[GoBlue]

Originally Posted by aniketi

My calculation is simple - Your EMI should be around 10% (or less) of your in hand salary. Anything more, it starts pinching you every month when EMI day comes. My current EMI is around 7% of my in hand salary & I don't feel any burden of it at all. Whenever I drive car, I am stress free.

If you are unmarried person & no other EMI's you have, then you can actually go up to 20% of your in hand salary. For family man, it becomes very difficult if EMI starts going beyond 15-20%.

Which car do you drive?

That would help to set context for your post.

[aniketi]

Originally Posted by GoBlue

Which car do you drive?

That would help to set context for your post.

Currently I have Ertiga Zxi+ which I got 2 years back. When I brought it, EMI was around 10%.

[Amey Kulkarni]

Originally Posted by kiku007

https://www.team-bhp.com/forum/test-...-0-gr-mk5.html (My 2022 Toyota Supra 3.0 GR MK5)

https://www.team-bhp.com/forum/test-...laced-gts.html (My Porsche Cayenne GTS | Ownership Review | GTI replaced with GTS)

I’m grateful that you tagged two of my threads there and I completely agree to your post.

It’s a simple saying which I heard from an Entrepreneur at his 60+ age. He stated “Eat while you can, before you realise it’s too late.”

Its the same with cars. Fulfil your dreams when you can. Don’t repent when you retire and look back at your career realising you never enjoyed the journey.

Cheers
Amey

[Durango Dude]

I was more adventurous when my family was young and my income was lower, I jumped from an M800 Rs 1.5L OTR '90 straight to a Hyundai Accent GLS the top variant at launch which was some Rs 6L OTR then must be '95 I don't remember exactly. Now my income has grown but I have been sobered down by responsibility: so for me enjoy within your limits when possible and and leave the rest to God Almighty.

[samik_jonak]

If you are passionate about cars, Salary doesn't matter much. I would rather say take risks, find honest ways to make more money and dream big.

[SnS_12]

When we are in our 20's and start earning most of us feel and live a life considering it to be a 'Sprint', but, once you enter your 30's is when you realize that life is actually a 'Marathon' and if one wants to keep living and considering their life to be a 'Sprint' then the only way to be successful and not to be a failure financially is to turn yourself into a 'Sprinter' who can also win a 'Marathon' just like the ad of the K series engines from Maruti Suzuki.

Not, all of us can always generate the amount of money required to fulfill our needs especially when one is getting older, so, it helps to build up your bank balance at an early stage in life so that you can meet the needs of yourself and the ones dependent on you till the time you or they breath their last.

[DieselLover]

Interesting thread!
When I upgraded to the Duster from a Swift back in 2014, I was the only earning member in the family(wife was taking a career break for child care), we have just completed construction of our house and started EMIs and my bank balance was almost wiped clean.

The Duster cost me almost 70% of my CTC back then and I took maximum loan possible and balance payment was made by selling off my Swift. I know it was not a sensible move financially but wanted a proper upgrade for the highway runs we were planning.

The duster never let us down and we made several trips across South India including elderly parents and one cannot put a price for these memories and experiences.

Today, we have both done well professionally, no outstanding loans/EMIs and can easily buy a a 40-50L car. Will I do it? - mostly no as priorities have changed and both of us wanted to be out of the corporate rat race.

I would probably go for a lateral upgrade, save wisely and take early retirement

[raghut456]

I own 4.6-year-old Petrol Freestyle, current ODO 35k. Inclined to upgrade the current one, but I am confused as to which segment I should upgrade. Compact/Mid/Large SUVs? My downpayment would be the selling price of Freestyle, monthly EMI is sufficient for the compact segment, overstretched for the mid ones and extremely stretched for the large SUVs. Please suggest.

[Hatari]

Originally Posted by Amey Kulkarni

I’m grateful that you tagged two of my threads there and I completely agree to your post.

Agree. But realising dreams is about experiences as well, not just money. I still remember how much fun it was to take fast turns in my old Fiesta. Driving a BMW on city roads with potholes/bumps can be quite irritating for example.

Try doing a track day at Buddh/ other international race tracks. I have driven a modified 1.6 Polo at Buddh and a Mercedes AMG GTS 4.0L, 510 bhp at Yas Marina circuit. Unbelievable thrill! Thrashing a car around at corner speeds you cannot do on city roads is a different high!

[Amey Kulkarni]

Originally Posted by Hatari

But realising dreams is about experiences as well, not just money.

You still need to spend money for those experiences. Be it adventures, Travel or Automobiles. There are no free lunches in life.

Originally Posted by Hatari

Try doing a track day at Buddh/ other international race tracks.

Well, I have. You can refer to two of my trackdays here. My Ex-959 Panigale at BIC and one of my currently owned Supra MK 5 at Dubai Autodrome.

