What Car Should Be Bought at What Income?

[ERTIGA_ZMR]

neither a borrower nor a lender be-buy only what you absolutely need;
If you are buying on loan out of necessity finish it soon and then keep your vehicle as long as you can -needlessly upgrading instead of small repairs-DON'T!
Financial fundamentals our parents followed,which seemed to hold them in good stead!

I totally agree with you on this, my father is dead against of loan and if there are he asked to get rid off ASAP. Our parents orthodox of saving is classic example that nothing can imbalance the financial status like a recession and other. They have kind of preference as
1: Education for kids
2: Home and property
3: Daughter marriage
4: Buffer amount for any emergencey.

Once all acheived then invest into luxury.

Now what we do:
1: Car on EMI.
2: Home on EMI.
3: Phone on EMI etc etc..

Yes with time changed we try to achieve at 30 what parents did at 50 year. And there is no harm in this if we know what is limitation and how can emergency situation can be handled.

No one can advice any one of their financial decision or what they planning to buy.

 

[anshuman8]

One of my collagues earns 50k per month and lives on rent for 13k .
He plans to buy a vento on loan

It depends on what other liabilities the person have. If he is a bachelor and no other loans to pay off, paying 10k+ EMI for Vento should not be that difficult.

 

[Bopanna]

Reminds me of the lyrics of the 90s country song "Daddy was never the Cadillac kind" by Confederate Railroad. The song is a tribute to singer's father who was financially conservative and didn't approve of taking loans to buy a flashy car (the Cadillac) as it really is a depreciating asset. Somehow this song always played in the back of my mind when I made a recent car purchase and didn't stretch my budget to take a loan.

"
I left home right out of high school
Bought me a big car thought I was real cool
Cruisin' around the old neighborhood
I'd see Dad after church on Sunday
I'd say you'll have to go riding with me someday
He just said no, I never understood
He asked me how I bought it, I told him on credit
Daddy just smiled, I'll never forget it
"

Enjoy:
Confederate Railroad - Daddy Never Was The Cadillac Kind (Official Video) - YouTube

 

[macsvin]

My opinion is slight different. Whatever my take home is I purachse car which i can afford with 100% downpayment from savings. I have a habbit for last 10 years that I save in different banls for different purposes. Once I reach a derired amount of savings I will use it for my purchase. Although as per my take hom I would be easily manage to purchase a 10L sedan but I ended up purchasing Beat Petrol since I had only that much amount left after saving for past 3 Yrs.

 

[pravin1987]

this is a interesting thread. i was doing a online job right from 2008 and i was making consistently around 10,000 per month and i got my first bike cbz instead of ninja as my dad said " look down before you leap" and after getting i had enough money to run and maintain it. i have sacrificed my dream but financially i was a bit strong.

next part comes after graduation( didn't complete degree still now), got a job with a take home of 18,000 per month and incentives are extra. i get around 22,000 per month consistently with incentives and also the online job gave me a good income.

next part is getting a car as replacement for my maruthi 800, we were ready for the car at 5 lakhs. the high intrest rates and burden of emi and petrol cost was against it and also the space constriant for 5 people and luggage during long drive wasn't satisfied by hatchbacks. we didn't consider eeco and versa.

this was my calculation during the time of getting the used safari: I made sure that i earn 30,000 per month by increasing the time spent over the internet job.

income: 30,000(22,000 from job and 8000 from internet job)
fuel for car: daily running of 40 kilometers. i use it 10 days in a month. mileage calculated at 10 kilometers per liter and one long drive. 4000 rupees for fuel.
maintenance: save 7000 per month
insurance: save 1000 per month
other expenses: 7000.

i was lucky. the worst mileage that my safari gave is 9.2 and best is 15.3. the car is running strongly and i pray it doesn't burn my pocket apart from periodic service.

so i could save 10,000 per month. if i had taken the loan, things would be different. i have 2 account, the savings is always maintained in a separate account.

 

[Mathew]

This is an interesting topic. I recall the Bankers Algorithem learned as part of curriculum. The algorithm is in Advanced Operating System subject, of computer engineering.

