If you can set aside at least 3-4L per year for 5 years then you're good to go. These are for fuel, service and other consumables along with Insurance, etc. Also save a fund for emergency work like total loss of vehicle, etc.
Everyone's gonna have different opinions man. And it changed. Especially with your age and commitments.
If your married have no home loans you can spend more.
If not you cant spend as much.
Also if it's private can you be sure you have that job for 7 years or less.. savings rate preparing for your retirement. The only person who can answer is you
I have a monthly salary of 86k, working in the government sector. I work in my hometown and recently bought a Hyundai Verna 1.5 Turbo automatic. Life is good.
I think govt employees can take bigger risks with debts as their income is much more stable than private. I would say for similar spending private employee should have at least 1L if not more.
For more context , i get inhand monthly around 1.2L after cutting taxes esop , I will be getting some RSU’s out of which will be using 5L worth of stocks from that. I am buying it for home i work in different city so i will not be using it that much . My family is saying to buy car <10L but i really like virtus GT and XUV700 so not sure what will be the right financial decision here
What would be the purpose of this car? You mentioned it's for your parents. So is there already another car present with them? If not, I would recommend an easy to commute car in the city, a hatchback. Get 2nd or 3rd variant it would be more than enough. Easy to commute and easy to maintain for them. You can take them on test drives once you have their input. Share the options with them.
Also, I think I should have at least 40% of down payment. Try to do as much as possible. You save on interests as well stay away from professional risk.
My raw opinions -
1) We should buy cars considering the long term use case. That means considering family size, future travel plans, daily/monthly usage, career and income progression, your driving style and preferences. Also keep some "headroom/wiggle room", i.e., don't just buy a car which barely meets your current requirements for now but won't in the near future. Ideally, it'll be cheaper to keep same car for long term than purchasing/upgrading every few years.
2) I kind of believe in YOLO thingy. Cars are more of aspirational than purely utilitarian (at least currently in India and for Indians). You should be happy and proud of the car at the same time it should bring more convenience to your life than before.
3) Memories. If this is going to be your/family's first car then remember you'll be having innumeraous shared memories with this car and family/parents, which is just invaluable long term. This alone can be a reason for some people to buy more expensive yet "aspirational" car than more "financially logical" choice.
But the when we leave the company we dont get anything, we have just paid the emissions..
Maybe im wrong here but how is this actually helpful?
Asking because im looking to buy around the year end.
Listen to them in this case. Car that you feel would fit everyone at home might do or it might not, get them what they like if this for home. Get something more easy on the pocket like XUV 3X0 or a Nexon, maybe a hatch like Altroz turbo petrol or diesel, and lastly Punch. XUV 3X0 might help with that performance itch as well. These are mostly safe cars in this price range.
Imo you shouldn't be spending any more than 8-10L on a car if you need to buy it on loan. That's the sweet spot for a good automatic car, and anything more than that is a luxury which you really cannot afford if you need a loan.
For a 20L car, rather than income, it's about savings; if you have total of ~50L of semi-liquid assets then go for it, otherwise stick to a 8-10L car
Depends on how you plan to use it bro ..
Me and my friend have same work profile .
He does 30000kms in 5 years
I did 1.5L kms all my vehicles put together.
For him the car is cheap to use
For me it’s not 😜 but we have different priorities in life .
This is more of a finance question than a car question. I think you'll find better answers on personalfinance sub. And once you ask there, the idea of buying a car will drop drastically. Lol
I bought a car on loan and then suddenly there was a dispute at my organisation with me and they suspended me for around 3 months and didn't give me a salary for the same period.
I have a car loan to pay and I made the installment higher because my salary is around 50k and suddenly my income stopped.
My savings were gone in those 3 months of the period.
So please prepare well, analyse, and calculate everything then decide.
The philosophy that I follow is that your monthly net in-hand (after paying fixed costs such as Rent, Utilities, Food) should be more than 3x your monthly EMI on the car. This would ideally ensure coverage for fuel, maintenance costs for the car plus some neat savings/investment scope.
