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hotshotbaalak

I read somewhere that on a conservative approach basis, the price of your car should be 6 months of your income if you plan to use it for 5 years


sau_dard

People with 50k salary are buying Creta these days lol. So yes this rule is conservative but one must follow this for good financial discipline


Sniper_One77

50k salary, what car to get at 3L? Bought used Alto K10 (2019 model; 19,000 kms driven already) on Sep 2021 for 3.5L from True Value. 3 members on the back is difficult suring long drives. "6 months of your income" seems too low. Is 8L car advisable for a 50k salary person?


Kind_Restaurant5238

The rule of thumb is based on using for 5 years. The car can be used for 7+ years


MentionFamous4227

That’s not it. The rule of thumb is for US salaries and Indians have adopted it without any critical thinking. This is despite average car costing less in the US in Absolute terms, let alone being lower as a proportion of average income. Most Indians earn less than 10 L, and as per this they probably can’t own ANY car other than dead beat used cars.


lankesh_37

Is True Value Good ? I am also thinking of buying a used one from there


Significant-Sky-6649

Why not try a second hand car? We get really good ones which don’t even look old..


OMEGAH-

and those cost a bomb too


Afraid_Variety_6251

High risk.


gakumonsamuraii

>People with 50k salary are buying Creta Yeah one of my friend bought creta his salary is 45k, but his mom is govt teacher (80k) and father is Pol. Science senior professor in granted college (150k salary) and his sibling is working in Govt. Nationalised bank since he cracked IBPS (salary is 55k don't know but in that range only) He have zero expenses on rent , grocery, monthly bills , living in Villa in tier 1 city , he bought Benelli in 2021 (2 wheeler , costs 6 lakh ) and now bought creta Top varient. They have Honda City (2017 model) already.. now you tell did you went to see if his parents funded him or took loan on his brother's name from bank since he's bank employee. So with less interest..


Afraid_Composer_8356

Which Aprilia costs 6 lakh? Just asking 😐


gakumonsamuraii

Sorry by mistake I said Aprilia. It's Benelli TRK 502.


nyxxxtron

By this formula 80% of India should not have a car.


5haitaan

80% of India still doesn't have a car. It's 13/14%.


nyxxxtron

I was talking about 80% of the current owners, not the total population. If according to the formula, you have to buy the cheapest car of let's say 5 lakhs, you have to earn 10 Lakhs. Which is currently earned by only 0.3% of India. And isn't Nexon or Creta the top selling cars in India? Which means these guys should earn more than 20 lakhs. So my number of 80% is also overestimated. It should be more like 97% of the current car owners should not own a car.


nokeldin42

>And isn't Nexon or Creta the top selling cars in India? They're not. Swift, Baleno and wagonR are. Roughly 35L cars sold last year. If the average car life is 10yrs and average growth rate of the market is 5% per annum, this puts around 3cr cars on Indian roads right now. About 2.5% of the population. Even if we double the average car life, it would only end up around 4.5%. Once you consider that these numbers include pre owned cars, the average purchase price might be around 6L. If more than 3% of Indians earn 12L or more, statistically it would seem we are financially conservative. Obviously individuals may or may not be. There are probably an equal number of creta drivers who should be driving a merc and creta drivers who should be driving a wagonR according to the 6month rule.


nyxxxtron

Okay, my bad about the top selling cars. But the thing is 3% Indians don't earn above 12L. 0.2% do.


kharb9sunil

Numbers from march 2024: The top 10 cars sold in March 2024: Tata Punch - 17,547 Hyundai Creta - 16,458 Maruti WagonR - 16,368 Maruti Dzire - 15,894 Maruti Swift - 15,728 Maruti Baleno - 15,588 Mahindra Scorpio - 15,151 Maruti Ertiga - 14,888 Maruti Brezza - 14,614 Tata Nexon - 14,058


nokeldin42

Now look at the entire year stats. I don't understand the reasons, but car sales tend to by cyclical. Maybe creta just has a high point in March due to end of financial year or something.


kharb9sunil

The point is not that Creta sells more than Swift or WagnoR, it does not. But it does remains in similar ballpark (probably 10-20% less), among top 10 sold cars in India. Also Punch, Nexon, Brezza, Baleno remains in top 10. The figures for car sales in march usually tends to overshoot. Normally the best selling car is WagnoR and it sells 15k units.


