purchasing the car is  one transaction resulting in having an asset worth 5,000.  (It is not an expense, but an investment & shows up on balance sheet not P&L)

having a loan is one transaction resulting in having a liability of 4,000.  Loan Balance also shows up on P&L.

when you make a loan payment, you need to show the principle paid to the liability account so the Balance Sheet improves

& the amount of interest paid should be posted as an expense which will show up on the P&L. 

At year end you can make a depreciation entry (our accountant gives us a list of adjusting journal entries for depreciation) I'm doubt if India's rules are identical to USA rules.  Our depreciation shows in P&L as expense & also in  Balance Sheet as a reduction in worth of car.