[F150]

Dear All,

I want to buy a VW Tiguan. On road price is 42L as of today. What should be my monthly take home salary to be eligible for Tiguan, as per this thread ? Lets say I have an existing home loan EMI of INR 50K.

Regards,
F150.

[pravint]

There can be another way of thinking as well, Just buy whatever you like!
Be it on loan, but improve your earnings in parallel.

When I bought my first car Honda City(2015), the price was almost equal to my CTC and I got it on loan.
Even my manager used to drive Swift and I was the guy with most expensive car in our team.

With time my earnings have improved and I don't regret buying a car which costed me almost my 1 year salary.
It gave me lot of driving pleasure, helped me to travel quickly, safely and comfortably during good and bad times.
My car is good companion of mine

As a car guy, for me cars are more of an emotional thing than financial decision.

[DCEite]

Originally Posted by F150

Dear All,

I want to buy a VW Tiguan. On road price is 42L as of today. What should be my monthly take home salary to be eligible for Tiguan, as per this thread ? Lets say I have an existing home loan EMI of INR 50K.

Regards,
F150.

Assuming you are taking loan of 80% of total on road price, your loan amount would be for 5 years 3360000 with EMI of around 69000 @ 9% ROI. So including your HL EMI total outgo will be around 1.2 L per month.

Ideally this should be capped to around 25% of your salary (Total EMI outgo).

Hence you should be earning atleast 480000 per month or around 5760000 Annual post tax income (That roughly, translates to a CTC of around 65-70 Lacs).

[quasimodo]

Apologies for missing out on the excel attachment. Here it is.Car modeling.xlsx

[OffRoadFun]

Originally Posted by DasAuto1985

but now its too late and I can only curse myself. Any tips/ideas on how to mitigate this, other than of course to get a job that pays more

Buyer"s remorse is not uncommon.
Its difficult to comment without knowing actual finances/age etc.

Can it be a case of you not enjoying it as much as you thought you would for the amount you paid for it? In cities like Bangalore, it is tough to enjoy driving except for planned trips over weekends may be.

In that case, hopefully it is just not a very wise investment (though depreciating still). But still OK. Try to enjoy your possession. In longer scheme of things, it may not matter much.

Unless you sell this one and buy a significantly cheaper car as replacement, keeping your current one may not be a bad idea.

All the best

[M-Roc]

Originally Posted by DasAuto1985

Now I own a car for which the EMI is too much and its putting a dent on my finances. Any tips/ideas on how to mitigate this, other than of course to get a job that pays more

Hi,

I was in a similar boat recently so though of sharing my two cents here

Option 1 : If you enjoy the car and assuming it to be not having any niggles or discomfort which you were not able to identify before the purchase then it is better to hold on to that, Most likely over a period of time you will be able to handle the additional financial burden.

Option 2 : If you are having any niggles/discomfort with your car (This was the case with me) then it might bug you very often and you will end up not enjoying the car. In this scenario if selling the car can yield you the required amount to foreclose your loan it is better to do that and have a peace of mind.

Hope this helps.

Thanks

[amitayu]

What car at what salary is a very simplistic querry.
What realy matters is how much EMI you can afford to pay after all possible kind of expenses you have.

A good way to go about it (and I did it the first time) is to set an RD for an year at an estimated EMI you think you can afford. Try it out for one year and see if you can really live with it. After an year, take a call whether you can bump it, or need to reduce it.

An additional bonus is the RD itself, which I used as part of the downpayment, which helps you lower the total loan amount!!

[vigneshkumar31]

Firstly don't worry. Buyer's remorse is ok. And more common than you think. You are not alone.

Secondly, do not follow up a financial mistake with another one by selling off a new car. The moment you rolled that car out of the showroom, you have taken the depreciation hit. Now the only financial prudence in selling it - would be for the lucky guy who would buy your new car as second hand.

Enjoy your car. Keep it well maintained and keep it for long. Make memories with it.
Things will definitely get better. Don't beat yourself up over this.

[the_real_slager]

Hello,

I have a different perspective to share. I am a car nut like most of the others in this forum and always had my Company car as my beater. For the initial years it was a BMW 120i, then an Audi A3 1.5 manual and now a Tesla Model Y LR.

In 2021 me and my then Girlfriend, (now wife) decided that we will buy a second car as a gift to ourselves for our marriage.

We did not want to use our savings, so took an Auto loan at 3.7% and got a used 2016 Mercedes C300 petrol AMG line Coupe in Black with Black wheels at 27,000 euros. Here in Western Europe, the quality and selection of used cars are really amazing and a car with say 80 or 100k on the ODO feel tight and new.
Did many road trips with it across Europe and used the car for one year and 22,000 kilometers and spent around 300 euros for service.

Exactly a year later we sold it for 27,000 euros and then got a 2017 Volvo S90 R design T5 in Black and 20 inch wheels for 27,500 euros. Used it again for a year and almost 23,000 kilometers and sold it for 27000 euros. Also did a service for around 600 euros in that year.

