Two real costs, compared for the same car
Driving that ₹10,00,000 car 15,000 km in a year, at 18 km/l and ₹100/liter, costs ₹83,333.33 in fuel. The same car's depreciation in its first year — dropping from ₹10,00,000 to ₹8,50,000 at a 15% annual rate — is ₹1,50,000, or 1.8 times the fuel bill for that same year.
Where the two costs cross over: year 5
By the fifth year, the car's value drops from ₹5,22,006.25 to ₹4,43,705.31 — a loss of ₹78,300.94, now less than the same ₹83,333.33 annual fuel cost. Depreciation, which starts out dwarfing the fuel bill, ends up smaller than it by year 5 — the two costs cross over somewhere in between.
Why depreciation shrinks while fuel cost stays flat
Fuel cost depends only on how far the car is driven and its mileage — neither changes with the car's age, so the ₹83,333.33 figure repeats every year the driving pattern stays the same. Depreciation, by contrast, is a percentage of an ever-shrinking value, so its rupee size keeps falling year after year even at a constant rate — the two costs are on fundamentally different trajectories.
What this means for budgeting a car's true running cost
A new car owner focused only on the fuel gauge is missing the larger cost in the early years — depreciation, not fuel, is usually where the bulk of a new car's "cost of driving it" actually goes. That balance shifts with age: an older car's total cost of ownership leans more toward fuel (and, realistically, maintenance) as depreciation tapers off.