But again, you still need to spend to create memories and attain enjoyable experiences of a lifetime.

https://www.team-bhp.com/forum/super...come-true.html (Riding Superbikes at the Buddh Circuit | A dream come true)

https://www.team-bhp.com/forum/inter...autodrome.html (Sunday well spent : Dubai Autodrome)

Cheers
Amey

[SoumenD]

Originally Posted by raghut456

I own 4.6-year-old Petrol Freestyle, current ODO 35k. Inclined to upgrade the current one, but I am confused as to which segment I should upgrade. Compact/Mid/Large SUVs? My downpayment would be the selling price of Freestyle, monthly EMI is sufficient for the compact segment, overstretched for the mid ones and extremely stretched for the large SUVs. Please suggest.

If I were you, first question would be do you even need to change a 4.6 year old car that has run only 35k kms? I strongly suggest you to go through this thread :

https://www.team-bhp.com/forum/ownin...rade-swap.html (ARTICLE: YOUR 5 year old car : Keep, Upgrade or Swap?)

For example I have a 4 year old Jazz CVT(20.5k kms run) and don't see any need to upgrade yet. Feature-wise it has all that I would need(Touchscreen with AA/AC, ACC, Electric mirrors, cruise control, paddleshifters, the works). Engine being a Honda is as good as new and even my running is pretty low now(5-6k/annum) with hybrid office model. Returns 11-12kmpl in city and 16-18kmpl on highways & ofcourse being a CVT pottering around in b2b city traffic is easy-peasy.

Yes, while purchasing I had actually started with Freestyle, but dropped as it didn't have an AT. Had anticipated the need of an automatic in near future, so stretched my budget from 8 to 11lakhs. 3L extra spent back then will make sure I don't feel the need to upgrade for another 4-5 years. So even if you pick one up make sure you foresee the future requirement/s & pick something which keeps you satisfied for longer

[The Rationalist]

I really don't think most of us will be able to buy the cars we drive if we stick to 20-4-10% rules. If somebody wants to buy a ₹10 lakh car, if he sticks to the above rule, his monthly income has to be above ₹2 lakh. If that was true India is already a developed country! We can talk of any kind of rule, but at the end of the day most of us don't follow financial rules.

[shankar.balan]

Just looking at the prices of cars these days is frightening. They have doubled and more in the last ten years. And there is no point saying salaries have also risen because they haven’t done so at the same pace.

It is also true that the USD was at Rs 40 in 2010. And now it is at Rs 83. But it is not as if the work force in India is at the same median salary level as the work force in the US.

So someone earning say 25 lacs per annum CTC has to pay around 8 lacs in Tax. And with the remaining 17 lacs salary if he or she were to want a reasonable vehicle like a Brezza for example, they will have to spend at least 12 lacs. This is half the CTC.

But then not everyone wants to cut their coat according to the cloth they have. Aspirations dictate that the said person will want a Kia Seltos which will set him or her back by 18-20 lacs which is more than three quarters the CTC.

Perhaps the thumb rule which existed earlier, does not apply any more.

[ashis89]

Using salary as a benchmark is misleading and creates disparity. One needs to compare disposable income (net of all monthly expenses/liabilities) to determine what would be the ideal budget for a car purchase.

For someone running home loan(s), student loan(s), medical expenses or high rental expense/household expenses, spending even a quarter of their annual salary on a car might be impossible. For someone without any liability or without regular expenses, they can invest even 80% of their income towards their hobby which is a car.

Invest so much that one can spare without worrying and buy a car that one can afford to drive without worrying about service/running costs.

[Axe77]

Originally Posted by Hayek

3) 35 - 50: 3 - 4 months salary
4) Above 50: Higher of 3% of net worth excluding value of your principal residence or 3 months salary

Would assume you buy a car every 4 years - so you retain a car for 8 years with a 2 car family.

Hayek: I was just going back to some older posts from this thread that had clicked with me.

Assuming I wanted to apply this formula to the entire garage cost at any given time instead of a single car purchase (using purchase cost as the reference), i.e. bikes in garage + 2 cars - how would you articulate this formula for both 45 - 50 (I’m 46 today) as well as 50+.

Is it ok to count any car over 8 years as zero cost? (I know it will still consume in terms of maintenance but not too fussed with that).

Would I be reading your math correctly if I were to restate it as - aggregate garage cost, if 50+, should not exceed 6% of net worth / 3 - 5 months post tax salary? Or aggregate garage cost not to exceed 4 - 6 months post tax salary if between 45 - 50 yrs of age?

I am 46 today (50 in 2027) and expect one major bike purchase sometime next calendar (2024) and a major car purchase in either late 2025 / 2026, latter contingent on some other priorities to clear before that. The latter would likely be my primary car for the next decade or so from point of purchase (will limit its loan period to 3 yrs max). I will supplement it with a second cheaper car in a couple of years of that purchase.

I may not apply these strictly if a particular purchase tugs the heart strings but do want to understand how the math would work as per your formula.

Thank you.