[charanreddy]

I am not a personal finance expert however I can somewhat relate to your situation. So let me answer this assuming what I would do if I were in your position. For reference I am 40 years old, work in mid - senior management (hate that word!) role in the Tech space too for an E-commerce company, had humble beginnings, bought a villa when I was 32 years old in outskirts of bangalore etc etc.

1) I agree with what most members suggested. There is no benefit in closing a home loan early for some one in your profile. I would take the longest period I can get and close it early per my planning.

This gives us the flexibility to choose to either pay in a delayed manner or in a fast manner. (for reference my home is on a 20 year loan period and I haven’t paid a whole lot of it off).

2) Given how the macro economic situation is trending, I am seeing some cause for concern in the tech industry. Just saw Delivery Hero do mass lay offs in Europe (knew some cases via friends too). Not saying Microsoft is in a bad phase but we never know. So reduce your monthly commitments to give you more peace of mind.

3) Your savings of 20 Lakhs is just about enough assuming average monthly expenses for a family in a Tier 1 city and your EMI s towards a home loan. You cannot dip into this a whole lot for your car purchase let alone all of it.

4) Change your car if needed. It’s a bad place to be in if you take home ~ 4 lakhs monthly and still can’t drive around in a decent car. But if I were in your shoes, I would try and postpone my big ticket purchase like spending 30 lakhs on a Hycross as your current cash flow and savings situation does not allow for it.

5) so option i) sell of the BRV add 5 lakhs more and buy something better second hand if you need to immediately change the car.

Option ii) If you can wait a bit, refinance your home loan to a longer duration, try to build up about 15 lakhs in saving towards the car purchase and take a small loan if needed to get your Hycross or Safari.

6) Finally reserving my best piece of advice for the last. Research a bit and engage the services of a fee only financial planner. I have done this and I cannot over emphasise the clarity this has brought me (I paid around INR 20 K towards fees per year). I now have a far better insurance coverage, a portfolio that is reasonably balanced and a much better sense of where I am and which direction I am going. With your salary and job profile it totally makes sense to outsource planning and the time investment this needs to an expert. Of course you will still have full control. The planner is there to observe your situation, analyse and recommend.

P.S. Unfortunately I had to relocate out of India and back in a confusing space in a new country.

Cheers and all the best!!

[Navinprakash]

Originally Posted by viper33

My first ride was a 10-year-old A-star which I bought for 2L and sold for 1.85L after driving it for 2 years. Then I bought a pre-owned Sunny automatic.
I bought it for 3L and sold it for 2.85L after driving it for 2 years.

You made correct car buying decisions in your life. you made the money work best for you by losing only 15K for 2 years of usage of the car in previous 2 occasions.

.. My financial mind says that wait for 2 more years, reduce the home loan burden, and get a car, but to be honest, every time I drive my current car, I feel why am I driving this and never enjoyed it as well. Please help me with which choice to make.

I worked in IT field. Its enough said about the uncertainties in our field. It always a good practice to be loan free. it will open up lot more opportunities for you in later part of life.

Don't take a big loan for new car, Don't suffer by driving a car you don't like.

If you could sell the BR-V without much loss, go ahead and sell and do a lateral upgrade and buy a safer, slightly older and unpopular car that took a depreciation hit already. Expand your search to other brands/models/segments that might fit your criteria. Make sure the difference in cost of selling the BR-V and its replacement that is manageable for you without a big loan.

Continue paying down the EMI for home. All the best.

[narayans80]

Originally Posted by viper33

My mother has her legs operated on and can not fold her legs completely, so I needed a car with a lot of leg room and chose Sunny.

I drive a pre-owned Honda BR-V. I bought it with the assumption that Honda is reliable, but my current car gives one or the other trouble now and then, and spent quite a good amount in servicing that.

How comfortable was the BRV in terms of practicality? Answering this question is important, as it would say whether you can live with a 45xx mm (Ertiga, XL6, Carens, Safari) kind or have to jump to 47xx-48xx mm bandwagon (Innova, Carnival).