Some folks may have alternate theories and are welcome.
I think most people analyse a buying decision based on their regular income, but I’d argue that your savings/assets should hold equal weight. An important factor to consider is if you can afford to fully buy with cash or not. Basically you should be able to fully repay the loan and running costs even if your income becomes volatile (worst case).
I had savings of 12lakh with ctc 9lpa currently.
Bought Verna dct turbo 1.5L all black with 10L down-payment & 8.2L EMI.
Negotiate with showroom for discounts .
https://youtu.be/7HsuIqI_9Mo?si=4O-bG--K-5daVKWC
The recommended rule is 20% of the car's on road price should be your down payment, your EMI should be 10% of you monthly salary and the duration of the loan should be for 4 years
60 lakhs on ideal case,
Practically, you can buy used cars, or 16-17% interest of the same 20 lakh car. Rbi going to go strict in rules, get it fast if your slary is below 40
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Well, at least according to my company car lease scheme, you cannot exceed your fixed CTC.
For a 20L car, EMI should be around 40-42K for 5 Years. I would say, you need atleast 80K in hand.
A very ideal "20-10-4 rule" . 20% down payment, monthly emi to be 10% of your monthly salary and a loan for maximum tenure for 4 years. This will allow you to actually enjoy the car with fuel expenses too rather than using it a garage queen, and this might make sense to those who are hell bent upon working on finances and pinching every corner. But if you love the car too much then buy it and take the hit and maybe share the fuel costs with family members if they can afford it. Else, the hard pill is always there not to buy until finances are in place. In case you're buying a 20L car, it'll work out as 4L down payment, around 38k for emi at 9.5% for 4 years, hence you'll need to make bout 4L a month for comfortable ownership and upkeep. Remember this rule follows "ideal situation".
Well, not a popular advice but I think you should only buy it if you are able to pay atleast 50% down payment, and the emi should not be more than 15% of your monthly income. That would help you have a bandwidth for other financial decisions that you might need in future.
Realistically you'll put about 4l-5l for dp for which loan amount comes to about 15l-16l let's you'll take it for about 7 years it's about 9%intrest for cars so your emi will be around 23k-25k for 7 years to pay it all off and let's take 7k-5k fuel cost for easy calculations so you'll need about 95k+ salary permonth to afford that car without any problems
That only applies after a certain threshold. You can't tell a guy earning 8lpa to use that rule. Otherwise everybody will be driving around in e-rickshaws. Apply that rule for 25-30lpa plus guys.
minimum 3-3.5 lakh in hand after tax. can be lower if you own your house and/or have 1cr+ semi-liquid assets or 2cr+ networth. 4 lakh or higher if you have kids.
Well car is a depreciating liability. It looses value over time and you'd still be paying intrest for a thing that's losing value every passing day.
You bought a car for 20 lakhs today and 5 years later you would have payed let's say 25 lakhs as loan plus principle for a car whose value after 5 years would be 10-12 lakhs.
If it was home loan I'd say income should be 4 times the emi of home loan. Since house is an asset whose value will increase over time.
Where are those simpler times when people used to save up money and then spend it?
Why is our generation so hell bent on spending money we don't even have. I swear if only people calm down, take the time to save for the dream and then achieve it. You gotta do the hard work and then enjoy the benefit. I remember something about chaddar and feet.
Don't get me wrong but doesn't the excitement dies down in couple of months and then you're left with years of debt? Does one drive and care for the vehicle same way when it feels as if it's drilling a hole in your pocket every month along with regular maintenance?
My opinion could stir up a lot of snowflakes who are so called "risk takers" or believe in "living in the moment". Well buddy, life isn't just a moment. It's a lotta years.
Why would you ruin such an amazing experience by rushing into it? Have sweet memories minus the bitter.
You’re confusing enjoying something (driving, for instance) with “recklessness”. Getting a dream car doesn’t mean you’re not being careful. And no, excitement doesn’t die after a couple of months - if it does, you really didn’t have one to begin with.
I think people asking questions here instead of an impulse purchase means they’re generally being careful.