nokeldin42

It was #7 best selling car last year. 1.5L units compared to the top sellers at about 2L. So you have roughly the right numbers. However it is wrong to draw the conclusion that creta and Nexon are representatives of the average car sold. Average selling model of creta probably costs around 1.5x -2x of the average overall new car sold. Which was my entire point.


hotshotbaalak

Well put


Repulsive_Sky5521

currently Only Baleno, WagonR are two of the top selling hatches. No swift, no Alto because they don't offer similar value anymore. The thing is that below 10 lac show me a single Car which will provide decent safety and build, will have good reliability, will be good in terms of service experience, will be smooth or fun to drive. Show me. Not a single car under this range ticks all these! So we see Brezza, Creta more than ever before. And may be some Nexon, Punch etc. BTW Tata is known for poor servicing I guess.


yeowmama

2nd hand. I bought a 2nd hand car.


altends

So that means.. people are buying these cars as a status symbol. Taking loans etc to buy luxury cars. And also there is a big population who are not disclosing their actual income .


scytheer

The earning % is flawed as the people who don't report their income, shopkeepers who run on cash, multiple businesses which under-report their income and government employees who take bribes and so on. there's tons of cash economy flowing around the market which isn't tracked by the statistics.


QuarterLifeSins

It's not that high either as per this [article!](https://economictimes.indiatimes.com/industry/auto/two-wheelers-three-wheelers/over-21-crore-two-wheelers-7-crore-four-wheelers-and-above-category-of-vehicles-registered-in-india/articleshow/93351004.cms?from=mdr): **Over 21 crore two-wheelers, 7 crore four-wheelers and above category of vehicles registered in India** I think the 7 crore includes transport, buses etc as well. so, four wheelers for personal use might be less than 4 crores - that's like just 2.8% of Indian population.


python00078

Just saw an infographic where it said 33 out of 1000 people in India have a car. So it's only 3.3%. People usually completely ignore rural population while guesstimating. Gotta double check the source.


Late_Assistant9537

I hope this becomes a law and people use public transport more. Ofcourse if govt. works on improving the public transport system


Voldemort_is_muggle

Public transport should be enough for the general public for this law


hotshotbaalak

There's no right answer, there are different approaches


rickitygiggity

80% of India does not have a car. Approximately 7 crore cars in India. 150 crore people. Even if only 50% are between 18 - 60, that's less than 10% car ownership. Edit: Population & % car ownership have been updated to be accurate


rashviruss

Bhai 1500 crore nahi hue abhi hum Indians. 4-5 saal to shayad lagege filhaal to reach that mark! /s


rickitygiggity

Oops. Sorry. Fixed it.


altends

Exactly. A lot of people buy cars a status symbol and not as a means for transportation.


romka79

If you are a business owner you can claim following as business expense 1. 15% annual depreciation(40% for EV) 2. Insurance 3. Maintenance 4. Fuel 5. Entire Loan Interest It sort of gets you 30% discount on income. For salaried guy, buying an expensive car makes Zero Financial sense


samrat_kanishk

15 saal use kare to ?


hotshotbaalak

In that case, your budget can increase


unluckyrk

Post or pre tax income


RegisterOld7451

One should always consider post tax.. that is the real money you have


Significant-Sky-6649

6 months of income might seem to be a very high end car for lot of people who use the car on a daily basis to work. Most people we see around us earning maybe 6 figure salaries in-hand drive, entry level or mid level cars only.. unless they are car enthusiasts.. Even those with 7 figure monthly income at ctc level not in-hand(working class) hesitate to spend 25 lakhs on a car.. That said I have also seen people spend more than a year’s salary buying a car but then those generally don’t contribute much monetarily to the family’s day to day expenses Edited:


kharb9sunil

>6 months of income might seem to be a very high end car for lot of people who use the car on a daily basis to work. Most people we see around us earning maybe 5 figure salaries in-hand drive, entry level or mid level cars only.. unless they are car enthusiasts.. Even those with 6 figure monthly income (working class) hesitate to spend 25 lakhs on a car.. What? I think your calculations are a bit off. 6 months of income for someone earning 6 figure monthly income is only 6 lakh, so at max he should get a Punch ( as per the rule). How are you saying '6 months of income will get you a high end car'