Am not aware of BRV suspension. But after 2 cars with stiff suspension, I've found them a lot better to live with than soft suspension ones.

Another question is how is your usage profile?

[speed79]

I think you deserve a new car. Buy it outright within your budget without taking any loans. Do not go for pre-owned car now. The pre-owned cars are prohibitively expensive at present and you can never be sure of if the pre-owned car has a problem or not, even after getting it evaluated at A.S.S.

Regarding your home loan, considering not-so-strong financial background of the family, I would suggest you to pre-pay the home loan as and when you have any surplus amount.

I have been a tech-entrepreneur for last 18 years of my 22 career years, and it has been a blessing to be loan free during difficult times. I had closed 2 of my loans with 1 year, and another one within 3 years, as I used to transfer any surplus amount to my loan accounts.

[HighOnSpeed]

Originally Posted by viper33

As I am paying high EMI with less tenure, I do not have any money for investments. As the house loan interest is cheaper, the question is whether should I rush closing the loan or continue to pay the EMI and invest the amount as the probability of fetching higher returns is higher. Please share your thoughts on your experience considering my background.

It would be better to dedicate your surplus to closing the loan(since you have chosen for a lesser tenure) rather than picking up an investment at this point in time. Also, you are stating that you do not have any money left for your investments, so do not think about that for now. I'm guessing the 20L in savings is in a debt instrument, if so, do not touch that and keep that for contingencies.

Now, I am planning to buy a new car and that too a 7 seater. My financial
mind says that wait for 2 more years, reduce the home loan burden, and get a car, but to be honest, every time I drive my current car, I feel why am I driving this and never enjoyed it as well. Please help me with which choice to make.

You and your family are already experiencing a lot of troubles with your existing car, so it is okay to go swap your car out for a better one. I urge you to explore the pre-owned market this time again. Considering that you have chosen to go with a low tenure on your home loan, it would be better not to further strain your financials with another sizable loan. Also, it would not make sense now to lose out on a big portion to depreciation on a new car, in case for some reason you needed to liquidate the car. I will list a few cars below that would suit your needs while retaining its value over time.

Pre-owned cars that you could consider(under 15-20L) listed in order of preference.
1. Toyota Fortuner 3.0
2. Toyota Innova Crysta
3. Mahindra XUV 500
4. Tata Safari 2021-23
5. MG Hector

Hope this helps. All the best!

[viper33]

Originally Posted by speed79

I have been a tech-entrepreneur for last 18 years of my 22 career years, and it has been a blessing to be loan free during difficult times. I had closed 2 of my loans with 1 year, and another one within 3 years, as I used to transfer any surplus amount to my loan accounts.

Originally Posted by Navinprakash

I worked in IT field. Its enough said about the uncertainties in our field. It always a good practice to be loan free. it will open up lot more opportunities for you in later part of life.

Originally Posted by charanreddy

2) Given how the macro economic situation is trending, I am seeing some cause for concern in the tech industry. Just saw Delivery Hero do mass lay offs in Europe (knew some cases via friends too). Not saying Microsoft is in a bad phase but we never know. So reduce your monthly commitments to give you more peace of mind.

The thought behind wanting to close the homeloan is the same, the uncertainties in the field.

Originally Posted by narayans80

How comfortable was the BRV in terms of practicality? Answering this question is important, as it would say whether you can live with a 45xx mm (Ertiga, XL6, Carens, Safari) kind or have to jump to 47xx-48xx mm bandwagon (Innova, Carnival).

Originally Posted by 07CR

But coming to cars, how much trouble is the BRV giving you currently? Is it like frequent mechanical issues, which is costing like 10K per month of fixes? Or is it minor irritants, but you are simply bored of the car that is magnifying it a lot! If it's the former, definitely go for a new car, if it's the later, try first checking what is the resale value you are getting. Honda's generally get great resale, but considering BR-V was a market flop, the chances could be lower. Check this and then take a call accordingly.

