What Car Should Be Bought at What Income?

[Akash1886]

Then my dad didn't have a merc.
My dad will buy plots & homes. He says cars value will be depreciate but plots & homes?

Manish, choosing a car is one's own choice, I said S-Class because I like that car. I have sat and felt it closely. So my opinion was based on your question and my experience. Secondly, Home/Land and Cars are assets but with different purpose. Machines do have higher depreciation than land because in land you'll not see wear and tear even if its let vacant for years but try leaving a car unused for few months and there you'll have it, a big fat bill of 20-30K or more at hand where as with the development of area, the price of the vacant land goes up and people earn profit.

Regards

Akash

 

[TSIVipul]

What about a business person. Who makes turn-over about 1cr per month. With the income of minimum 5 lakhs. In business we can not say actual income. Many ups & downs in business.
Coming to point which car he can go for???

Sirji in that case the businessman needs to run to his CA and ask him how much he can spend on a car at max.
The CA will have a look at quarterly income, annual income and what not and then will give a number and this number will be the amount which you can spend in cash for a car.
Turn over is nothing much to talk about, revenue generation is what matters in case of purchases.

Turn over when combined with your assets and all BS helps you get the loans for anything and everything, relying on your income..err..taxable income as well as your white collar savings/money at the time of purchases of cars etc is the best way. Go, get the number from your CA and then see what fits your budget or if you want to make a cash purchase or loan. (Personally we always buy cars in cash only, there was a loan on a car in seven figures but it was also paid off in next quarter itself)

What amazes me that we didn't had a single emi expect xuv 500 for 2 years. He taken loan because of income tax exemption.

Sirji but car loans don't give any kind of tax exemption until the car is bought on the name of your company and you have shown that you use it for your business purpose. But that has it's own drawbacks and hence people buy it on their own name and if bought on ones' own name then there is nothing called tax exemption on car loans. In fact I guess you have to put a yellow plate now on the company name registered vehicles because it fells in the category of the 'vehicle being used for commercial purpose'. So if your vehicle is a white plate one then it's registered ont he name of individual and if it's registered on the name of an individual then there is no tax exemption.

I'd suggest you visit your CA or income tax advocate; they will let you know of all the terms of conditions of everything. That will help you learn all these financial fundas and loopholes and how to use them for your personal benefit too.

 

[manish12345]

Re:

Sirji in that case the businessman needs to run to his CA and ask him how much he can spend on a car at max.
The CA will have a look at quarterly income, annual income and what not and then will give a number and this number will be the amount which you can spend in cash for a car.
Turn over is nothing much to talk about, revenue generation is what matters in case of purchases.

Turn over when combined with your assets and all BS helps you get the loans for anything and everything, relying on your income..err..taxable income as well as your white collar savings/money at the time of purchases of cars etc is the best way. Go, get the number from your CA and then see what fits your budget or if you want to make a cash purchase or loan. (Personally we always buy cars in cash only, there was a loan on a car in seven figures but it was also paid off in next quarter itself)


Sirji but car loans don't give any kind of tax exemption until the car is bought on the name of your company and you have shown that you use it for your business purpose. But that has it's own drawbacks and hence people buy it on their own name and if bought on ones' own name then there is nothing called tax exemption on car loans. In fact I guess you have to put a yellow plate now on the company name registered vehicles because it fells in the category of the 'vehicle being used for commercial purpose'. So if your vehicle is a white plate one then it's registered ont he name of individual and if it's registered on the name of an individual then there is no tax exemption.

I'd suggest you visit your CA or income tax advocate; they will let you know of all the terms of conditions of everything. That will help you learn all these financial fundas and loopholes and how to use them for your personal benefit too.

