Most aspiring taxi owners have a clear idea of the vehicle they want and only a vague idea of the cash they need to start. The down payment is where plans usually meet reality — and it is consistently larger than first-time buyers expect, because the deposit is only part of the money required on day one.
What Lenders Ask For in 2026
- Public sector banks: 20 to 25 percent of vehicle value, the lowest interest rates at 9 to 12 percent, and the strictest documentation
- Private banks: 15 to 25 percent, interest 11 to 15 percent, faster approval
- Non-banking finance companies: 10 to 20 percent, interest 14 to 20 percent, most willing to lend against a limited credit history
- Captive finance arms of manufacturers: 10 to 15 percent on newer vehicles, often with promotional rates on specific models
- First-time commercial borrowers with no existing vehicle loan history: expect the top of whichever band applies
Used commercial vehicles attract higher down payment requirements than new ones, because resale value is harder for a lender to predict. On a vehicle older than seven years, many lenders decline entirely or demand 30 percent or more.
The Real Day-One Cost
The deposit is not the whole number. On a ₹6,00,000 used Dzire Tour CNG with a 20 percent down payment, the actual cash needed looks like this:
- Down payment at 20 percent: ₹1,20,000
- Commercial insurance, first year: ₹28,000–45,000
- RC transfer and RTO charges: ₹5,000–12,000
- Permit endorsement or renewal: ₹8,000–25,000 depending on type
- Loan processing fee, typically 1 to 2 percent: ₹9,600–19,200
- Immediate maintenance and wear items on a used vehicle: ₹20,000–40,000
- Realistic total to get earning: ₹1,90,000–2,60,000, not ₹1,20,000
What the Down Payment Does to Your EMI
On the same ₹6,00,000 vehicle at 14 percent over four years:
- 10 percent down (₹60,000): EMI approximately ₹14,750, total interest roughly ₹1,68,000
- 20 percent down (₹1,20,000): EMI approximately ₹13,110, total interest roughly ₹1,49,000
- 30 percent down (₹1,80,000): EMI approximately ₹11,470, total interest roughly ₹1,31,000
- Every additional 10 percent deposited saves roughly ₹1,640 a month and around ₹19,000 in total interest
There is a genuine trade-off here. A larger deposit reduces the monthly burden, but cash held back as working capital covers the first months of fuel, driver salary and unexpected repairs — the period when most new operators fail, not for lack of demand but for lack of buffer.
Legitimate Ways to Reduce the Down Payment
- Show existing earning history: an operator with a running vehicle and documented income routinely secures 5 to 10 percent lower deposit requirements
- Add a co-applicant with a salaried income and clean credit record
- Buy a vehicle under five years old — lenders treat newer commercial stock far more generously
- Provide collateral or a guarantor, which several NBFCs accept in place of a larger deposit
- Improve your CIBIL score before applying: above 750 shifts you into materially better terms across every lender category
A Warning About Zero Down Payment Offers
Advertisements promising a commercial vehicle with no deposit almost always fund the deposit through a second, higher-interest personal loan, or inflate the vehicle price to cover it. The effective cost is typically 4 to 8 percentage points above a normal commercial vehicle loan. Read what is actually being financed before signing anything.
A Sensible Rule of Thumb
Plan for the down payment plus 60 to 70 percent of that amount again in ancillary costs and working capital. If you can only just cover the deposit itself, buy a cheaper vehicle. Starting with a ₹3 lakh WagonR CNG and a cash buffer beats starting with a ₹6 lakh Dzire and none.