BR-V is quite spacious and it works for me and I enjoy driving the 1.5 IVTEC. I confirm that the issues are with my car alone and I can not attribute it to the car, the BR-V is. If it is trouble-free, I wouldn't have imagined talking about another car at this moment. It has been at ASS for 5 times in the last 18 months and have spent approx 1L.

Originally Posted by Turbohead

Please check the tire. If it's very old, please change it. Else check the tire pressure and maybe stick to a level as suggested by other BHPians. Also get the suspension fixed if it's not in good shape. These two changes alone will enhance the feel of the car. But again, it depends on the overall condition of the car - if it was already badly maintained in the first place, you might be better off moving to something else. Please get it checked by an independent and well-reputed FNG anyway.

The tires are new and I maintain Honda suggested PSI always. Suspension is also new.

Thank you all for your wishes and advice. Sharing it with you all helped me think from different perspectives.

I have made two decisions.
1. Changed my mind of closing home loan asap instead, I would like to start SIPs and balance the loan and investments.

2. I also would like to postpone buying a new car for another 2 years. One reason is that I wouldn't like to pass on my pain to the new owner and at the same time devalue too much and start another loan at the same time.

[B5glider]

What a nice read at the start of the days. Good luck and all power to you. My 2 cents. Never give in to the urge of prepaying your loans by increasing your emi. Thumbsup to @sunilch wherein he mentioned that prepayment of home loans is free in india to highlight how easy the product closure is as against other loan products. Have an eye on Ipos of large corporates and put money in them after reading thoroughly. You will definitely stand to benefit. And please do help to share the exact issues you faced in your brv since iam looking out for a used 7 seater and have shortlisted a brv on the back of my honda city experience. Thx a ton.

[100Kmphormore]

Firstly, congratulations and hatsoff on your success. These stories are an eye opener for us young folks in the process of building a career.

As for the sentiment of preclosing loans, a big YES! But with 1 year buffer of savings including EMIs. I bought my bike on savings, and havent regretted my then thought of paying the same as a downpayment for a mid segment 650cc bike as my industry saw mass layoffs just within 9 months of buying it. I fortunately have savings to tide me through this and into my future education period, with the regular social life outings taking a hit.
But seeing what others are stating here it may be the best course of action. I saw on a MotorInc podcast where Kartikeya states getting a top up loan on a home loan

Do consider lateral upgrading - I sold the bike and got another better one for almost the same price and in great condition. You can use the cash and add a little more for perhaps a base Crysta but it will be a handful for the city - perhaps a Marazzo or a less run well maintained Hyundai Kona if for the city. Lateral upgrading at its best like your earlier purchases.

[achintatri]

Originally Posted by viper33

Hello TeamBHP community, Hope all of you are doing great. I am just writing this fairly long post to gather your opinions.

1. Financial advice
2. Whether to buy a new car or continue with the Honda BR-V?
3. Which car to buy?

I was born in a humble family (humble is a small word, but a poor family) my father was a carpenter and worked as a watchman and our monthly income was Rs.2000 per month before I started earning. I have mostly studied in Govt schools and colleges with my parents putting in as much as they can and with the help of my relatives.

Currently, I am 34 years old and I work with Microsoft as Sr.Product Manager. I earn approx 45L post-tax.

We recently bought a house worth 1.5Cr, a 3BHK villa in Hyderabad. This is the first and only property we own right now. The primary reason to choose a villa over an apartment is that an Apartment might lose value over a period of time and selling would be difficult. With a villa, the chances of appreciation are higher and the probability of selling it, incase you know life is unpredictable, is higher.

Apart from the house, Approx. 20L in savings

Here is my conundrum, currently I am on a mission mode to close the home loan and if there are no surprises in life, I would expect it to close in the next 5 to 6 years. As I am paying high EMI with less tenure, I do not have any money for investments. As the house loan interest is cheaper, the question is whether should I rush closing the loan or continue to pay the EMI and invest the amount as the probability of fetching higher returns is higher. Please share your thoughts on your experience considering my background.

Now, let's come to the car, I am an auto enthusiast, and I always help my friends and family in choosing their perfect ride. I enjoy driving and I swear by it. Till now, based on my background, haven’t dared to buy a new car of my choice.

