What Car Should Be Bought at What Income?
- Thread Starter TSIVipul
- Start date
It's just 8 months old. No, their are no issues and I am not planning to sell this car. Primary reason for me to buy the second car would be for my wife's office commute. Ecosport would be driven by me and the second car by my wife.
It's going to be 35Km per side/day for five days a weak. Which would bring it to 350*4 = 1400 Km, and thats the least I am talking about. Even my running is around the same.
It's going to be 35Km per side/day for five days a weak. Which would bring it to 350*4 = 1400 Km, and thats the least I am talking about. Even my running is around the same.
Purely from a cost and space point of view, do have a look at the Tiago. Celerio also has reasonable space.
I like the new Figo, but it might be slightly expensive (more than 6?). So would be the plain jane Etios Liva
Chevy Beat is funky but absolutely no space. You may pull some mighty discount as well
I like the new Figo, but it might be slightly expensive (more than 6?). So would be the plain jane Etios Liva
Chevy Beat is funky but absolutely no space. You may pull some mighty discount as well
With an expected family income of 22 LPA (adding my and my fiancee's current annual ctc), 2 members and an existing car (Ford Ecosport - TDCi), I am again in a confusion of what budget should I set for the second car (to be used by my fiancee, post wedding, than wife). I already have 86,000 Rs left to pay for my ecosport as i have already pre-paid the rest 4.2 Lakh Rs loan. Although, technically speaking I can buy another car in 10-12 Lakh range, but I dont guess it would be wise. Right now, we don't have a flat of our home, also our savings are going to be blasted for buying household stuff, financing honeymoon and financing our wedding (atleast the clothes). This is going to leave me in a personal loan of 2-3 Lakhs in December. Another expense that would be added to my kitty will be house rent, as right now I am in my office's service appartment which just costs a deduction of 7k from salary.
Post deduction, loan payment and heavy spending on a punjabi wedding I guess our in hand cash would be just over a lakh at that time. We also plan to set aside / save 25k-20k for a future property procurement. I am confused now, what budget should I set for the second car, As it has to be a CNG/Diesel vehicle with good front seat space, and I dont have nay option in the 5-6 Lakh categroy (which i think the budget should be).
: me decide the budget guys, I dont want my heart to rule over my brain again, as right now I am all wooed by the Elite i20 Diesel.
Post deduction, loan payment and heavy spending on a punjabi wedding I guess our in hand cash would be just over a lakh at that time. We also plan to set aside / save 25k-20k for a future property procurement. I am confused now, what budget should I set for the second car, As it has to be a CNG/Diesel vehicle with good front seat space, and I dont have nay option in the 5-6 Lakh categroy (which i think the budget should be).
: me decide the budget guys, I dont want my heart to rule over my brain again, as right now I am all wooed by the Elite i20 Diesel.
If you "dont want your heart to rule over your brain again", then you can consider WagonR VXI [O], you will never regret.
It appears there are a lot of folks who aren't sure if there is a formula for this. Has anybody devised a simple percentage of take home in case of salaried folks. I know there are so many other factors.
But it would be good to have ideal Car EMI as a percentage figure say like 10% of take home figure. Or maybe have an ideal range like 7-15% of takehome figure.
BTW this book published around ~ yr 2000 above some people speculate as one of the causes of the US housing bubble and collapse in 2008!
But it would be good to have ideal Car EMI as a percentage figure say like 10% of take home figure. Or maybe have an ideal range like 7-15% of takehome figure.
BTW this book published around ~ yr 2000 above some people speculate as one of the causes of the US housing bubble and collapse in 2008!
I guess there is no straightforward formula to calculate what car at what income as there would be lot of factors that we would need to consider before buying a car. However, I consider below as thumb rules:
# On Road price of the car should not be more than 50% of one's annual take home income
# Car EMI should not be more than 10% of monthly take home. Infact all loans' EMI should not be more than 40% of monthly take home.
# Car loan tenure should not be more than 5 years
Ideally a depreciating asset like a car should never be bought on loan, but that's how life is.