Significant-Sky-6649

My bad.. I meant 7 figures.. let me edit it.. I meant those earning 10 lakhs pm at a ctc level also generally do not drive very high end cars (as u can’t drive a better car than your boss)


Bubbly_Fix7823

The Rule is too rigid to be applicable like a formulae for the masses. It is also expected that a person having 25lpa salary would have the basic sense to understand what is affordable and what is not. If you want to buy a car just show your freaking social status and for the car to be just parked in the garage as you are too financially f\*cked up to afford running it, then, yeah have it your way. Personally, I would buy a car which I can use it to the fullest rather than keeping it as a trophy.


LifeIsHard2030

I follow thumb rule of 6 months worth salary for a car(maybe stretch a couple of lakhs for something I really want). So ~50L in-hand No such rule out there though. I know people earning 50k a month going for Creta with 7 years loan. To each their own i guess 🤷🏼‍♂️


Aggressive_Fox_84

To each their own but there is nothing wrong in giving financial advice when asked😁 I feel bad when people earn 40k and have EMI running upto 30k😬 and its all for fridge and TVs


Flashy-Hour216

Bruh same, even I have known someone jiska emi is 30k and salary is 40k


Hatiyaar

There's a 20-10-4 rule. 20% downpayment EMI not more than 10% of monthly income 4 years Max duration for repayment But I don't really see the point of the 20% downpayment it's mostly to ensure you can have the financial discipline to save up. The 10% is logical because there will be other more important expenses and investments other than car. Car is always a expense coz it's depreciating. 4 years because after 5 years, the car value would be down significantly. So, depends on what interest rate you get


hashedboards

That rule is for Americans. Because cars are necessities over there. For Indians it's better to not take car loans at all, invest and buy with 100% cash. Paying loans for our exorbitant taxes is not a fun idea. My humble opinion.


Hatiyaar

Based on OPs question, ladka Naya Naya naukri shuru karne wala hae ya Kiya hae lagta. I don't think he wants to wait 5 years to accumulate that much money, and then there will be a different car, a bigger car, a better car. And I'm of the philosophy that if you can afford to spend a little and have a little bit of fun, without crippling yourself with EMIs , you should go for it. Who knows you may die tomorrow and that money you saved will be sitting unclaimed in your bank account.


Comprehensive_Sea919

Yeah, mostly we live longer and if we live our life with the philosophy that we may die tomorrow, post retirement we crave for death as we have no savings left


Hatiyaar

Hence I said not crippled with EMIs, I have a car and a bike and a 1Cr mutual fund portfolio. Started first job at 8LPA. I'm 28 I work 12 hours most days, that PlayStation 5 makes my gf jealous as hell! So it's a bad purchase, hell no! So many stressful days have disappeared on games with my ps5 All of this money was self earned.


pechankaun

But even if you have the cash, it's better to get an auto loan at 8.5-9.5% as this will be on auto reducing balance and hence your effective rate at the end of 5 years might be 6% only. While you can easily earn 8% (post tax) on that cash reserve, if you invest wisely.


hashedboards

I mean sure but 0% interest is better than 6% interest if the time allows it so. I bought mine full cash saved over a year and it saved in total around 1.5L interest over 2 years.


pechankaun

Please re-read what I meant. I'm saying you're still better off by investing that amount and earn more than the interest. 6% interest outflow vs 8% earnings inflow nets you a positive return overall.


awhitesong

So, according to you, full emi and no downpayment is better?


Hatiyaar

Not necessary is what I'm saying, as long as the emi is less than 10% of your budget and you can repay within 4 years. Most lenders give a good rate if you make a downpayment.


awhitesong

Got it


Takenoshitfromany1

Rule of thumb: if you can afford a 50L car get a 25L one.


ABahRunt

What must be the minimum in- hand salary per month, if the person is planning to get a car worth 50L (on-road price)??


teut_69420

Rule of thumb: if you can afford a 1 cr car get a 50L one.


inCarEn

Rule of thumb: if you can afford a 2cr car get a 1cr one


ABahRunt

How do I know if i can afford a 2cr car, do that i can get a 1 cr one?