My first ride was a 10-year-old A-star which I bought for 2L and sold for 1.85L after driving it for 2 years. Then I bought a pre-owned Sunny automatic. My mother has her legs operated on and can not fold her legs completely, so I needed a car with a lot of leg room and chose Sunny. I bought it for 3L and sold it for 2.85L after driving it for 2 years.

My sister’s family is like the same family and we miss her always whenever we go anywhere, so I needed a 7 seater. Currently, I drive a pre-owned Honda BR-V. I bought it with the assumption that Honda is reliable, but my current car gives one or the other trouble now and then, and spent quite a good amount in servicing that. In addition to that, the ride was so stiff, my mother complained every day.

Now, I am planning to buy a new car and that too a 7 seater. My financial mind says that wait for 2 more years, reduce the home loan burden, and get a car, but to be honest, every time I drive my current car, I feel why am I driving this and never enjoyed it as well. Please help me with which choice to make.

Cars I am considering: Just I have three prerequisites, it should be safe, it should be fun, and an automatic

Maruti Suzuki Ertiga: 3-star and lethargic engine, so ruling out.

Kia Carens 1.5 Turbo: Super fun with it powerful turbo petrol engine, again a 3 star rated car, when I am spending 20L which is too huge for me, I don’t want to settle for an unsafe car.

Mahidra Scorpio-N Z6 Automatic: Safe and Fun. But unusable 3rd row. If I pick the petrol, I don’t think I can handle the low mileage. If I pick diesel, I am not sure about the reliability/maintenance of the BS6 diesel engine, and anyway, I don’t drive enough to need a diesel.

Mahindra XUV700: The lowest trim with 7 seats is AX5 diesel and it costs approx 26L in Hyderabad, petrol 7 seater is way beyond my budget.

Tata Safari: Waiting for the petrol which is expected to launch in 2024, I love the design and I like the dynamics of the current car, but I want peace and I am not sure whether I get it with Safari with so many niggles reported.

Invicto and Hycross: Invicto's lower variant is 31L on the road Hyderabad and Hycross VX is approx 32L on road, I don’t think I can spend such a big amount.

So I don’t know which one to pick either. Share your thoughts. Thanks in advance.

The salary (in hand) that you have quoted at the age of 34 years is an amazing salary let me tell you.

I would suggest you not to hurry in closing the HOME LOAN rather keep adding any savings at a designated time period (monthly, quarterly or even yearly) in your HL account just to reduce the interest that you would be eventually paying to the bank.

For car, in case you are looking for a decent spaced 7 seater, you can try any used innova crysta (try toyotautrust and you should be able to find some decent automatics ZX variants that have 6 airbags).

In case you are inclined towards new cars and don't mind taking a loan (I am though strictly against taking a loan for a depreciating asset), then there is nothing stopping you in getting the Innova Hycross (remember Innova at any given point of time will keep you investment safe due to higher resale value as compared to other cars).

Now, I do not know what are your fixed and variable expenses, I have my projection sheet ready till 2038 when I plan to retire (and pursue my hobbies along with some part time consulting/freelancing).

When it comes to home, use offsetting and leveraging extensively meaning invest in multiple properties and offset the home loan interest with the net rental value that you obtain on the second (or if you can afford third and so on properties) and use one property to leverage for down payments to buy a bigger/better properties.

Once your financial equation/investment in the property(ies) are set, you will not have to worry too much about your future (social security/pension) and investing in a car (want versus need) will come handy :-)

I keep the percentage distribution of my earnings as per the following formula NEED:WANT:SAVING = 5:3:2.

Let's say you target to close your car loan in 5 years and can pay 50% as down payment today for Innova Hycross, if the total cost of ownership of your car (including the cost of loan) falls within less than 30% of you earnings in that period, you are still good for a car of your dreams (can use the same formula for other cars).

