Buying Your Car On Finance – The Complete Guide.

[TSIVipul]

@Eartiga_ZMR:
Buddy have a look at the chapter 3 and 4 and you will get the answer to nearly all your queries.
Since car loan does not give nay tax advantages and all hence they are not that advisable to be taken.

I think before taking money from all people as you have mentioned above,just first of all take all their income tax payments and ITRs filed to your CA/Income tax advocate and then the way he/she guides you is the way to go.Why?Because your plan is 100% correct,no issue at all but this can get those people in trouble with income tax department if by mistake they gift you more money than they can do in the views of the income tax department.

In other words..ITS A VERY COMPLEX PROCESS AND HENCE RUN TO THE CA/ADVOCATE BEFORE PROCEEDING FURTHER..My best wishes are with you...

Will come up with a small extension soon...

 

[ERTIGA_ZMR]

Re: Buying Your Car On Finance – The Complete Guide.

@Eartiga_ZMR:
Buddy have a look at the chapter 3 and 4 and you will get the answer to nearly all your queries.
Since car loan does not give nay tax advantages and all hence they are not that advisable to be taken.

I think before taking money from all people as you have mentioned above,just first of all take all their income tax payments and ITRs filed to your CA/Income tax advocate and then the way he/she guides you is the way to go.Why?Because your plan is 100% correct,no issue at all but this can get those people in trouble with income tax department if by mistake they gift you more money than they can do in the views of the income tax department.

In other words..ITS A VERY COMPLEX PROCESS AND HENCE RUN TO THE CA/ADVOCATE BEFORE PROCEEDING FURTHER..My best wishes are with you...

Will come up with a small extension soon...

Remaining 3 lakhs as cash, I can declare it as my saving as wedding gift cash and some saved cash. Even my bank statements show that I have withdrawn frequent cash. BTW my salary is >11 , so I assume it wont be any issue. Even mt wife works well.

 

[TSIVipul]

Hmmm,buddy going by your salary and the arrangements you have made,I think you can go for the way you have planned.
Just show most of the possible money as either a gift or loan from relatives and go for the car.We too buy the cars for cash,but before that we rush to CA for anything.

Okay take it this way:-
Wedding gift=3 lacs_______________No issue.
Your savings=2 lacs_______________No issue.
Gifts and loans from relatives=4 lacs__No issue
And some more minor tricks and you can go for the car for cash itself.

But take care,don't get any innocent relative of yours trapped in the ITR issues taking more than permissible amount from them.

 

[dr_sachin]

Brilliant piece of work from vipul,so much of effort ,time,calculations and very impressive discussions,its really great.

i have not read that when i bought my cars,but i follwed most of the steps as vipul elaborated during purchase of my second car(may 2012),and i am quiet happy.but one thing is for sure,buying a car,this simple thought is so addicting that once it comes in your mind(ofcourse you must be something to think this),it makes even an intelligent person,insane,and thats the time which decides who is really wise.the one who can hold his nerves and think twice really succedes while the one who was taken away by the thought fails.

may be we know most of the things and we know that what we are doing may put us into the dangerzone,but still its the thought which rules in the end.this must have happpened with many of us(i accept my first honda city was the result of this thought,then it met with an accident and suddenly after that i became wise).

as our elders say KHUD KE MARE BINA SWARG NAHI DIKHTA,i feel its very true,because i learnt many things only after my car's accident.
after reading and understanding what vipul described i personally think that it will help many of the buyers choosing wisely.

 

[TSIVipul]

Thanks Dr_Sachin.
You followed these steps before buying the car and that's the reason that you replaced your City with a City itself in a short time.This is called the financial planning and its effects.
Financial planning is not the family planning like we will have 2 kids one house and one car and some savings.
Instead financial planning is related to the responsibilities/liabilities of a person and issue is that they changes very fast.
As people say,having a kid takes 9 months,but having any financial emergency does not take even 9 seconds.So if one moves with his/her finance planned then we can easily deal with those emergencies.
One real life example:-
You are a doctor and you may be knowing about the expenses of medical treatments.Last year when we friends met a road accident then we friends spent some time in ICU too and at last there was a bill of some lacs when I was discharged from the hospital.Now this was a financial emergency and how this was coped,but strict financial planning.

