India’s first-time car buyers are moving towards higher-value vehicles, with younger customers spending nearly twice as much on their first purchase compared with earlier generations, according to Kotak Mahindra Prime Ltd (Kotak Prime).
The company said buyers in their mid-20s and early 30s are increasingly opting for vehicles priced between Rs 5 lakh and Rs 8 lakh, compared with the Rs 1.5 lakh to Rs 2.5 lakh range typical of entry-level cars a decade ago. Some buyers are also stretching their budgets for compact SUVs, better-equipped variants and mid-segment models.
Suraj Rajappan, managing director and chief executive officer of Kotak Mahindra Prime, said the first-car category had evolved, with buyers prioritising safety, comfort, technology, resale value and affordability through manageable equated monthly instalments (EMIs).
The shift has been supported by a wider range of feature-rich vehicles, growing confidence in organised pre-owned car platforms and financing options. Certified inspections, warranties and transparent pricing have also made used cars more attractive to younger customers.
Kotak Prime has observed rising first-car loan ticket sizes, greater acceptance of loan tenures of five to seven years and disciplined repayment behaviour among younger borrowers.
The trend reflects rising aspirations, expanding urban mobility needs and growing household incomes. For many young Indians, the first car is increasingly viewed as a lifestyle investment rather than merely an affordable means of transportation.