Saarji have visited Ca many times when buying cars!!!! Yep we have taken xuv on our factory name in 2005 only Sa suggested to buy merc!! As many people will buy on their company names but i didn't listened about yellow number plates. Actually I'm trying to say is my dad don't want to spend money on car. He will buy properties as changing car. He'll spend hell money in homes by personalizing them. Coming to turn over profit will be minimum 10% in some seasons high upto 40%.
Saarji I'm still studying. Still have time to involve in our business.will learn on all things. Specifically wanted your classes. Thanks for reply :)

Saarji have visited Ca many times when buying cars!!!! Yep we have taken xuv on our factory name in 2005 only Sa suggested to buy merc!! As many people will buy on their company names but i didn't listened about yellow number plates. Actually I'm trying to say is my dad don't want to spend money on car. He will buy properties as changing car. He'll spend hell money in homes by personalizing them. Coming to turn over profit will be minimum 10% in some seasons high upto 40%.
Saarji I'm still studying. Still have time to involve in our business.will learn on all things. Specifically wanted your classes. Thanks for reply :)

When i ask my dad about costly cars. He says I don't like luxury cars don't know why. But he says I'll get one for you.
He asked me which car you want e class or 5 series or audi's. He know very well about cars. I asked him a z800 finally booked Kawasaki z800 :)
After seeing my homes & factories many people stunned when they saw our cars!! :)

 

[TSIVipul]

Saarji have visited Ca many times when buying cars!!!! Yep we have taken xuv on our factory name in 2005 only Sa suggested to buy merc!! As many people will buy on their company names but i didn't listened about yellow number plates. Actually I'm trying to say is my dad don't want to spend money on car. He will buy properties as changing car. He'll spend hell money in homes by personalizing them. Coming to turn over profit will be minimum 10% in some seasons high upto 40%.
Saarji I'm still studying. Still have time to involve in our business.will learn on all things. Specifically wanted your classes. Thanks for reply :)

Sirji that's the reason why I wrote "maybe yellow plates". I got to listen this one from somewhere but never confirmed. Heck, why to waste my time when I am not going that way?

I need to confirm on this one, will do as soon as I get to meet with someone knowledgeable enough. Ehh, member Jalex can help here, will knock his door some day to see if he is awoken.

Basically buying a car depends on ones personal choice and thinking. Since I am taught from the initial days of learning that depreciable assets are better kept back (and use the car full paisa wasool) so I am also biased towards the same thing. In fact even wrote a thread on it based on finance management itself. But now I can see the things changing. What one reads here is focussed more on saving money for other financial goals now some day will write about right management of money for satisfying short term and long term goals putting all the experiences I have earned by recently losing more money than the price of a new Innova; such a poor and idiotic contractor yours truly is.

Business today is not just about savings and multiplication, there are hundreds of different factors and we all members of TAI must be thankful to God to have put all of us in a situation that we are walking our paths peacefully and strongly. I really need some well versed financial gurus to teach me the money management, I have found myself poor at this one only even when I used to think myself good with this one.

Being a student, go and learn the management and feed your risk appetite with the bank deposits and your revenues only when you know what you are going to do with a view of what will be the outcome if everything goes as per plan with 20-33% deviation and what if plan fails. The coffee of the real world is definitely way harsher than what we think of imagine or even assume, today after an year of gaining, losing ,spending and investing on my own I can understand why my guru used to smile and laugh calmly listening to my plans; it was his experience which used to laugh at my immaturity. You won't understand now, take the keys in your hand and then you will know how the things turn their way and it takes a real man to move ahead of his ego and fight or search for help everywhere to get them right.

 

[bharatbharija]

I don't think that judging which car you should is as simple as X times your annual salary. It's a war between your heart and brain, its a war between how much you have, how much you care to spend on luxury and how much you should ideally spend. You should also take in to consideration the next 5 years of your life while buying a car. Perhaps, last part is the part i messed while making my current purchase.

I have a monthly income in range of 1L-1.5L and had decided to buy a car that was around 70-80% of my yearly income. As such I decided to buy i20 Elite Diesel Asta. However, on the day of booking my heart played its wild card and as such booked and bought Ford Ecosport Titanium with a loan of 5 lakh rupees for 5 years from the earlier planned loan of 3 lakh rupees. The part i messed is, I took into consideration that I don't have any EMI, a minimal rent to pay and I am single and staying in my company accomodation (at minimal deduction, its more of a dormitory), but forgot the very fact that I would be married in a year, would have to rent an appartment, buy all the electronics for the house and many other expenses. Its a good thread, and one should be very cautious of what to buy and when.

However, my heart is still happy and smiling in the ecosport, brain is tussling in between happiness and thought provocation to see if it is/was a good/bad decision.