Rest this thread still needs a lot more additions,but the thing that really hurts me is seeing may young people selling their cars off with a broken heart without nay smile on their face but a disappointment of getting parted from their set of wheels.

 

[mukeshus]

Re: Buying Your Car On Finance – The Complete Guide.

Vipu hope you have your Mediclaim policy.

If not get yourselves covered, can't say when emergency situation arises.

 

[TSIVipul]

^^Haha,buddy last time too 50% of all the expenses were paid by ICICI Prudential only..do I need to say anything else?
My father and mother both have been very practical and this gave me an advantage from the childhood,that before spending even a 100 rupee note,its planned,its planned to churn out the best of it in every situation.
We are really very very serious about the financial planning in every thing.

Let's add something more to the thread:-
Many people confuse themselves thinking that 'budget' planning and 'financial' planning are same and hence fail in planning their money,but pass in planning their expenses.This shows its effects in long term.
As per my research and survey:"Job doers are the worst finance planners and best budget planners"(No offense to any Job doer)and this is the reason after an age of 60,a businessman is expected to have more than 10 times the money a job doer who has been earning nearly same as the businessman has with him.
And hence its advised that job doers must approach finance planners for themselves.

So the basic difference between 'budget' and 'financial' planning is that in the budget you plan the money(yours) you have or likely to have,while in financial planning you have to plan the money you don't have added to the budget planning.Or in other words,in financial planning you have to plan the most efficient and profitable use of the money of other people/bank too which is in your hand.

Here is a small example of financial planning,this was done by me,myself when we bought Laura:-

According to CA,the highest amount we could pay for a car in cash was 15.6 lacs.
The cars considered were Laura TSi,Civic and Laura TDI A/T.
Civic 'V' M/T was costing us 14.81 lacs.
Laura TSi was costing us 15.35-80k=14.55 lacs.
Laura TDI A/T was costing us 18.3 lacs.

So after calculations we concluded that,since Civic was liked by us,until we TDed the Laura.So civic went out in no time.

Now,with a price difference of about 4 lacs,we thought that TDI is diesel and TSi is petrol,so we calculated it this way:-
For TDI we need a loan of about 3 lacs=Added interest and per month EMI as the expenses.
And then we calculated mileage and all for 1 lac kms taking an average price of petrol as 70 kpl and found that we will be spending about 6 lacs on petrol for 1 lac kms.
And for TDI we were to spend about 3 lacs on diesel for TDI for 1 lac kms.

Then we calculated that 4 lac+interest+diesel maintenance+other expenses-3 lac=Buying TSi was a profitable deal for us.
Again we ran to CA and evil no.2..it runs on petrol and higher price of petrol means more money spent while movements for business/work which means lesser taxable income after all the petrol bills are added to ITR file.
This was one more profit.Overall,by spending this 3 lac more on petrol we will be saving a lot more tax too.
Hence,no thinking and TSi passed.
Since the car was bought after complete planning,hence running is also no issue for us!!

 

[TSIVipul]

Here is a good news guys:-
Considering the current state of economy,RBI my cut down the interest rates on all kind of loans.So,maybe this will help in case of car loans too.

 

[Mahendra]

It is a fantastic article written by you Vipul boy,I have read it completely and must say that if anyone follows it word by word then the man will never face any financial problem in his life.
You have wrote something that people with ages even double than you also do not think many times.

 

[vaibhav]

@tsi BUSINESSMAN has 10 times more money with same salary than salaried person of same income as they dont pay tax and put that ill gotten money in property which only rises in India
its not financial planning its theft

 

[TSIVipul]

Who said businessmen don't pay taxes?They do pay it,only its a fact that businessman+CA=tax saving heroes.

