[Youcanburn]

In my opinion , your car should not cross half your yearly post tax income if you don’t have an other large payments like a home loan.

[xcentrk]

Originally Posted by Youcanburn

In my opinion , your car should not cross half your yearly post tax income if you don’t have an other large payments like a home loan.

If one have a home loan, then what percentage it should be?

[Youcanburn]

Originally Posted by xcentrk

If one have a home loan, then what percentage it should be?

Depends purely on what percentage your home loan is a part of your income. If it is 25-30% then another 20% for the car should be ok. If it’s higher than the car payment should definitely be lower.

Or ideally as per Robert and many others, if one is able to do it : have an asset pay for a liability. But this would usually require aggressive investing in your early 20s or financial backing through inheritance. Financial literacy is lacking at a young age in our country since schools didn’t talk about it in our generation (it’s changing now, my child of 6 is learning about investing, savings, loans, interest etc in school).

Please note that this is my opinion , doesn’t make it right. Opinions are subjective, to each his own and I try to follow these guidelines.

At similar designation/income level most peers are buying 25 to 50l cars. If we pool in my wife’s income most people with similar household income levels are buying cars worth 80 to 120L.

I spend 4 to 5 hours a day commuting to work so a decent fuel efficient car is important.
I currently drive a 5 year old ertiga cng whereas peers are driving a jeep / hycross/ fortuner even x1s and the likes. I’m currently in the market for a sparingly used upto 3 years old Honda city CVT in which I will install a CNG. Obviously my better half doesn’t fully agree and is not happy but has left the decision to me as it’s my car.

Follow opinions based on your own risk appetite, your own need for social validation and as well as what is important to you.

We spend a LOT of money on our child’s education (school plus extras over 10 years would easily total a 2BHK cost in a decent neighbourhood in Mumbai) because we believe that will give her the best opportunity for long term success, so we stick to keeping other costs as low as possible.

As I said earlier : to each his own

If you are a DINK couple: life story changes.

Hope my rambling helps you!

[BLACNWYTE]

I believe that a 'thumb rule' is jut that. To each his own. Each one has a different thumb so the rule is unique for each one. For me it is as follows and I'm quoting myself from last year,

Originally Posted by BLACNWYTE

If I go by majority on this thread, then I shouldn't be able to afford the car I'm driving now and for that matter anything above that A segment. However, I'm driving a C2 segment car and am able to afford the running and maintenance costs. So I guess the key factor is affordability. If you can afford the EMI and running + maintenance costs you can buy the car. Doesn't matter if it's cost is twice your annual take home salary. And for the first five years at least keep the zero dep comprehensive insurance and also keep the max possible IDV. In my case my car IDV is more than the amount which I will need to clear my loan even if I only get 70% of it in case of total loss.

The good news for me is that the monthly EMI + running + maintenance costs have come down to less than 10% of our combined monthly take home. However, the dream of outright purchase of my next car seems very far for now.

[madrasilemon]

I believe, what car @ what salary, what two wheeler @ what salary and such other questions does not have a standard answer. To an extent, It depends on individual preferences, passion and tastes. In my case, the monthly home loan EMI is around 15 percent of my house hold income and SIP and other investments form around 25 percent. I am free from car loan EMIs. We have two diesel vehicles. The old one with 170k in odo is used for my daily commutes. The newer one with 40k on odo is used by my wife for her office trips. The newer one does chennai to Kerala trip atleast 5 times in an year, and does other long distance duties. Both being Boleros and my fascination for UVs never end, I day dream about booking a Thar Roxx or Force Gurkha, or Maruti Eeco to replace my older Bolero. Itch remains an itch when each time I decide that the older Bolero is going to stay with me till has to be mandatorily scrapped. My current day dream is about getting a Force traveller FM3050 and making it a caravan from Josh, Thodupuzha. The itch will subside soon.

At the end of the day, spending 25k once in a while for an alternator replacement or suspension works or self motor replacement makes more sense than buying a new vehicle. I would suggest anyone to stretch their budget to the max as economically viable while buying a new car and hold on to that vehicle till it is economically viable.