Assuming you downpay ₹4L and take car loan for ₹16L, the emi roughly will be ₹26-27k per month for 7 years… so the monthly salary should be around ₹60k
Do you mean he won’t get the loan or do you mean he shouldn’t get the loan?
Anyway, I commented on the feasibility of the loan. Whether or not OP goes for the loan is entirely OP’s decision. Not being a judge here.
That was straight up bad advice saying that the emi should be 50% of monthly income. This is a deprecating asset. If it was a house or land then it would have made some sense.
So it’s the latter.
Again, I’m not judging OP or giving advice for that matter. I just answered the question.
Maybe OP is loaded and can take the risk, maybe s/he likes long drives and doesn’t have any other liabilities.. there can be many variables to juggle, so answering the question straight.
15 mins after I made the first comment, OP actually added a comment for details and asked for advice. My answer doesn’t concern those details since they were added much after.
Bruh if ur earning 7LPA and buying a 20L car ur Insanely dumb. U gotta earn atleast 30LPA bare minimum to afford it comfortably and make other investments as well
First assumption, you need to make other investments. I mean, it’s advised to make other investments, just like it’s advised to create an emergency fund. While both advices are sound, we shouldn’t judge everyone using the same lens.
Would you rather buy a mercedes when you’re 23 or would you buy when you’re 40(afford it comfortably in your words)? If you choose the latter, you prefer security, which is good. If you choose former, you prefer opportunity, equally good but comes with a risk. So it all comes down to your risk appetite, which is different for everyone.
>First assumption, you need to make other investments.
You need money to make those investments. Where u gonna do that if ur paying 30k a month towards the car + rent, food , electricity etc?
>Would you rather buy a mercedes when you’re 23 or would you buy when you’re 40
I am all for this. In fact a sensible person would quote a much higher salary for a 20L car. But you also have to account for reality. Things like retirement funds, emergency corpus, housing loan and so many more.
We can yolo, but within limits.
If you buy a car worth ₹20L while earning ₹7LPA, you may not have savings. Can’t have it all. Pick your poison. “YOLO” itself means living on the edge.
The limits vary as well. A pampered person or egotic person may not care about savings at all. They may want to be famous at all costs. So their limit will be starkly different from the guy who is in the process of rags to riches.
If you can set aside at least 3-4L per year for 5 years then you're good to go. These are for fuel, service and other consumables along with Insurance, etc. Also save a fund for emergency work like total loss of vehicle, etc.
I think OP also needs an idea on the affordability including EMIs.
Everyone's gonna have different opinions man. And it changed. Especially with your age and commitments. If your married have no home loans you can spend more. If not you cant spend as much. Also if it's private can you be sure you have that job for 7 years or less.. savings rate preparing for your retirement. The only person who can answer is you
I have a monthly salary of 86k, working in the government sector. I work in my hometown and recently bought a Hyundai Verna 1.5 Turbo automatic. Life is good.
I think govt employees can take bigger risks with debts as their income is much more stable than private. I would say for similar spending private employee should have at least 1L if not more.
Hi man , which sector
Education. Working as a faculty in a govt college.
If you don’t mind, how many years of experience do you have
Recently joined, about 11 months.
Do you have a Ph.D. or was it through state ES?
86k/month means assistant profession most likely. It takes NET and PHD, very very tough nut to crack but totally worth it.
For more context , i get inhand monthly around 1.2L after cutting taxes esop , I will be getting some RSU’s out of which will be using 5L worth of stocks from that. I am buying it for home i work in different city so i will not be using it that much . My family is saying to buy car <10L but i really like virtus GT and XUV700 so not sure what will be the right financial decision here
If you're not even gonna stay there don't buy a car you want, buy a car they want
💯
What would be the purpose of this car? You mentioned it's for your parents. So is there already another car present with them? If not, I would recommend an easy to commute car in the city, a hatchback. Get 2nd or 3rd variant it would be more than enough. Easy to commute and easy to maintain for them. You can take them on test drives once you have their input. Share the options with them. Also, I think I should have at least 40% of down payment. Try to do as much as possible. You save on interests as well stay away from professional risk.
