Car vs Wealth: Financial expert explains why your EMI mindset is costing you big

A sharply worded LinkedIn post by Sunil Gurjar is striking a chord with India’s salaried class, challenging one of the most common financial habits in the country: buying cars based on monthly EMIs rather than actual affordability. 

Gurjar, founder of Alphamojo and Wealthmojo, argues that many Indians are “getting it completely backwards” by equating affordability with manageable monthly instalments. The result, he says, is a growing tendency among young earners to take on disproportionately large car loans early in their careers — often at the cost of long-term financial stability. 

The EMI illusion 

At the heart of Gurjar’s argument is what he calls the “EMI illusion.” A monthly payment of ₹8,000 may feel reasonable, but it can translate into a loan of ₹8 lakh or more — sometimes for individuals earning just ₹30,000 a month. In such cases, buyers may end up committing the equivalent of over two years’ income to a single depreciating asset. 

This pattern, widely visible across urban India, reflects a broader cultural shift where lifestyle upgrades often outpace income growth. Easy financing, aggressive marketing, and social comparison have only accelerated the trend. 

A simple rule of thumb 

Gurjar proposes a straightforward benchmark: a car should not cost more than 12 to 15 months of one’s salary. By that logic, a person earning ₹50,000 a month should ideally cap their car budget at ₹7-8 lakh, while someone earning ₹1 lakh monthly could stretch to ₹12-15 lakh. 

The rule, though simple, cuts against prevailing consumer instincts, where aspirational purchases often take precedence over financial prudence. 

The depreciation reality 

Unlike property or equity investments, cars are inherently depreciating assets. Industry estimates suggest that a new car can lose 15-20% of its value the moment it leaves the showroom, and more than half its value within five years. 

That makes overspending on a vehicle particularly costly — not just in terms of upfront expense, but also in missed opportunities. Money tied up in high EMIs is money that could otherwise be channelled into systematic investment plans (SIPs), emergency savings, or education funds. 

Aspirations vs Assets 

Gurjar’s post also taps into a deeper social dynamic: the pressure to signal success. From neighbours upgrading to SUVs to colleagues showcasing new purchases, the psychological push to “keep up” often drives financial decisions. 

But as he points out, those external influences rarely share the burden when repayments become stressful. 

A Decade-Long Perspective 

The most compelling part of Gurjar’s argument lies in its long-term framing. Over a decade, even a modest monthly investment can grow significantly through compounding. In contrast, money spent on EMIs yields no financial return beyond utility — and declining resale value. 

“Ten years from now, nobody will remember what car you drove,” Gurjar notes, underscoring the fleeting nature of such purchases. “But you will absolutely feel the difference” between investing consistently and overspending on lifestyle upgrades. 

As India’s middle class expands and credit becomes more accessible, Gurjar’s message arrives at a critical moment. It reframes car ownership not as a milestone of success, but as a financial decision that must be weighed against long-term goals.