# On Road price of the car should not be more than 50% of one's annual take home income
# Car EMI should not be more than 10% of monthly take home. Infact all loans' EMI should not be more than 40% of monthly take home.
# Car loan tenure should not be more than 5 years
Ideally a depreciating asset like a car should never be bought on loan, but that's how life is.
Id say for absolute piece of mind with any car with respect to maintenance for most folks, buy a Maruti ,Honda, Hyundai, Ford.
German cars are a big No-No imho as a daily car in these price ranges and are best as a Luxury car for functions etc unless you are ok with constant servicing etc
German cars are a big No-No imho as a daily car in these price ranges and are best as a Luxury car for functions etc unless you are ok with constant servicing etc
This is One of the best threads ever in this forum and anywhere else. Since 2011 I changed 4 used cars (sometimes fate, sometimes listening to heart) I learnt a lot about cars but faced ample losses, so much that I could have bought a decent brand new car now - on cash.
Now I am left with a "feeling like god" (Avenger 220) and have no intentions to buy a car for atleast a year.
I have one tricky question to all of you.
Assume a guy reaching 30yrs of age, about to be married, earning 30 - 35k. No rent, no emi as of now. Spends about 10k for family, 5k for bike maintenance (includes fuel road trip etc), 5k miscellaneuous expenses, left with roughly 15k/month as savings.
Is this a idea situation to buy a car?
Car usage will be about 500kms/month - if bought.
Also, what % of our income should we ideally save and what% to invest in LIC etc
Eagerly awaiting ur response
Now I am left with a "feeling like god" (Avenger 220) and have no intentions to buy a car for atleast a year.
I have one tricky question to all of you.
Assume a guy reaching 30yrs of age, about to be married, earning 30 - 35k. No rent, no emi as of now. Spends about 10k for family, 5k for bike maintenance (includes fuel road trip etc), 5k miscellaneuous expenses, left with roughly 15k/month as savings.
Is this a idea situation to buy a car?
Car usage will be about 500kms/month - if bought.
Also, what % of our income should we ideally save and what% to invest in LIC etc
Eagerly awaiting ur response
Since you are about to get married, having a car is a good idea. However, if I were you, I'd gone for a single owner Maruti/Hyundai hatchback costing not more than 1.25-1.4 lac in a good condition.
These cars are easy to maintain, cheap to run and are fuel efficient. I would not suggest you invest in a new car and consequently EMIs at this moment.
PS: Alto's can go anywhere across the country on all kinds of roads with 3 people in absolute comfort.![[embarass]](https://www.theautomotiveindia.com/forums/images/smilies/Embarass.gif "Embarass [embarass]")
These cars are easy to maintain, cheap to run and are fuel efficient. I would not suggest you invest in a new car and consequently EMIs at this moment.
PS: Alto's can go anywhere across the country on all kinds of roads with 3 people in absolute comfort.
Since you are about to get married, having a car is a good idea. However, if I were you, I'd gone for a single owner Maruti/Hyundai hatchback costing not more than 1.25-1.4 lac in a good condition.
These cars are easy to maintain, cheap to run and are fuel efficient. I would not suggest you invest in a new car and consequently EMIs at this moment.
PS: Alto's can go anywhere across the country on all kinds of roads with 3 people in absolute comfort.
These cars are easy to maintain, cheap to run and are fuel efficient. I would not suggest you invest in a new car and consequently EMIs at this moment.
PS: Alto's can go anywhere across the country on all kinds of roads with 3 people in absolute comfort.
Tall boy hatches are very practical like i10, WagonR, Ritz etc
![[:D]](https://www.theautomotiveindia.com/forums/images/smilies/Big%20Smile.gif "Big Smile [:D]")
Although I started looking for used Corolla Altis for sometime, my search started fiercely now.
So just to get more ideas and suggestions, I'm here asking you guys to help me out.
So I have an Xcent S Petrol @ 30k which I plan to sell. Now that I have 2 kids and my parents living with us, things seems tight fit in Xcent.
Initial plan was to get City, but I don't like that build quality which is not good for the price. And I always had a soft corner for Corollas, so I thought why not?
