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Is It Cheaper to Buy or Rent a Car Long Term in India?

First published: 15 January 2021 @ 4:21 pm

It’s hard to find exact data on the cost of car ownership in India. But we are fairly sure that you can buy a mid-sized sedan for less than the cost of renting one.

The most common price for a mid-sized sedan in India is around $15,000 to $20,000.

We found several reports from expats who bought cars in India for between Rs1 million and Rs1.5 million (between $15,000 and $22,500). They paid an additional Rs200,000 to Rs300,000 ($3,200-$4,800) for the shipping costs from England or Australia. The car was shipped by plane to Delhi or Mumbai and then driven across the country.

Of course there are many other costs associated with buying a car in India that don’t apply if you rent one long-term:

  • Inspection fees to get it through customs (around Rs10,000)
  • Registration fees (around Rs50,000)
  • Taxes on registration (around Rs30,000)
  • Local taxes and duties (around Rs50,000)
  • Cost of shipping your own car over from abroad if you can’t find one here (around $5-7k for shipping alone).
  • Shipping company fees – insurance and port taxes as well as agent commissions (up to 20%)
  • Gasoline at least until you’re stable in your job and can find a carpool partner
Is It Cheaper to Buy or Rent a Car Long Term in India?

In total, you could spend up to $22,000 on the car itself including shipping. Then you have to buy a local insurance policy (around Rs100-200k per person) and also pay the annual road tax (around Rs5,000 per year).

Before adding up the costs of private driving lessons, parking fees at your apartment complex or gated community, or any repairs that may be necessary.

Having said all of this, several expats said that they bought their cars for around $15,000 to $20,000. They had it shipped over from abroad and then paid an additional Rs500-Rs1,000 per month for 5 years in order to keep it insured.

After paying these fees for 5 years they owned their car outright. They say this was cheaper than renting long-term. But if you don’t want to make monthly payments or if you don’t want to come up with the money upfront for a car purchase you might do better renting on a monthly basis instead.

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