The banker algorithm allows:

• mutual exclusion
• wait and hold
• no preemption

Prevents:

• Circular wait
• User process may only request one resource at a time.
• System grants request only if the request will result in a safe state.

No getting into the Algorithm. More Details here.

Hence, go with incremental order as your income grows. Always have a buffer stock to meet unwanted expenses, and unknown expenses.

 

[researcher]

Hi Friends - This is very useful thread.
I have a question for you, specially members active in this forum.

I am in mid thirties and I am currently driving an automatic i10.

About my financial state: My monthly take home salary after taxes and other deduction is 1.4 lacs/ per months and from other sources i.e., rent from my properties 20000/per month.

I have some substantial savings from my previous life when I use to work hard as NRI. Which is equivalent to ~80X of my present take-home salary, I don't add-up interest from this corpus as my income and let it to add-up with the principal.

I live in my own house and so far I am debt-free i.e., no EMI on my heads. I have a child in kindergarten and my wife chose not to work.

My monthly expense is in tune of Rs 40,000/month, all inclusive. I have seen most of the world, therefore, don't expect big expenses in terms of holiday expenditure.

Kindly suggest me a car, which I can afford without feeling a pinch, preferably with automatic transmission, if I want to upgrade from my i10.

Warm regards

 

[sambit_mech]

Hi Friends - This is very useful thread.
I have a question for you, specially members active in this forum.

I am in mid thirties and I am currently driving an automatic i10.

About my financial state: My monthly take home salary after taxes and other deduction is 1.4 lacs/ per months and from other sources i.e., rent from my properties 20000/per month.

I have some substantial savings from my previous life when I use to work hard as NRI. Which is equivalent to ~80X of my present take-home salary, I don't add-up interest from this corpus as my income and let it to add-up with the principal.

I live in my own house and so far I am debt-free i.e., no EMI on my heads. I have a child in kindergarten and my wife chose not to work.

My monthly expense is in tune of Rs 40,000/month, all inclusive. I have seen most of the world, therefore, don't expect big expenses in terms of holiday expenditure.

Kindly suggest me a car, which I can afford without feeling a pinch, preferably with automatic transmission, if I want to upgrade from my i10.

Warm regards

It's all about priorities in life. When I had 17K salary, I bought an Alto and didn't feel the pinch ever. Today I own a Manza and my father drives the Alto. We don't feel pinch either. Both the cars are loan-free (Alto loan paid-off and Manza bought on cash).

I think it's better to have a home-loan running due to tax-exemptions we get. I have a home loan running and the property is put on rent.

But, remember to go for a sensible buying, I will never buy a Merc/Audi/BMW, rather I'll buy a property with that money. Saying this, since I am not rich and don't have crores in my Bank. So you are, I hope, since you said you are also a salaried professional (no offense meant).

 

[generalmax]

Hi Friends - This is very useful thread.
I have a question for you, specially members active in this forum.

I am in mid thirties and I am currently driving an automatic i10.

About my financial state: My monthly take home salary after taxes and other deduction is 1.4 lacs/ per months and from other sources i.e., rent from my properties 20000/per month.

I have some substantial savings from my previous life when I use to work hard as NRI. Which is equivalent to ~80X of my present take-home salary, I don't add-up interest from this corpus as my income and let it to add-up with the principal.

I live in my own house and so far I am debt-free i.e., no EMI on my heads. I have a child in kindergarten and my wife chose not to work.

My monthly expense is in tune of Rs 40,000/month, all inclusive. I have seen most of the world, therefore, don't expect big expenses in terms of holiday expenditure.

Kindly suggest me a car, which I can afford without feeling a pinch, preferably with automatic transmission, if I want to upgrade from my i10.

Warm regards

You had not given specific use of your car.
Since its an automatic that you want and considering a small family for the next 5 years you can go for a Polo GT Tsi .
Let us consider a loan amount of 6L after the exchange of your car (hypothetical).
11% interst rate for 5 years
EMI ~13K.
Which will not anyway harm your budget.