And yes,this is also a financial planning,and even if its a theft then also "Chor woh hota hai jo pakda na jaye"(Thief is the one who isn't caught).Job doers can't be thief also.

 

[Mahendra]

Re: Buying Your Car On Finance – The Complete Guide.

@tsi BUSINESSMAN has 10 times more money with same salary than salaried person of same income as they dont pay tax and put that ill gotten money in property which only rises in India
its not financial planning its theft

Boy you have some very big confusions in your mind.Yes businessmen save a lot of tax,but they fill also highest tax.
Yes it is a theft,but they are also done using the planning only my boy.

Who said businessmen don't pay taxes?They do pay it,only its a fact that businessman+CA=tax saving heroes.

And yes,this is also a financial planning,and even if its a theft then also "Chor woh hota hai jo pakda na jaye"(Thief is the one who isn't caught).Job doers can't be thief also.

Though it was a nice reply,but my boy you must always keep away from mentioning such words because at the end they just give others a bad impression.When you have written such a good report then now it is not good for you to make the reading experience bad with this type of comments.

In the topic you have mentioned some very valid points like how young boys and girls never make plans and then go over there budget and buy a big car.I too know many young IT professionals who earn very less than we people but have very big cars with them.And when I ask them why they spent all your money on the car then they very smartly tell me that they believe living in present one boy even one time told me that from his degree he can earn very high and hence he lives his own way,not having any degree or diploma makes me silent in front of them.

 

[mukeshus]

Re: Buying Your Car On Finance – The Complete Guide.

Yes even I feel, an IT professional must first gain financial stability, with the initial priority in investments.

After a few years once he is stable, must think of a car.

I mainly feel savings is important than meeting unwanted demands.

And I don't feel to buy a car with EMI, esp with loan.

Instead buying a car from one's own money is a peaceful affair, just my way of thinking.

We have never bought a car with loan.

Everyone is good at one thing or the other sir, so you should never feel that you don't have a degree.

You are good in your own way.

 

[TSIVipul]

Re: Buying Your Car On Finance – The Complete Guide.

Boy you have some very big confusions in your mind.Yes businessmen save a lot of tax,but they fill also highest tax.
Yes it is a theft,but they are also done using the planning only my boy.

+100..

Though it was a nice reply,but my boy you must always keep away from mentioning such words because at the end they just give others a bad impression.When you have written such a good report then now it is not good for you to make the reading experience bad with this type of comments.

Point noted down sir,will take care next time.

In the topic you have mentioned some very valid points like how young boys and girls never make plans and then go over there budget and buy a big car.I too know many young IT professionals who earn very less than we people but have very big cars with them.And when I ask them why they spent all your money on the car then they very smartly tell me that they believe living in present one boy even one time told me that from his degree he can earn very high and hence he lives his own way,not having any degree or diploma makes me silent in front of them.

Sir you are absolutely right.Actual its the fake standard of the young guys and girls which has resulted in this.
About degree part,people take them to get a good job,so that they can earn good money and I think you are already earning far more than those degree wallahs.Hence it is automatically a tight slap on the face of such guys.

Yes even I feel, an IT professional must first gain financial stability, with the initial priority in investments.

After a few years once he is stable, must think of a car.

I mainly feel savings is important than meeting unwanted demands.

And I don't feel to buy a car with EMI, esp with loan.

Instead buying a car from one's own money is a peaceful affair, just my way of thinking.

We have never bought a car with loan.

Everyone is good at one thing or the other sir, so you should never feel that you don't have a degree.

You are good in your own way.

+100 to every word mentioned by you buddy.

 

[Mahendra]

Haha,boy I liked your attitude of accepting the things suddenly.

these young boys and girls think of buying some expensive mobile phones and cars for them with there salary due to which they leave no money in there hands for any other expenses.Which result in all the things mentioned by you boy.