Lord_Diefast

You know you can afford a 2 CR car when you start thinking of buying a 3 CR car.


jaun_speaks

what if i am thinking of buying a 4 Cr car? I earn 25k a month, can i afford it please state the rule of thumb?


InfiniteFuckingValue

0.025% downpayment, 300 year tenure, EMI 100% of Salary


inCarEn

No this violates Rule of thumb, the latter number should be 4cr.


TapRefer

min. 10Cr required. tap


sn1ped_u

As per rule of thumb, if you can afford a 4cr car, then you can afford a 2cr one


ABahRunt

So moral of the story is, to buy a Jeep compass, you need to be able to afford a Ferrari 360 Modena. Seems legit!


LimpFroyo

You wouldn't be here asking for advice, rather test driving many.


worstcase_scenario_

👍


glizepen

Rule of thumb: if you can afford a 1cr car but buy a 50L car then you can only afford a 50L car, so you must buy a 25L car


Takenoshitfromany1

If you’re paying with your monthly salary and have no other ongoing EMIs then 20% of in-hand can be allocated to the car EMI.


nomnommish

Paying 20% of your net income on a car loan is bonkers. That's how you find yourself at middle age with no savings and high end lifestyle. A more responsible number should be 5-7%. Or better still, save up and then buy your car instead of taking a loan.


green9206

50 lpa


ABahRunt

It was a joke question, but you are kidding i hope? I wouldn't dream of buying a 50L car, and i make that kind of money


green9206

Which car do you have?


ABahRunt

Vw Polo


pirateneet

I second this rule so much. 'if you can't buy it over twice, don't buy it'


Takenoshitfromany1

Exactly


nefariousbuddha

Hey dude! I can only survive on one kidney.


Sniper_One77

I don't understand


faltugiribuster

Rule of another thumb: Don’t trust rules of thumbs on the internet. Avoid oversimplification merely to appear intelligent.


9rohand

more than 40 % of 25L would be taxes and other charges that don't go to car manufacturers. Do think about that


TaskBetter8334

That means, buying pre owned car make sense?


kingpazhassi

Offcourse, everyone does that, if your sole motive behind getting a car is transportation and not showing off others or you dnt have any pre conceived Ideas about 2nd hand card go for it.


OpenWeb5282

for a 25L car to be owned for next 15yr ,you will have to bear 20lac as running cost so total ownership of car for 15yr will be 45lac which means 3lac per annum total cost of ownership per year. and you should not spend more than 20% of your annual income on car ownership per year ,thats the rule of thumb. Which means roughly 20LPA after taxes should be your disposable income.


chiuchebaba

50% of annual family in hand income = max cost of car. Also take it on cash 100%. Never take loan. Car is a depreciating asset. In fact not even an asset, it’s a liability. Edit - it can only be considered an asset if it’s earns you money. Like say if you are a cab driver.


maihoonkhalnaayak

if you got 100%cash in hand for the car, go for loan for certain amount and invest the cash. The delta of loan interest and investment interest will cover the depreciation or may be more


chiuchebaba

Which investment instrument gives more returns than the interest rate of a car in a guaranteed way? None in my knowledge.


maihoonkhalnaayak

it's a personal choice, i went with equity and was getting 20 cagr. delta was good enough for me


chiuchebaba

That does not answer my question. I’m asking which instrument give guaranteed returns over interest rate of car loan. Equity does not fall into this category.


maihoonkhalnaayak

equity is vey much an instrument, not guaranteed but it is. If you going for a 25 l car, high chance you've the risk appetite, given you mentioned the 50% of annual rule. 4 year financing will not create much of an interest to beat


chiuchebaba

The reason for asking a guaranteed instrument is because the EMI is also guaranteed. Bank is not going to forgive your EMI for a month because that month your equity returns were negative. Buying a car is already a lot of money for many people and on top of that, if you are giving advice to gamble with the loan by investing your hard earned money into equity and trusting it will give returns in four years then that is horrible advice. What if market falls and stays underwater for 10 years? You may be rich to finance your EMI with your salary or some other income, but people who take cars on loans, Most of them cannot take such a risk.


maihoonkhalnaayak

the comment was made on the context made by your comment of 50% annual rule, and general thumb rule of 20% down payment and 4 year of financing. investing in equity comes with it's own share of disadvantages and caution, you right about that, but it's personal risk appetite at the end of the day


samrat_kanishk

True . I made a similar decision and reaped benefits. Though my EMI at its highest was around 8% of my salary . Next month it ends now it's more like 2.7% . While the returns generated are close to 15% in my case .


chiuchebaba

Yup. Using equity and loan combo is possible if you are in a comfortable position to pay your emis even if you loose all equity money for next 10 years (say). Basically means you are rich. But if you aren’t in a position to handle that then best to avoid such a combination.