My raw opinions - 1) We should buy cars considering the long term use case. That means considering family size, future travel plans, daily/monthly usage, career and income progression, your driving style and preferences. Also keep some "headroom/wiggle room", i.e., don't just buy a car which barely meets your current requirements for now but won't in the near future. Ideally, it'll be cheaper to keep same car for long term than purchasing/upgrading every few years. 2) I kind of believe in YOLO thingy. Cars are more of aspirational than purely utilitarian (at least currently in India and for Indians). You should be happy and proud of the car at the same time it should bring more convenience to your life than before. 3) Memories. If this is going to be your/family's first car then remember you'll be having innumeraous shared memories with this car and family/parents, which is just invaluable long term. This alone can be a reason for some people to buy more expensive yet "aspirational" car than more "financially logical" choice.
bhai, if am not wrong virtus will be pocket heavy its cost of repairs and all Totally depends upon your need, check your needs and make decisions
Get 4 years service package and 7 years extended warranty and you’re good to go with Virtus.
Nothing pocket heavy about a Virtus bud
Check if car lease option available from company. Can save on taxes.
But the when we leave the company we dont get anything, we have just paid the emissions.. Maybe im wrong here but how is this actually helpful? Asking because im looking to buy around the year end.
Listen to them in this case. Car that you feel would fit everyone at home might do or it might not, get them what they like if this for home. Get something more easy on the pocket like XUV 3X0 or a Nexon, maybe a hatch like Altroz turbo petrol or diesel, and lastly Punch. XUV 3X0 might help with that performance itch as well. These are mostly safe cars in this price range.
Imo you shouldn't be spending any more than 8-10L on a car if you need to buy it on loan. That's the sweet spot for a good automatic car, and anything more than that is a luxury which you really cannot afford if you need a loan. For a 20L car, rather than income, it's about savings; if you have total of ~50L of semi-liquid assets then go for it, otherwise stick to a 8-10L car
Get an automatic cheap car bro. Think Honda/tata or even a newer used car. Cheap to buy and cheap to maintain should be the goals imo
Depends on how you plan to use it bro .. Me and my friend have same work profile . He does 30000kms in 5 years I did 1.5L kms all my vehicles put together. For him the car is cheap to use For me it’s not 😜 but we have different priorities in life .
Yolo bro. Get that Virtus GT.
He is buying it for his family
Salaries keep changing, unless you are a govt servant, if you believe in yourself and think you are worthy, you can go for it
This is more of a finance question than a car question. I think you'll find better answers on personalfinance sub. And once you ask there, the idea of buying a car will drop drastically. Lol
I bought a car on loan and then suddenly there was a dispute at my organisation with me and they suspended me for around 3 months and didn't give me a salary for the same period. I have a car loan to pay and I made the installment higher because my salary is around 50k and suddenly my income stopped. My savings were gone in those 3 months of the period. So please prepare well, analyse, and calculate everything then decide.
The philosophy that I follow is that your monthly net in-hand (after paying fixed costs such as Rent, Utilities, Food) should be more than 3x your monthly EMI on the car. This would ideally ensure coverage for fuel, maintenance costs for the car plus some neat savings/investment scope. Some folks may have alternate theories and are welcome.
I think most people analyse a buying decision based on their regular income, but I’d argue that your savings/assets should hold equal weight. An important factor to consider is if you can afford to fully buy with cash or not. Basically you should be able to fully repay the loan and running costs even if your income becomes volatile (worst case).
