Indian IT pros don't buy flashy cars

[hawkeye]

I agree with Samurai here and IMO anything in D+ segment can be considered flashy in India. The point to be noted here is these cars are equaly expensive to buy as to own. Generally IT pros are salaried and not self-employed. Normally anyone who has a fixed range of income will obviously spend very thinkfully and conservatively which otherwise wouldn't be the case in self-employed people.

And even today most people buying expensive cars are generally corporate giants and affluent businessmen.

However, I have seen a few IT geeks in flashy cars.

PS: Had read it somewhere that Mr. Azim Premji uses a Corolla.

[shuvc]

Let me throw 2 more theories into the ring .. let me say upfront, that I am not fully convinced about either, but these could be reasons for some ..

1. The assumption is that some people buy flashy cars as a status symbol. Now an IT Pro works in a structured environment, where the strata he/she belongs to in the office is pretty much defined and is more or less recognised across the industry and the society the person normally mingles with. For a senior person (who say has the cash to buy a flashy car), the status is provided by the position and hence materialistic things are not needed that much to boost it.
Whereas a businessman with similar income, would have a greater need of exhibiting expensive material stuff to underline his/her social standing.

2. Businessmen with similar incomes would normally buy the cars in their companies name .. depreciation et al. If so, these purchases have flavour of business decision too. The IT pro does not have any such economic drivers.

My personal far fetched theories

[tsk1979]

A Salaried person as access to limited funds, and lots and lots of responsibilities.
Our psyche and bringing up tells us family and house are more important and a flashy car is a luxury. Luxiries come after necessaties.
Before the IT days, maruti 800 was a luxury, and the necessity to be mobile could be taken care with a bike. So we bought bikes.
Now a midsize is a necessity and a flashy car is a luxury.
Thats the reason I would go for a midsize diesel rather than a 12L performance car.
And I think my priorities are right. If some day we can afford a flashy car and provide all other needs like financial security, house, education to our family we will buy that, till then we wont.

Infact it is a good thing. In America kids get out of college and buy the most expensive car they can with their first job.
Thats the reason when dot com went dot kaun, it hurt them the most.
Indian IT pros have always given importance to family and savings. Thats the reason of we spend 3 months looking for a job before after a lay off, we can stll feed our families. Couple that with the family support system, we can stave of the depression.
But in America when these kids get laid off, the spiral downward because there are not savings and they never created a family support system, because personal desires always took over as opposed to family responsibilities

[1Day]

Originally Posted by tsk1979

A Salaried person as access to limited funds, and lots and lots of responsibilities.
Our psyche and bringing up tells us family and house are more important and a flashy car is a luxury. Luxiries come after necessaties.
Before the IT days, maruti 800 was a luxury, and the necessity to be mobile could be taken care with a bike. So we bought bikes.
Now a midsize is a necessity and a flashy car is a luxury.
Thats the reason I would go for a midsize diesel rather than a 12L performance car.
And I think my priorities are right. If some day we can afford a flashy car and provide all other needs like financial security, house, education to our family we will buy that, till then we wont.

Infact it is a good thing. In America kids get out of college and buy the most expensive car they can with their first job.
Thats the reason when dot com went dot kaun, it hurt them the most.
Indian IT pros have always given importance to family and savings. Thats the reason of we spend 3 months looking for a job before after a lay off, we can stll feed our families. Couple that with the family support system, we can stave of the depression.
But in America when these kids get laid off, the spiral downward because there are not savings and they never created a family support system, because personal desires always took over as opposed to family responsibilities

I dont know man i am not fully convinced if this way of life is totaly right..

Anyhow everyone has a way of living, and hence the guys who is earning 120k+ is still living like a poper, you earn to live and not just to make sure you have a bright future..hardships come and go if you are smart in making your expenenses you can be ok when some sort of a hardship come by...

I see americans have been living full on for such a long time and they seem to be much better off than us, living in more luxury with a larger market, untill you spend the return will never come back to you, its a circle..the more you spend eventually the more you will earn....

but savings are important and i keep it at about 10-15% unlike indians who keep its at 40-50+%

[Mpower]

I can tell you about desi IT pros in the US, they only buy Accords and Camrys.

[tsk1979]

Originally Posted by 1Day

I dont know man i am not fully convinced if this way of life is totaly right..

Anyhow everyone has a way of living, and hence the guys who is earning 120k+ is still living like a poper, you earn to live and not just to make sure you have a bright future..hardships come and go if you are smart in making your expenenses you can be ok when some sort of a hardship come by...

I see americans have been living full on for such a long time and they seem to be much better off than us, living in more luxury with a larger market, untill you spend the return will never come back to you, its a circle..the more you spend eventually the more you will earn....

but savings are important and i keep it at about 10-15% unlike indians who keep its at 40-50+%

yes everyone has his/her opiions.
120K/year?
Well somebody earning that much and spending 50K on a car is okay
But usually on an H1 and not much exp all you get is 60K
If after that you buy a 50K car its not living your dream, its living in your dreamworld
In India getting 800,000/year and you buy a corolla, thats stupidity. Your take home will be 35K and you will be paying 20K on your EMI. Thats like asking for trouble.
If I earn 20lac/year yes I would go for a flashy car, but not before that!

