It didn't happen by accident. It takes a huge amount of marketing and PR to convince people. People are told they can't be a good father without the latest SUV or if they buy this sleek saloon their wife will suddenly loose 100 pounds or a new sports car is going to make them ten years younger.

Governments are easily coerced into supporting this through road building programs or wars to keep the cost of oil down.

You might think someone able to accumulate a reasonable amount of money is more rational but then I just read that Aston Martin sales are suffering because the latest James Bond film is late.

I doubt India will be any different, you will be catching up soon enough.

A lot of people see a car as a perpetual monthly expense and they are fine with that. Rather than seeing an 84-month loan as a large debt, they see a manageable expense. Outside of COVID, people are generally optimistic about their income staying the same or rising.

Also, cars are pretty neat and we have access to the best from around the world. It’s a popular hobby here to be interested in nice cars and trucks and enjoy driving them. The country is huge and beautiful so driving is rewarded by the destinations.

Safety is also valued, so many people prefer to do mundane commuting in a more recent car with better rated airbags and crumple zones.

So to many people it’s worth getting an expensive car years earlier than paying cash, if they even consider paying cash.

So the 4k car would not pass our safety tests. So can't really compare that to American cars.

The cheapest "full size" car I know (not smart car or similar) is something like a Toyota Yaris (~15k base), most manufactures have something around here. They have 4 seats and passes all the safety tests.

For why finance: I counter with - why not. If I can buy something nicer than I can afford outright, with a payment that fits in my budget, why not? Borrowing money is a fanatic tool when used responsibly. Sure I could wait until I am 50 and save up the cash to buy a house.. or I can take out a loan and buy one at 22, and get 28 more years of enjoyment out of my house.