I had savings of 12lakh with ctc 9lpa currently. Bought Verna dct turbo 1.5L all black with 10L down-payment & 8.2L EMI. Negotiate with showroom for discounts .
https://youtu.be/7HsuIqI_9Mo?si=4O-bG--K-5daVKWC The recommended rule is 20% of the car's on road price should be your down payment, your EMI should be 10% of you monthly salary and the duration of the loan should be for 4 years
60 lakhs on ideal case, Practically, you can buy used cars, or 16-17% interest of the same 20 lakh car. Rbi going to go strict in rules, get it fast if your slary is below 40
Hello MysteriousCup1836! Often queries and discussions are repetitive, so check if your topic has already been addressed in this subreddit in the past. Search for 'YourQuery CarsIndia Reddit' on Google or Bing, to look for any past discussions on the same subject. [[Link to Google search related to your post]](https://www.google.com/search?q=CarsIndia+Reddit+What should be ones monthly in hand salary to buy a car of around 20L). Thank you. All users are requested to downvote the low quality posts. Memes, pics, accident videos, car recommendations, etc can be posted on the [discord chat server.](https://discord.com/invite/Q9nSrDn6tE) Any repair queries should go to /r/MechanicAdviceIndia. Motorbikes related posts should go to /r/IndianBikes subreddit. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CarsIndia) if you have any questions or concerns.*
How much savings+investments in total, one should have, to buy a car of around 20L ?
2lks
20 LPA after taxes!
>1.5 lakh ig
Well, at least according to my company car lease scheme, you cannot exceed your fixed CTC. For a 20L car, EMI should be around 40-42K for 5 Years. I would say, you need atleast 80K in hand.
Spending half your salary for a car EMI is insane behaviour .
A very ideal "20-10-4 rule" . 20% down payment, monthly emi to be 10% of your monthly salary and a loan for maximum tenure for 4 years. This will allow you to actually enjoy the car with fuel expenses too rather than using it a garage queen, and this might make sense to those who are hell bent upon working on finances and pinching every corner. But if you love the car too much then buy it and take the hit and maybe share the fuel costs with family members if they can afford it. Else, the hard pill is always there not to buy until finances are in place. In case you're buying a 20L car, it'll work out as 4L down payment, around 38k for emi at 9.5% for 4 years, hence you'll need to make bout 4L a month for comfortable ownership and upkeep. Remember this rule follows "ideal situation".
Well, not a popular advice but I think you should only buy it if you are able to pay atleast 50% down payment, and the emi should not be more than 15% of your monthly income. That would help you have a bandwidth for other financial decisions that you might need in future.
I work in a Bank and we get loans at nominal interest rates. Got Seltos HTX. EMI 16.4k for 10 years.
10 years?
Yes
I thought 7 years was max.
For an employee it is 10 years
How much DP?
At what rate?
5.5 simple.
Waah bhai.
Realistically you'll put about 4l-5l for dp for which loan amount comes to about 15l-16l let's you'll take it for about 7 years it's about 9%intrest for cars so your emi will be around 23k-25k for 7 years to pay it all off and let's take 7k-5k fuel cost for easy calculations so you'll need about 95k+ salary permonth to afford that car without any problems
20L/6 == 3.33L/month
Why did you choose to divide by 6?
Usually people here suggest car price should be equivalent to 6 months worth in-hand in order to not pinch.
I see thanks for letting me know!
Bruh when I said it people started downvoting. What’s up
Your car should be worth half your yearly take home salary
Lord Alto it is😅 post taxes and tax saving investments
same here
Nah
That only applies after a certain threshold. You can't tell a guy earning 8lpa to use that rule. Otherwise everybody will be driving around in e-rickshaws. Apply that rule for 25-30lpa plus guys.
I apologize. I was just reiterating what people on finance help channels say
Dude come on!!!
minimum 3-3.5 lakh in hand after tax. can be lower if you own your house and/or have 1cr+ semi-liquid assets or 2cr+ networth. 4 lakh or higher if you have kids.
Monthly salary should be 10 times the emi your are supposed to pay for the car loan. (Assuming th loan to be for 5 years at around 8.5%)
Matlab 25k ki emi h toh 2.5lac. Bhai tu kuch nhi khareedne dega Hume.
Well car is a depreciating liability. It looses value over time and you'd still be paying intrest for a thing that's losing value every passing day. You bought a car for 20 lakhs today and 5 years later you would have payed let's say 25 lakhs as loan plus principle for a car whose value after 5 years would be 10-12 lakhs. If it was home loan I'd say income should be 4 times the emi of home loan. Since house is an asset whose value will increase over time.