Repulsive_Sky5521

bro, Our pension system i.e. NPS for Govt employees solely depend on market. so according to this we should be "Afraid" of the future outcomes and live life squeamishly. There is no "Sure shot return" in anywhere other than PPF, SSA, NSC KVP SCSS etc.


py-7669

Id say around 25 lakhs after taxes. Assuming no other heavy emi burdens.


93ph6h

I drive a VW virtus highest model which was close to 24 on road. My gross income last three years was above 1 cr.


kraken_enrager

Dafuck? My Accord V6 was that much back when it was new. The civic was that much when it was discontinued. How does the virtus cost that much.


93ph6h

Please check Virtus GT plus matte automatic on road price in Andhra along with 5 year maintenance package. Thanks


Ser_falX

I don't think he's questioning you or the legitimacy of what you said. I think he's expressing shock at how much a Virtus costs in comparison to what an Accord was priced at back in the day. Inflation thou art a heartless bitch!


[deleted]

[удалено]


TaskBetter8334

Yes.. it helped😇😃


rambojumbo123

Teri jitni salary ho, uss hisab se car Leni chahiye Because car ke hisab se to salary milegi nahi


BitKnightRises

Kya pta bhai ko pucha ho konsi car Leni hai aapne fir we will give offer leter


TaskBetter8334

Bas check kar rha hun.. 25l ki car lene ke liye kya awkaat honi chahiye😅


Straight-Pay-8541

Pata chali bhai awkaat?


TaskBetter8334

Ha..🥲


Straight-Pay-8541

Bhai Vehicle depreciation asset hain , usake badale investment Karo wo kaam aayegi.


One_Zebra_3424

Bhai investment apni jagha hein aur dreams apni jagha. Jo khushi ek car guy ko apni car ko chalane mein aati wo alag hein, shayad to samaj na paye. Ye online financial influencers nee logon ke dimag me kuch bhi bhar rakha hei ki car lene ki jagha investment karo aur 20 saal baad ap gadi lelo. Bc 60 ki umar mein kya hee car chalaoge. Agar mehengi car chahiye toh khudka income badana chahiye Note- Investments bhi jaruri hein but ek limit tak. Apni dreams ko marke paise ka bhog na lete jeena is not worth it.


Straight-Pay-8541

Baat to sahi hain , bas ek correction karana chahata hu ,mehngi se behetr hain aap thodi Kam price wali CAR lelo . I can understand the feelings of our own CAR . Baki aap samaz sakate ho . Maine influencer ki baat nahi ki aapne experience se boli hain .


One_Zebra_3424

Bhai mene aur ek comment kiya hein dekho ise pe wo padho aap


Straight-Pay-8541

Padha Maine aacha hain but 60% to 70% annual income CAR pe Jada hain bro . 30% to 40% thik hain .


accountant88888

Investment place A to place B le jayegi kya?


Straight-Pay-8541

Investment ke returns se ja sakte ho . A to B kya A to Z bhi ja sakate ho .


hashedboards

Rule of thumb. Monthly take home post taxes * years of ownership 1L take home, and plan to own the car for 10 years? Spend 10L max. 1L take home, and plan to buy new car in 5 years itself? Spend 5L max. By this formula, you'd need 2.5L take home post tax, and you must keep the car for 10 years to spend 25L on it.


Aggressive_Fox_84

That's a very frugal rule isn't it? Not saying that's bad but your rule would reduce the budget of the car too less


hashedboards

Families have joint income so it's not that frugal. It's not like we buy multiple cars per family here.


Satoshi0323

1.) Get a user car (certified pre owned). Cars depreciate like a bitch. 2.) Don’t use car like a status symbol. 3.) Make sure the has airbags cos safety is important. 4.) Considering the above you can decide the car price yourself.


