The useful bit: Count the purchase price once. Add financing interest and ownership costs, then subtract assumed resale proceeds.
Separate buying the car from using it
An EMI is a financing payment, not the whole cost of ownership. Cash buyers do not have an EMI, but they still pay for the vehicle, insurance, fuel and maintenance. A useful comparison starts with costs common to both routes.
Our car model begins with the on-road price you enter, then adds fuel and annual upkeep over the ownership period. It adds loan interest when borrowing is entered and subtracts the expected resale amount at the end.
Avoid the principal double count
Consider a ₹10 lakh car funded with a ₹2 lakh down payment and an ₹8 lakh loan. The ₹10 lakh purchase price already contains both funding sources. Adding all EMI repayments on top of that price would count the ₹8 lakh principal again.
Instead, add only the interest charged for the loan. If you build an alternative model starting from the down payment plus all loan repayments, do not add the full purchase price as well. Either approach can be consistent; mixing them is the problem.
Use the distance you actually expect
Fuel quantity is annual kilometres divided by kilometres per litre. Multiply by the entered fuel price and the years of use. This is a deliberately simple constant-cost model: it does not forecast fuel-price changes or changes in your travel pattern.
The upkeep field combines the yearly costs you choose to include, such as insurance and servicing. The resale value is a scenario, not a quotation. A lower resale value increases modelled ownership cost.
Keep the model’s boundaries visible
The current model requires any loan to end within the ownership period. It does not model early settlement, remaining debt at sale, business deductions, GST credits or company-car taxation. It also excludes investment opportunity cost.
The average monthly figure spreads net ownership cost across the entire period. It is not a prediction that your actual monthly cash outflow will be identical. Use the estimate for structure, and keep real quotes and contractual figures separate.