 

[researcher]

You had not given specific use of your car.
Since its an automatic that you want and considering a small family for the next 5 years you can go for a Polo GT Tsi .
Let us consider a loan amount of 6L after the exchange of your car (hypothetical).
11% interst rate for 5 years
EMI ~13K.
Which will not anyway harm your budget.

Thank you Generalmax - My i10 is 2010 model, however, looks in mint conditions as my car cleaning-help does good job every week with cleaning and waxing. How do you think about those parallel shift cars (mid range)?
Cheers

 

[Vishwas]

Hi Friends - This is very useful thread.
I have a question for you, specially members active in this forum.

I am in mid thirties and I am currently driving an automatic i10.

Kindly suggest me a car, which I can afford without feeling a pinch, preferably with automatic transmission, if I want to upgrade from my i10.

Warm regards

That is a wise thing to save money, you could safely think of buying Verna A/T(around 13 lakhs) if diesel or polo GT Tsi (below 9 lakhs) if petrol, think over again and if you leave auto transmission apart, there's an ocean out to select a car of your choice.

 

[Mathew]

Hi Friends - This is very useful thread.
I am in mid thirties and I am currently driving an automatic i10.

Kindly suggest me a car, which I can afford without feeling a pinch, preferably with automatic transmission, if I want to upgrade from my i10.
Warm regards

Hi researcher, welcome to TAI.

You will be comfortable for a total expense 50% of your income. You can stretch this equation upto 75% of your income for new ventures. Risky, expense more than 75% of income. Hence, identify an amount which is within your comfort zone. Now you will be a position to answer the question, how much you can afford? Choose a vehicle according to family size, your status, and the amount you can afford. Anyway go with latest vehicles. I suggest Honda City 2014 (you are using i10, family size less).

 

[behaln]

Wow. This is one thread which would enlighten a lot of souls in search of cars. Thank you all who have contributed their inputs to make this thread a true eye opener.
I have aloe got a lots of my doubts cleared regarding my next big purchase and where to put my hard earned gandhig's.

 

[researcher]

Hi researcher, welcome to TAI.

You will be comfortable for a total expense 50% of your income. You can stretch this equation upto 75% of your income for new ventures. Risky, expense more than 75% of income. Hence, identify an amount which is within your comfort zone. Now you will be a position to answer the question, how much you can afford? Choose a vehicle according to family size, your status, and the amount you can afford. Anyway go with latest vehicles. I suggest Honda City 2014 (you are using i10, family size less).

Thanks Mathew for your valuable insights

I have my eyes set on Honda City A/T too. The total cost I expect is ~10X of my monthly savings (in-hand cash left after meeting my monthly expense). I am planning to pay it with hard cold cash and may can get some neat discount if I procure it through CSD canteen through my Dad.
Also, around how much cash do you think (approximate figure) I can make available by exchanging/selling my 2010 i10 A/T Magna (25K km) in 2014, it is in near mint condition.

Warm regards

 

[generalmax]

Hi Friends - This is very useful thread.
I have a question for you, specially members active in this forum.

I am in mid thirties and I am currently driving an automatic i10.

About my financial state: My monthly take home salary after taxes and other deduction is 1.4 lacs/ per months and from other sources i.e., rent from my properties 20000/per month.

I have some substantial savings from my previous life when I use to work hard as NRI. Which is equivalent to ~80X of my present take-home salary, I don't add-up interest from this corpus as my income and let it to add-up with the principal.

I live in my own house and so far I am debt-free i.e., no EMI on my heads. I have a child in kindergarten and my wife chose not to work.

My monthly expense is in tune of Rs 40,000/month, all inclusive. I have seen most of the world, therefore, don't expect big expenses in terms of holiday expenditure.

Kindly suggest me a car, which I can afford without feeling a pinch, preferably with automatic transmission, if I want to upgrade from my i10.

Warm regards

Thank you Generalmax - My i10 is 2010 model, however, looks in mint conditions as my car cleaning-help does good job every week with cleaning and waxing. How do you think about those parallel shift cars (mid range)?
Cheers

You may get around 3 Lacs for your car +/- 20 K according to the condition.I am not suggesting any other car because of the waiting period and many other uncertainties.