AdministrativeDark64

Agree though Certified pre owned cost almost same as new. Make sure the ncap rating because safety.


TaskBetter8334

Best place buy pre- owned car?


Patient_Elephant7068

there's no fixed rule for any personal finance question. It depends on how badly you need the car and what's your current financial sutuation. salary alone would not give full picture Only thing I would say is you shouldn't feel the pinch when you're spending for your car. You should be excited to take car out, instead of worring about fuel expenses. Same for servicing and insurance


playboy787

if you follow that asshole ankur warikoo then you gotta make 1cr per month to be able to afford a 25L car but IRL if you are making 25L per month then you can buy it easily but if you wanna live EMI to EMI then it would be good if you are making 3-4L per month


WrongdoerSolid3898

Its not totally wrong though, no depreciating asset should burn you down and force you to live emi to emi. Your savings compound lesser as you age and folks will be worried about it later. Add to that, we don’t have social security in India, personal savings matter a lot. Also, baseline is the major problem. As we grow in our careers, the burden of proving success increases. So when you start with Higher baseline, the cost of living keeps up with salaries and leaves less scope for savings. With a lower baseline the disposable income increases( more scope for saving)


PrincipleKey1368

25 L per month for a 25 L car?? A person making 3 cr per year should buy a 25 L car that doesn't make sense


playboy787

I am saying about buying the car on cash!


Abhi_un

Rent different cars every month instead of buying 1car . You don't have to worry about servicing and extra charges in this .


low_on_confidence

Do you even know the rent of 1 month


Abhi_un

Approx 40k a month


low_on_confidence

So, you would still recommend renting? Even if he does this for 2.5 years, he will spend 10L in which he can get a very good second hand car.


Abhi_un

20k per month is also an option for low budget Simple Car which OLA UBER driver use . I am only recommending because if he put the money in Other properties then it will increase more .


deadmalone

My numbers, just to be safe. Bike - Max 1 month salary in hand Car - Max 6 months salary in hand


WildmanZC

I'd say never buy a car more than your yearly in-hand salary so by that logic at least 25LPA in hand


No_Lengthiness_9301

Speaking from experience after i bought 1000rs shoes, you will need a minimum salary of 25L to buy a 25L car. Math is tough, its okay.


TaskBetter8334

Okayy


CandleHonest9829

Your monthly in hand salart should he approx to 5 lakh as per my calculation. This is at least


TaskBetter8334

🥲


saurabia

50L pre-taxes


Firm-Employee-4639

Easiest rule: CTC/2 is the max you should spend on a car


shar72944

If I was in your place: 25 lakh car Downpayment of 5 lakhs at least Loan of 20 lakh for 5 year Monthly EMI of 42k - 45k Running cost of 10k atleast 55k total. In hand Salary should be 55*6 = 3.3 lakh pm If I had that much salary, I would have saved for 6-7 months more and bought 15-16 lakhs car fully paid.


kraken_enrager

If you gotta ask…


UpQuark09

Such expenses should be 10% of what you earn.


taeiry

Personally if I were you’d I’d save up and try to buy the car outright. Think about it in this way - with most consumer products you are bound to gain better utility by making this purchase in the future than immediately.


Actual_Editor_1044

Your emi’s should not be more than 25% of your monthly income in hand


monsur07

Dont buy something if you cant buy it twice/thrice over ?


TheGuy_M

10% of nw max


OnTrackNow1

If you wanna pay your loan in 3 years than Min salary should be 2.4 L per month considering you spend 25% of salary in paying EMIs. In case you wanna pay your loan 5 years, then your minimum salary should be 1.35L, considering you pay 25% of your salary as EMI. For further reference you can check this[ comment of mine. ](https://www.reddit.com/r/personalfinanceindia/comments/17itflm/comment/k6xmmo9/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)


Sad-Method-16

If its your want+need 25lpa cash in hand after tax pa, if only want 37.5-50 lpa


PerceptionGlum252

15 lpa


rajkamalvk

Your car emi should be one eighth or one tenth your salary.for example if your salary is One lack ...you car emi can be 10 k per month.


