Radhika Gupta clarifies why luxury cars are depreciating assets

Radhika Gupta, Managing Director and Chief Executive Officer of Edelweiss Mutual Fund, explained why she chose not to buy a luxury car despite having the money for it. She admires high-end vehicles, but being aware of how high-end cars depreciate, she chooses an economical car and still gets excited about the Zomato coupon.

In a recent podcast, a Shark Tank judge shared how growing up in a middle-class family and not being able to own designer brands and luxury items made her feel less confident and insecure about herself. As one of the youngest CEOs in India, she no longer feels the need to prove her worth through expensive purchases.

“I can’t bring myself to buy a luxury car. I can afford it, but I just can’t,” Gupta shared. “Every time I think about buying one with a bonus, I remind myself that a car is a depreciating asset. I don’t even drive, and the moment I take it out, 30 per cent of its value is gone.”

Recalling the initial stage of her life when she was about 18 years old, fresh out of college, where people made her feel insecure about not being able to afford expensive things, she said, “Now, if someone asks why I drive an Innova, I can confidently say, ‘My life, my choice.’ I no longer feel the need to prove anything.”

Gupta shared a post on the X platform, highlighting how the younger generation is making risky financial decisions to sustain a luxurious lifestyle. “I have seen people in their 20s saying they don’t need to work because they are busy doing F&O. Young women who say their lifestyle and handbags are funded by trading gains,” she wrote.

In an X post, she added a screenshot of the Economic Survey of 2023-24, explaining, “The Economic Survey highlights this in some very strong language. Other regulators have also rightly and repeatedly warned us about this.” She stated that this sort of liquidity is alarming for individuals as well as the economy, and it is high time for society to take action.

My statement about not being able to buy a fancy car seems to be everywhere, and lots of car companies are sending fun messages 😀

But the real idea was to talk about the deeper parts of money. About our fears and insecurities that influence how we save and spend, about how we… — Radhika Gupta (@iRadhikaGupta) September 16, 2024

Stunned by how much attention her statement has sparked and how the public is taking it humorously, Gupta shared a post on X explaining the real motive behind her words. “The real idea was to talk about the deeper parts of money. About our fears and insecurities that influence how we save and spend, about how we improve our relationship with money and feel comfortable with the decisions we make. A difficult topic, but as important if not more than discussing investing.”