 

[Markiv]

Guys, cars are an invaluable asset to guys in this forum, but since a car is a depreciating asset, one should not spend too much on it. Everyone has his own priorities in life and it cannot be pinpointed to a particular income for a particular car.

It depends on case to case as to how much one can afford.
1. Down Payment
2, Instalment
3. Repairs/maintenance.
4. Fuel

1. Down Payment:- For example , if a guy makes down payment of Rs.1 Lakh on a car , he should be mentally prepared while selling, that to get back only that one lakh without interest/negligible interest.( after 3 years/4 years/5 years as the loan case may be), Decide whether you are okay with this. And whether its okay to block that amount for that period.(RECOVERABLE with/without partial interest)

2. Instalment: this is the price one has to pay for "pleasure". Just ponder over what all you can do very month , month after month with this instalment money. This money is mostly non recoverable. So ponder well over it with your head (not your heart) and go for it after. (NON RECOVERABLE)

3. Repairs/ maintainance: research on the reviews of the proposed car , its performance and whether its soft on your pocket. This is also a pleasure money month after month. (NON RECOVERABLE)

4. Fuel: This is a pleasure cum necessity money (if you are using it for your work/studies etc) and you are already spending an x amount of money on Auto/taxi an dthe time saved etc. Think well on this and decide. (NON RECOVERABLE/but it benefits you in other ways.)

regards,

 

[dude_0001]

what car would you buy in this budget?

hey guys, sorry if this is in the wrong forum. if yes, please move this thread.
anyways I'm new here. even though I've stalked this site for a long time, now i thought was the time to create my own thread.
Hypothetically, if you were making 4 lakh a month. No rent expense(own the house) only thing needed was clothes and food. what car would you buy? or what kind of EMI would you be able to afford with your current lifestyle. sorry if this is a stupid thread but i would love to hear your responses.

 

[rakeshkn]

I am thinking how I missed this thread. BTW I have a 2007 Alto which was run 65k on Odo, and I am included 40k income category in this list. I was in a dilemma about to change the car or keep it to the next two years. I am a married man and I had to spend half of the income for several requirements. Vipul, What would you suggest? and please consider this, I had maintained my car heavily and why should I allow to somebody to enjoy my experiment and value! also the reason behind dropping the new cars idea was the low resale price of my car also.

 

[manish12345]

I am thinking how I missed this thread. BTW I have a 2007 Alto which was run 65k on Odo, and I am included 40k income category in this list. I was in a dilemma about to change the car or keep it to the next two years. I am a married man and I had to spend half of the income for several requirements. Vipul, What would you suggest? and please consider this, I had maintained my car heavily and why should I allow to somebody to enjoy my experiment and value! also the reason behind dropping the new cars idea was the low resale price of my car also.

Maybe Elite i20 or Jazz suitable?? But if you can wait for 1 or 2 years it's good idea bro you can buy a C or C2 segment cars if you wait for 2 years...
Regards!!

 

[pammiblore]

I am thinking how I missed this thread. BTW I have a 2007 Alto which was run 65k on Odo, and I am included 40k income category in this list. I was in a dilemma about to change the car or keep it to the next two years. I am a married man and I had to spend half of the income for several requirements. Vipul, What would you suggest? and please consider this, I had maintained my car heavily and why should I allow to somebody to enjoy my experiment and value! also the reason behind dropping the new cars idea was the low resale price of my car also.

I had a 2008 Alto and had done 68K on ODO, loved the car. While I was looking out for new car and zeroed onto Tata Bolt , I got 1.55 Lakhs (this was good price i felt) for my beloved Alto + 25K exchange bonus

so I would suggest check which cars suits you and see if the dealers can help with exchange offers.

 

[Vishwas]

I am thinking how I missed this thread. BTW I have a 2007 Alto which was run 65k on Odo, and I am included 40k income category in this list. I was in a dilemma about to change the car or keep it to the next two years. I am a married man and I had to spend half of the income for several requirements. Vipul, What would you suggest? and please consider this, I had maintained my car heavily and why should I allow to somebody to enjoy my experiment and value! also the reason behind dropping the new cars idea was the low resale price of my car also.