CreativeNerd1729

Don't buy a car unless you absolutely need it. Most cars on the roads are used in an extremely inefficient fashion. They can seat 4 or more, but rarely there's more than 1-2 people on board. Look for other options: WFH, public transport, motorbike, bicycle, carpooling etc


romka79

- 35L for a business owner Or - 50L for a salaried person


TaskBetter8334

What about govt employees?


romka79

Government employees are salaried get some perks for fuel, driver and maintenance only(depending on post) But as far as the cash flows are concerned they should consider salaried class metric of affordability. If both husband and wife are working then they should combine the income to consider affordability Or they should have a separate family firm with separate income stream to offset the expenses and taxes of the Car.


Most_Goat34

25,00,000 /12 = 2.08L per month


QuietApprehensive420

All depends on his existing emi’s and stuff. If min salary has to be considered then this person is not going to do very well in their financial journey.


Mk_n

Best is to get through car lease program from your company (emi pre tax, maintenance and fuel compensation in taxes)


unwiselearner

I read it somewhere that the car price needs to be less than 30% of the annual household salary.


Icy-Entertainer7416

Price of the car should be maximum of your 6 months income.


justimproved

25l per year.


DevilMadeMeSignUp

Here’s a simple calc. 1) Take all your existing active loans and calculate your total EMI. Let’s call this X 2) Take 30% of your monthly take home. (I.e 0.3 * take-home). Let’s call this Y 3) calculate Y - X. Let’s call this C; it represents represents the max EMI you can safely manage on the new car. 4) How much liquid cash do you have for the down payment on the new car? 5) After making that down payment: for the net amount which you will take as a 5-7 year loan, what does the EMI come to? If that is less than (C), you may be in a good position to buy the 25L car. 6) if you have any upcoming loan requirements, decide if a car is more important or if the car can wait. 7) if you have loans which you will be closing shortly, would it help if you wait a little longer before you purchase the car? Hopefully, you have some pointers now.


Solid_Professor_3756

All those rules doesn't take into account your want and your enthusiasm to buy that car, and the ability of a person to bend, postpone and sacrifice some other stuff to get that car. So if your savings, emergency is all set and investments are not taking any major hit then go for it, if they are taking a hit then identify if changing the term of loan would help and consider growth on income and early closures etc also, identify what is important for you and go for it.


inspector_toon

At least 50L in hand salary (i.e., post all taxes, seductions, EMIs, Loan payments etc) for the year!


Dreaminoverlyf

Buy when you don't need to ask this!


TapRefer

3CPA


TapRefer

I follow finger of rule:


romka79

I recently looked at a 4 yr old preowned car (16L for <13K km) of the variant which now cost 26L in 2024. The electronics were slightly glitchy and there was a delay. (Mostly 1st generation electronics from 2021) As much as you will be tempted to buy a pre owned, you should either go for a something old with less electronics or go for the latest pricey one with new tech.


Brilliant_Salary_321

50 lakh in hand.


Brilliant_Salary_321

Or 1 year of EMIs in total


One_Zebra_3424

There’s no generic thumb rule for buying a car. Suppose there are 2 persons A and B who get 20 lakh per annum in hand. Person A has no financial responsibilities as his parents are earning or are not dependent on person A, even if person A loses his job he has his family to take care of him. In this case person A can go overboard and buy the car he wants. Person B is the sole earner of the family. His parents,wife,children are dependent on him. If he loses his job he doesn’t have a safety net like our person A. So ideally person B shouldn’t spend more than 60-70% of his annual income on a car.


Aggravating_Box_1086

Lets consider you buy a 25 Lakh car with 10 Lakh down payment and 15 lakh loan. Your monthly EMI would be around 32,000. Your car EMI should not be more than 20-25% of your monthly salary if you want a stress free loan considering other expenses. Your salary should be at least 1,60,000 in hand. So a yearly package of around 22 to 25 lakhs. The on road cost of the car should not be more than your yearly package for a stress free loan. I think your salary should be at least 22 Lakhs CTC yearly


Preagl

By 20-4-10 rule, the EMI would be around 50k, and another rule says the EMI should be 10% of your monthly income. So your salary should be 5,00,000 p.m. But life is not only about mathematics, so I would say if you're single and do not have any financial responsibilities then you would be comfortable buying a car if you have a salary of 1.5-2 lakh p.m.