BTW, in my projections, I see that my need projections are anywhere between 20% to 80% from now till 2038 considering my kids are growing now. I have kept my want projections hovering around 15% to 30% and my savings are anywhere between 45% to 20%. These percentages are in progression from now till 2028. More savings at this time will help the increasing costs in the future and so the projections are aligned accordingly.

In between all these, I am sure if you can do your projection well, you will have enough confidence (as well as reason) to go for your dream car right now.

My advise is, set your projection correctly and go for it, all the best :-)

For reference, I live in PUNE where the cost of living is almost at par with that of Hyderabad and I am also paying home loan EMIs. My salary is not as high as yours but just by sheer projections and my current financial investment portfolio and the power of compounding/offsetting/leveraging, I am able to survive :-)

Also, I have a 2022 XL6 Zeta AT that takes my entire family of 5 (including 2 kids) anywhere with ease and I have no issues with the same. Innova Hycross is in my want list as well but I have learnt that being in the private job (that too vulnerable with so many fluctuations), better to focus more on the NEED and SAVINGS part of life and the WANTS will start filling automatically tomorrow if not in the immediate future :-)

BTW, Carens is not a bad car (no offense to the current owners), two of my friends have it and they love everything about the car, the space is amazing, nothing less and nothing more than my XL6.

Please do not wait for both property as well as car, NOW is the best time to buy both. The inflationary trend after COVID has only started last year and it is going to go further north.

Understand that you are a car enthusiast and considering your preferences, the newly launched SAFARI will also give you all the pleasure so do not think too much my friend, I have taken a leap of faith many times in my life and tomorrow I am sure, I will leverage my current XL6 for some another version of Innova or Safari :-). BTW, I am 42.

Drive safe, stay healthy!

Best Regards,
Achint

[NitNac]

Hi Viper33,
Congratulations on the achievements.
Regarding the confusion only thing I can say is money can buy happiness and also money can make money.
If you are a petrol head then buy any 7 seater car as per your comfort level. If not I would suggest below
1. Visit Sundaram Honda service centre at Ranigunj, Secunderabad branch. There are good mechanics over there, as my dad's Honda City 2007 is always serviced over there I can highly recommend this place. When you visit please ask then to drive around necklace road to find the issue and get an estimate on what all is needed before proceeding. If you have already done this, then ignore.
2. Next, I would suggest you to vist VAuto Care which is at Attapur. It's the best multi brand car service I can say as I had given the H City for a major service involving stearing rack replacement and other component replacement due to the age of the car. Go for a test drive with the mechanic get their opinion.
3. If you aren't convinced with the opinions from above two place i would suggest you to check the seat foam as there is a chance that the foam is defective or lost its softness.

If all the above doesn't work and if there is an itch to get a new car I would suggest you ask someone in the workplace, probably HR, if you can get a car on company name! It would be like a company owned car but, I believe you can save a lot here.

[slevin]

Originally Posted by viper33

BR-V is quite spacious and it works for me and I enjoy driving the 1.5 IVTEC. I confirm that the issues are with my car alone and I can not attribute it to the car, the BR-V is. If it is trouble-free, I wouldn't have imagined talking about another car at this moment. It has been at ASS for 5 times in the last 18 months and have spent approx 1L.

I can empathize your situation coming from a family where we continually bought used cars, three to be exact, that served us well but we had to let them go at different points. In our family's 33 year history (since 1991) of owning cars, we bought our first new car in 2018 (Honda City Gen 4 Petrol) with a few years left to mom's retirement. The happiness that a new car purchase gives and the relatively niggle free ownership experience is something we did not experience in our earlier ownerships. Except for the regular maintenance, you need not worry about niggles, replacing parts and running to every service center to make your car better when you buy a new car at least for a few years! You have already experienced buying and owning a used car.

So, I would suggest you to sell the BR-V and look for new cars. My top recommendations similar to other members would be the Kia Carens Turbo Petrol DCT and Toyota Innova Hycross. Do not take the used car route again. Enjoy a new car purchase with your family!

P.S: This is my first post in Team-BHP. I am exactly your age and your question motivated me to become a Team-BHP member after being a religious stalker of the forum since 2007