Agree that you have maintained it and enjoyed well, but also be aware of the fact that others in the market will be needing a car as per various requirements with which your work would help them in some or the other way. P.S the car has good life ahead, would advise keep it until it makes 1 lakh.

 

[rakeshkn]

Agree that you have maintained it and enjoyed well, but also be aware of the fact that others in the market will be needing a car as per various requirements with which your work would help them in some or the other way. P.S the car has good life ahead, would advise keep it until it makes 1 lakh.

This is what I considered, but the thing is I cant get rid of the desire for a new car. It might take time

 

[manish12345]

This is what I considered, but the thing is I cant get rid of the desire for a new car. It might take time

If your Heart Really want a new car badly? Then you might go ahead with elite or jazz!! We can postpone what brain wants but heart we cannot!!..

 

[ice_wise]

For an income of slightly less than 2 Lac per month (some goes for EMI of car, some goes for rent, some goes for house expenses, some goes in bills and entertainment, almost half is saved), what would you guys suggest as an apt budget for a new car to be kept for minimum 8 years. We are 3 people working in a family of 4. We were hinting at around 8 Lacs but it would be good if someone else can comment on it keeping in mind that full payment of the car would be done and it would take some time to restore the bank balance. I would also provide more precise information if needed, it would be great if someone could make a specific chart/table to calculate how much one shall spend after considering the income, expenses and future expenses.

Rakeshkn - Keep the car for some more years, cover 80-90k kms and then part with it. Seeing the value and dedication you have shown towards maintaining it, all efforts would be in vain as the next owner would enjoy the fruits of your hardwork on the car. The itch for a new car will slowly fade away as you spend time remembering all your good experiences with the Alto. Being married and running the house has a lot of expenses seriously, so think twice before the heart starts to take control of the head.

 

[TSIVipul]

I am thinking how I missed this thread. BTW I have a 2007 Alto which was run 65k on Odo, and I am included 40k income category in this list. I was in a dilemma about to change the car or keep it to the next two years. I am a married man and I had to spend half of the income for several requirements. Vipul, What would you suggest? and please consider this, I had maintained my car heavily and why should I allow to somebody to enjoy my experiment and value! also the reason behind dropping the new cars idea was the low resale price of my car also.

Thanks for your query Rakesh and I am even more surprised to find out that this thread will turn 4 years old in next two days. Believe me, a lot has changed in these 4 years; I have turned from a mere consumer to earner, learned a lot about earning money and managing finances and today I can see that this thread also needs a lot of changes based on the situation of market that has changed a lot since 2011. Now coming back to the topic.

• Car You have: 2007 Alto
• Odo Reading: 65k kms
• Income bracket: 40k

Sirji what is your monthly running? When you renewed the insurance of the car? Do you see any immediate or slightly distant but fat expense in near future in car as well as in house? Something like tires of car, admission of children, fees, some medical expenses or anything like that. Do you pay a monthly house rent or home loan installments too? Make a list of all the expenses and add 20% more to the number obtained to get a 20% buffer in case of sudden rise in expenses. Then make out your savings and then see that after you meet your monthly savings targets, you have enough for a new car or not.

Actually as an enthusiast you can do the car purchasing from your heart but heart doesn't take a minute in going out of the window if the finances get disturbed (any sudden expenses) for any reason and the car also demands its own share of money at the same time. Ponder over all these questions and answer them. After that we can discuss it all in detail. Caution: Don't fell prey to the itching in heart; best purchase is always the one which is the best compromise between the mind and the heart.

My own case: This is the high time I myself need a good amount of money for my contracts completion and I am trying to borrow from home or bank as less as possible; maybe zero. Once the site is handed over and I get my payments, I will save enough for my regular expenses as a student like B-School fee, hostel and other minor expenses with the expenses of a used hatchback or premium motorcycle (2-3 lac). This time I have a used Honda City which runs on CNG (Corolla is sold and Innova is home) and from the money saved in transaction (Corolla sold and City bought) I can easily carry out my complete expenses till I become a student again. Am I tension free? Indeed, I am. Am I happy? Indeed, I am. The heart is more content because all of my requirements are being fulfilled with ease and still nothing to worry at all. What's that? To be very true; a planning done a year back on how to wind up my work at the end but still manage to save enough to get a peaceful entry to student life again.