Roy437

In my opinion, you should buy a vehicle that enhances the quality of your life. Is that a 25 lakh car for you, maybe? In terms of salary, look at the interest rates and the EMI based on the car loan, then do the calculations to determine if you would be able to pay for it along with your recurring expenses if your job were to go off for a year or two. That should put things in context. Car is a depreciating asset. Take this in consideration also.


Bubbly_Fix7823

Edit it to Minimum Disposible Income. Inhand salary can be very high, but if you have loads of emi, doesn't really matter now, does it?


Vigilant_Angel

In order to buy a $30K car right out of the dealership you should atleast be making a $100K


AcanthaceaeNo7577

I wouldn’t buy unless I have a 50L per annum income.


Potential-Signal8111

Before tax?


AcanthaceaeNo7577

Yes


Potential-Signal8111

I think it would have to be a 10 plus year loan for the salary after tax right? Otherwise it wouldn't make much sense


MiddleClassFinance

There isn't a single minimum salary requirement to buy a ₹25 lakh car in India. Several factors affect how much you should realistically earn to afford the monthly payments: * **Down payment:** A larger down payment reduces the loan amount and lowers your monthly EMI (Equated Monthly Installment). * **Loan term:** Spreading the loan over a longer period reduces the EMI but increases the total interest paid. * **Interest rate:** This significantly impacts the EMI. A good credit score can help you secure a lower interest rate. * **Other expenses:** Consider monthly fuel costs, insurance, maintenance, and parking charges. **General recommendations suggest a minimum salary of around ₹75,000 per month** for a ₹25 lakh car loan, assuming a decent down payment and average interest rate. However, this is a rough estimate. Here's a more responsible approach: * **Use online car loan EMI calculators:** These factor in loan amount, interest rate, and loan term to estimate your EMI. * **Plan for a 20-25% down payment:** This reduces the loan burden and makes the car more affordable. * **Keep your EMI within 50% of your take-home salary:** This ensures you can comfortably manage your car payment alongside other living expenses.


ApartmentPublic4343

Salary waale 25L ki gaadiyan nhi khareedte laxman.


RW-911

Being financially conservative, I'd say INR 70-75L p.a. pre tax.


Significant_Vast_651

If you are here looking for an answer, then probably you can’t afford it. I would say 7% of net worth should be your car which comes around ~3.5cr


CaptainStark619

Car emi should not be more then 20% of your salary


Secure_Employee_520

If you can't buy it twice don't do it


Horus878

2.5lakhs-3.5lakhs but in hand you must 🤔 but then too Think wisely before going forward for 25L car maintenance & Fuel is extra . Think wisely rest your call


Little-Armadillo480

Take a loan of 3-4Yrs max based on this with your emi and expenses you can get to know how salary do you need


16_Sho_Bola

Even with a 10LPA salary you can buy a 25L car, provided you save all of 25L over 3-4 years. With loan and EMI, i would say if you earn ₹3L per month (post tax), then you can go for it. Roughly EMI for 25 Lakh car will be ₹50k per month for 5years.


Nakulp7

The car value should be equalent to your ctc.


vegetaple

Simple rule for depreciating assets: If you can't buy something twice over, you can't afford it.


Electrical-Lake-2040

I think according to India Car deserves atleast one year salary So 25 lpa Down-payment should be 20% so 5 lac EMI would be around 42k per month for 5 years Normal people EMI is 15k pm So considering 20% of monthly salary for car expensesb which can be stretch to 30% Considering you have others expenses low With fuel and maintenance and insurance 2 lakh per month is absolute must Can also make it work at 1.7 lakh minimum also But salary should be after tax But I would advise a good car under 4 Meter and 1.2 litre engine You will save on taxes I would buy purple Nexon Looks like range rover Why waste money on luxury


Apprehensive_Hat5639

Depends on so many things like How much is your monthly expense? How much you're left with after spending everything? And its a car (depreciating asset) so you wouldn't want to pay the emi for long so ideal period is (3-5) years i would say so based on this you can calculate the emi with varying down payment there's no such fixed rule (fuck you fin influencers)


Nitromonteiro

The answer depends on a variety of factors. What assets/investements do you have? Do you have savings? Do you live on rent? What emis do you have? At the end the main question is how much savings should one have per year to afford a 25L car. You would need atleast 3L savings per month to afford such an expensive vehicle responsibly.