And then got a White Jeep Grand Cherokee Summit from 2016 for 27,000 euros and used it for 25,000 kilometers. And just two weeks back sold it for 28,000 euros. Also had done a service for around 900 euros during that year.

This time since we already have a Model Y, and wanted something smaller, so got a 2018 Polar Silver Magno CLA 250 Shooting Brake AMG line petrol for 27,500 euros and probably we will keep this car for a couple of years.

The remaining amount from the initial loan of 27,000 meanwhile as of today is 12,000 euros.

So, for me, personally, this was a fun decision. I got to drive 4 cars with an initial investment of 27k and my asset in hand is still almost at the same valuation. Agreed, it is still not a financially sensible decision but fun factor that I still enjoy is priceless.

I would say all Auto loans are not bad. Provided it is not used to buy a new car, which i would never do with my own money. Company cars are leased and it is a different story.

PS: Could not resist sharing a picture of my new baby



Regards,
Kiron

[Herschey]

Originally Posted by F150

I want to buy a VW Tiguan. On road price is 42L as of today. What should be my monthly take home salary to be eligible for Tiguan, as per this thread ? Lets say I have an existing home loan EMI of INR 50K.

These calculations should provide an overview of the income required to satisfactorily service EMIs for a VW Taigun along with a Housing Loan EMI of 50k:



While most probable values have been taken for calculating the gross and net income required to service the EMIs, changes in variables like RoI, loan tenure, down payment amount etc. would affect the resultant outcome.

Here, the amount of annual income tax liability would be nearly equal to that of the amount of both housing and car loan combined.

[JediKnight]

When I got my first job, being a car nut, I just wanted to get a car. Financial planning be damned. And that is what I exactly did. I bought a car as soon as I could afford the EMI, such that EMI + living cost was roughly equal to salary. Nothing left for investments or savings what so ever. I must admit I really enjoyed the car and the care-free days of my youth.

Now as I am getting older and wiser (hopefully) I realize that there are actually three currencies in life:

1. Time.
2. Health/Energy.
3. Money.

In youth you have plenty of 1 and 2 but less of 3. Hence you can compensate the lack of 3 by spending 1 and 2 i.e. working very hard.

As you get older 1 and 2 diminish. Hence you should get more conservative with time.

I was listening to Morgan Housel Podcast and he made a pertinent point:

"Unspent money buys something intangible but very valuable which is freedom and independence and autonomy and control over your time."

[DCEite]

Originally Posted by JediKnight

"Unspent money buys something intangible but very valuable which is freedom and independence and autonomy and control over your time."

THIS. Hell yeah !

And there is a corollary. Spent money, which you have not yet earned (example, a car loan), is a double whammy - 1) You are making the banks rich by paying interest on a depreciating asset and 2) You are losing (some of) peace of mind since an EMI is something you are obliged to pay and if you can't (due to job loss) it can bring a lot of misery. So, the added anxiety.

[Way2Jimny]

Originally Posted by JediKnight

"Unspent money buys something intangible but very valuable which is freedom and independence and autonomy and control over your time."

Though this is true, there needs to be a balance. If you don't spend money then you are doing nothing.

For a person who loves cars, it is ok to spend money on cars within their means. I'm sure everyone has some interest or hobby in life. It can be cars, it can be travelling and exploring the world or it can be spending money on expensive restaurants for some.

Don't think too hard to become financially independent. You will get there eventually. Life is all about balance. Don't push too hard and beat yourself up to reach financial independence.

If you get control over your time, then you need to spend time using money

[antz.bin]

Enough of this financial prudence. You CAN get your dream car(/bike) if you want it hard enough.

Here's how to go about it.

https://youtu.be/42L3E37SYNM?si=yhiCq4ILlU4d553y

Even if you get the wrong one, fret not, you can always sell it off and get something else. It's value is not going down to zero (in most cases). At least you would have lived your dream.

Trust me, if you desire it hard enough, and once you are on the right path, the universe conspires to get it done faster. Either you will start making more money, or the prices will drop. Or both!

In my view, if you want to overspend (on a car), make sure it's on an EV. You can do all the breakeven calculation you want with comparable ICE cars but EVs are smoother, faster, cost less to run and ABOVE ALL, are taxed less. If you are spending the money, better to spend it on the car than on taxes or fuel.

[UD17]

Originally Posted by DustyWanderer

A new car depreciate about 30% of its value the moment it is out of the showroom.

One of my friend was on lookout for the Used car with maximum 1 years life and <10K Kms on it.

Forget 30% depreciation on OTR price, we could not get a car with price which is <10% of the OTR price. The used car market is crazy right now and this 30% depreciation hit rule do not apply anymore.

Can you please get me one example of a new preowned car (lets say just came out of showroom), owned by 1 owner and priced at 0.7xOTR price?