggage.