Putting an end to doubt, Tata Motors chairman Ratan N Tata announced in January that the company will, indeed, sell a car for Rs 100,000, although that would be the price at the factory gate for the base variant.

Add to that, transportation, registration, insurance and sundry other costs, and it would still cost around Rs 125,000 on road.

So, you will be able to buy a new car for old car money.

Then, two weeks ago, Union Finance Minister P Chidambaram announced a cut in excise duty on small cars. A number of manufacturers responded by reducing prices of small cars by around Rs 10,000, give or take a grand or three.

The Nano is yet to go on sale -- that is expected around September-October -- but small car buyers have already started postponing their purchases.

The logic: if you can buy a basic but pristine new car for the price you would pay for a basic old car, it will be worth the wait.

After all, a new car, however cheap, is likely to give you trouble-free service for at least three years. Nobody can say that for an old car. Plus a new car is likely to come with a warranty for the first two years.

Photograph: Indranil Mukherjee/AFP/Getty Images

Image: Prospective car buyers pause as they inspects cars at an used car market in Bangalore