So my plan is to sell Xcent @ 4Lakhs(have a buyer ready already) and get used Corolla @ around 6L! By chance, I got a call from dealer there is an used 2010, 55k run one at 5.5L! Going to check it out today. Is it wise for me to buy one at this point of time?
My Salary is in the range for ~1L after tax, and currently have 2 EMIs+1 LIC + 1 SIP + Stocks which amounts to 40k! Other household and expenses comes around another 40k!
So my plan is to, sell of Xcent, pay the loan balance 2L! Use up rest of the amount as initial to buy the car, take used car loan and pay it off. Only thing is, my current car loan will end by 2019 whereas for corolla, it will end by 2020(with Part-Payment)!
What do you guys think? Does the plan sounds good?
So just to get more ideas and suggestions, I'm here asking you guys to help me out.
So I have an Xcent S Petrol @ 30k which I plan to sell. Now that I have 2 kids and my parents living with us, things seems tight fit in Xcent.
Initial plan was to get City, but I don't like that build quality which is not good for the price. And I always had a soft corner for Corollas, so I thought why not?
So my plan is to sell Xcent @ 4Lakhs(have a buyer ready already) and get used Corolla @ around 6L! By chance, I got a call from dealer there is an used 2010, 55k run one at 5.5L! Going to check it out today. Is it wise for me to buy one at this point of time?
My Salary is in the range for ~1L after tax, and currently have 2 EMIs+1 LIC + 1 SIP + Stocks which amounts to 40k! Other household and expenses comes around another 40k!
So my plan is to, sell of Xcent, pay the loan balance 2L! Use up rest of the amount as initial to buy the car, take used car loan and pay it off. Only thing is, my current car loan will end by 2019 whereas for corolla, it will end by 2020(with Part-Payment)!
What do you guys think? Does the plan sounds good?
Some information is missing in your post.
From a finance point of view
You have a free play of around 20k per month
- Are everybody covered by health insurance? if not, 20k is too less
- Do you have an emergency fund for 6 months? If not 20k is too less
- Are you covered for your kids college education? If not, 20k is too less
- Do you have any medium term plans? Holiday? Then you will need save for it from this free play amount.
I am assuming your investments are purely to cover your post-retirement life
Coming to the cars
I do not know the year of manufacture of your Xcent. Based on my experience of selling cars, year of manufacture has a big role in the resale value despite its running condition. Resale value typically follows a exponential decay curve with the resale value plateauing post 5 years. I am assuming 4L is a good value. So, moving on...
Corrolla should have higher running cost compared to Xcent (extrapolating Innova experience). God forbid if you have to replace Toyota parts. They are EXPENSIVE. This additional cost must be kept in mind. I am assuming that the Corolla that you are looking would be in great condition with very little dough to plough further.
Since you are plugging the entire 4L from the sale to buy Corolla, you would still be paying off the Xcent car loan. (Is that possible? Isn't the car hypothecated? Shouldn't you clear off the loan before transfer of ownership?) So, the additional 2L is additional loan which you need to pay from your free play amount.
All the above ran on top of my mind when I read your post. Now let me give you my subjective opinion
1. Can you afford the car? Yes (90%. Statistically nothing untoward happens to us most of the time)
2. Will it make you happy? Yes
3. Will it serve your objective of carrying wife, parents and kids? No
4. Should you buy the car?
I am relatively young (at least I would like to believe I am young). My biggest regrets in life were things i did not do, experience or enjoy. The time is gone and I will never gain that. Since, you love Corolla ( I love Corolla too and I know I will be buying this car when all the stars align right), I would suggest you to buy the car. But NEVER at the expense of safety of your dependents (mostly financially in this case)
From a finance point of view
You have a free play of around 20k per month
- Are everybody covered by health insurance? if not, 20k is too less
- Do you have an emergency fund for 6 months? If not 20k is too less
- Are you covered for your kids college education? If not, 20k is too less
- Do you have any medium term plans? Holiday? Then you will need save for it from this free play amount.