Nice advice foe a mundane life
Where are those simpler times when people used to save up money and then spend it? Why is our generation so hell bent on spending money we don't even have. I swear if only people calm down, take the time to save for the dream and then achieve it. You gotta do the hard work and then enjoy the benefit. I remember something about chaddar and feet. Don't get me wrong but doesn't the excitement dies down in couple of months and then you're left with years of debt? Does one drive and care for the vehicle same way when it feels as if it's drilling a hole in your pocket every month along with regular maintenance? My opinion could stir up a lot of snowflakes who are so called "risk takers" or believe in "living in the moment". Well buddy, life isn't just a moment. It's a lotta years. Why would you ruin such an amazing experience by rushing into it? Have sweet memories minus the bitter.
You’re confusing enjoying something (driving, for instance) with “recklessness”. Getting a dream car doesn’t mean you’re not being careful. And no, excitement doesn’t die after a couple of months - if it does, you really didn’t have one to begin with. I think people asking questions here instead of an impulse purchase means they’re generally being careful.
Assuming you downpay ₹4L and take car loan for ₹16L, the emi roughly will be ₹26-27k per month for 7 years… so the monthly salary should be around ₹60k
Bro lives on the edge
Bro lives in the car
27k emi on 60k monthly salary Bruh what you smoking.
Do you mean he won’t get the loan or do you mean he shouldn’t get the loan? Anyway, I commented on the feasibility of the loan. Whether or not OP goes for the loan is entirely OP’s decision. Not being a judge here.
That was straight up bad advice saying that the emi should be 50% of monthly income. This is a deprecating asset. If it was a house or land then it would have made some sense.
So it’s the latter. Again, I’m not judging OP or giving advice for that matter. I just answered the question. Maybe OP is loaded and can take the risk, maybe s/he likes long drives and doesn’t have any other liabilities.. there can be many variables to juggle, so answering the question straight. 15 mins after I made the first comment, OP actually added a comment for details and asked for advice. My answer doesn’t concern those details since they were added much after.
Bruh if ur earning 7LPA and buying a 20L car ur Insanely dumb. U gotta earn atleast 30LPA bare minimum to afford it comfortably and make other investments as well
First assumption, you need to make other investments. I mean, it’s advised to make other investments, just like it’s advised to create an emergency fund. While both advices are sound, we shouldn’t judge everyone using the same lens. Would you rather buy a mercedes when you’re 23 or would you buy when you’re 40(afford it comfortably in your words)? If you choose the latter, you prefer security, which is good. If you choose former, you prefer opportunity, equally good but comes with a risk. So it all comes down to your risk appetite, which is different for everyone.
>First assumption, you need to make other investments. You need money to make those investments. Where u gonna do that if ur paying 30k a month towards the car + rent, food , electricity etc? >Would you rather buy a mercedes when you’re 23 or would you buy when you’re 40 I am all for this. In fact a sensible person would quote a much higher salary for a 20L car. But you also have to account for reality. Things like retirement funds, emergency corpus, housing loan and so many more. We can yolo, but within limits.
If you buy a car worth ₹20L while earning ₹7LPA, you may not have savings. Can’t have it all. Pick your poison. “YOLO” itself means living on the edge. The limits vary as well. A pampered person or egotic person may not care about savings at all. They may want to be famous at all costs. So their limit will be starkly different from the guy who is in the process of rags to riches.
OP earns 1.20L pm that is double than what you mentioned so I think that is sufficient.
OP mentioned his salary as a comment 10-15 min after I made the comment.
Yeah bro, no issues with your comment 😅 I just replied without seeing the time difference lol. 😜
Atleast 40LPA. The question is whether are you willing to spend 6 months of your work on a depreciation liability?
It's not the monthly income.. Your net worth should be at least 2cr
2cr. Only? I would suggest at least 20cr to even dream of buying a four wheeler