I am assuming your investments are purely to cover your post-retirement life
Coming to the cars
I do not know the year of manufacture of your Xcent. Based on my experience of selling cars, year of manufacture has a big role in the resale value despite its running condition. Resale value typically follows a exponential decay curve with the resale value plateauing post 5 years. I am assuming 4L is a good value. So, moving on...
Corrolla should have higher running cost compared to Xcent (extrapolating Innova experience). God forbid if you have to replace Toyota parts. They are EXPENSIVE. This additional cost must be kept in mind. I am assuming that the Corolla that you are looking would be in great condition with very little dough to plough further.
Since you are plugging the entire 4L from the sale to buy Corolla, you would still be paying off the Xcent car loan. (Is that possible? Isn't the car hypothecated? Shouldn't you clear off the loan before transfer of ownership?) So, the additional 2L is additional loan which you need to pay from your free play amount.
All the above ran on top of my mind when I read your post. Now let me give you my subjective opinion
1. Can you afford the car? Yes (90%. Statistically nothing untoward happens to us most of the time)
2. Will it make you happy? Yes
3. Will it serve your objective of carrying wife, parents and kids? No
4. Should you buy the car?
I am relatively young (at least I would like to believe I am young). My biggest regrets in life were things i did not do, experience or enjoy. The time is gone and I will never gain that. Since, you love Corolla ( I love Corolla too and I know I will be buying this car when all the stars align right), I would suggest you to buy the car. But NEVER at the expense of safety of your dependents (mostly financially in this case)
This is a very Interesting thread started in Nov 2011 and over the years, many members have shared their experiences, so others can be cautious while buying their dream cars. The moral of the story is don't stretch your legs beyond your mat. By looking at others , don't get tempted but know your limitations and manage your living happily.
I too have my dream car - my lovely White Angel M -800 DX of 1998 model and over the past 19 years I have maintained it well to the best of my ability. I can say as the time passes, the maintenance costs go on increasing ( I mean servicing the car with unexpected replacement of expensive parts and also equally expensive labor charges) . If you don't maintain your car regularly, suddenly you may land up with more expenses on services in one stretch.
When you buy a new car, at least for the first 3 years the maintenance cost is negligible and then one has to spend more and more on services every year. However car has become a necessity for every family and not as a luxury for any middle class family.
My personal experience is from Rs 300 a month about 5-6 yrs ago has now almost over an average Rs 600 a month for maintaining my Maruti car. I am not talking about the running cost of Fuel but about services, Insurance charges and the Initial cost of buying the car averaged over the years. This is my rough calculation. But at the old age one can not travel by 3 wheeler( Auto rickshaw) or 2 wheeler to get back pains and having own car helps a lot of moving in the city easily.
Of course when I was a young man like you all, I had driven a dream car ESTEEM in 1994, purchased by my employer from one of the 200 Esteem cars those rolled out from Maruti, of course it was company car given to me for my use.
I too have my dream car - my lovely White Angel M -800 DX of 1998 model and over the past 19 years I have maintained it well to the best of my ability. I can say as the time passes, the maintenance costs go on increasing ( I mean servicing the car with unexpected replacement of expensive parts and also equally expensive labor charges) . If you don't maintain your car regularly, suddenly you may land up with more expenses on services in one stretch.
When you buy a new car, at least for the first 3 years the maintenance cost is negligible and then one has to spend more and more on services every year. However car has become a necessity for every family and not as a luxury for any middle class family.
My personal experience is from Rs 300 a month about 5-6 yrs ago has now almost over an average Rs 600 a month for maintaining my Maruti car. I am not talking about the running cost of Fuel but about services, Insurance charges and the Initial cost of buying the car averaged over the years. This is my rough calculation. But at the old age one can not travel by 3 wheeler( Auto rickshaw) or 2 wheeler to get back pains and having own car helps a lot of moving in the city easily.
Of course when I was a young man like you all, I had driven a dream car ESTEEM in 1994, purchased by my employer from one of the 200 Esteem cars those rolled out from Maruti, of course it was company car given to me for my use.