[sajo]

IT pros around me arent willing to experiment with different cars as well. Very rarely do they buy cars which are a little different, like the Fusion or the Petra. Most play it safe while getting their midsize cars, and this might be partly responsible for the NHC boom.

[Ram]

One: What is a flashy car?

Mercedes E-class or a big Volvo sedan?
In most of the places, IT professionals are used to, they are good family cars and taxis.

Pecking order in the USA:
Chevrolets and Pontiacs, Fords and Plymouths. They've always been plain-Jane cars in the USA,
below the level of the slightly upmarket Buicks, Oldsmobiles, Mercurys and Dodges
certainly below the Cadillacs, Lincolns and Chryslers.

Honda Civic and Toyota Corolla, are plain-Jane budget cars bought by IT people at the start of their careers. Typically students who convert from F1 visa to H1B prior to a green card.
Later on, they move to Accord and Camry and a little later to Honda Legend and Lexus.

Does overpricing and overhyping in a third world country, make a car, a flashy car?

Two: A predilection to overspend

My suspicion is that this tendency varies from region to region
I've seen in some of my friends from North-West India, a strong tendency to buy expensive.

I've heard my dear ones from Delhi, use the term -- Show-Shaa,
which has to do with keeping up facades, always living beyond your means (on loans and credit-cards) not surprisingly with some pain.

Cars beyond their means, mobiles beyond their needs, exotic restaurants (esp. in the USA) where I've seen them renting a stretch-limo to showup late for a party, forcing down food, they're not a true connoisseur of, just to keep up the show!
This is the propensity, which also causes them to buy everything that stretches their means.

Three: Office politics

I am an IT professional since 1st Jan 1981. I've been through a time when I had to convince my boss to buy himself a better car so that I wasn't seen to be outdoing him. My boss was a sweet guy who couldn't care less, but his wife could have made my wife miserable. Posturing and feinting do have their place in corporate politics. Ignore them as we may try our best to, these factors do creep in to spoil the day, if not considered.

It's generally OK and manageable to buy a car whose price is half your annual salary package.

[1Day]

Originally Posted by tsk1979

yes everyone has his/her opiions.
120K/year?
Well somebody earning that much and spending 50K on a car is okay
But usually on an H1 and not much exp all you get is 60K
If after that you buy a 50K car its not living your dream, its living in your dreamworld
In India getting 800,000/year and you buy a corolla, thats stupidity. Your take home will be 35K and you will be paying 20K on your EMI. Thats like asking for trouble.
If I earn 20lac/year yes I would go for a flashy car, but not before that!

I wish I was earning 120k I was talking about my friend who earns this much and lives like a popper..

I also have another car so the vette and the G35 together costed me about 90kish and thats living dream for me since i said i am not where near the 120k mark..

But i agree in india it becomes harder considering the cost of cars and salary difference, but even then people will start getting use to spending more because they would be able to finance things and the mind set would become that you dont buy anything outright, not even electronics..

[1Day]

Originally Posted by ram

I've heard my dear ones from Delhi, use the term -- Show-Shaa,
which has to do with keeping up facades, always living beyond your means (on loans and credit-cards) not surprisingly with some pain.

Cars beyond their means, mobiles beyond their needs, exotic restaurants (esp. in the USA) where I've seen them renting a stretch-limo to showup late for a party, forcing down food, they're not a true connoisseur of, just to keep up the show!
This is the propensity, which also causes them to buy everything that stretches their means.

Taking loans is from no angle living beyond the means, in my humble opinion, it is stupidity to take your cash and put it in a depreciating asset like cars or anything else..its good to spend and spend to live, living large is not a crime, we indians have been burnt with the ideals of not spreading out legs beyound the sheets, but i think without pushing ones luck, spending a good amount is healthy for the economy and for yourself, afterall who has seen the future, so it is better to live life in a grander fashion than we indian are use to..

It's generally OK and manageable to buy a car whose price is half your annual salary package.

in the US its probably 1/3 and i think i was sleeping in that class when they mentioned this ratio Oh well till the next harsh crossing in life (touchwood)

[ballkey]

I somehow disagree with this article's premise. My guess is there are a lot more businessmen, self-employed people who earn a lot more than IT people. And they usually drive around in Ambassadors, Sumos, Boleros, and the odd Scorpio. A lot of them dont drive either; they're content with bikes and autos. The disposable income with IT people is slightly overrated, IMO.

I believe that IT people, who've usually done a stint abroad, are more likely to spend on flashy cars, than other people. And being IT people, most have a fetish for high-tech gadgetry; I guess this pretty much drives their car preferences too.

And a Ford fiesta is a modest car? Gosh I wish I could say that. That car *starts* at 6+ lakhs onroad ! There was a time, not too long ago, when people would by houses for that price.

[Samurai]

Originally Posted by ballkey

The disposable income with IT people is slightly overrated, IMO.

Originally Posted by ballkey

And a Ford fiesta is a modest car? Gosh I wish I could say that. That car *starts* at 6+ lakhs onroad ! There was a time, not too long ago, when people would by houses for that price.

Your above two statements are contradictory. In one breath you say IT people income is overrated and yet in the next breath you say Ford fiesta is not a modest car, you even appear to hint it is a flashy car.

Most IT guys with 3-4 years of experience can easily afford the EMI of a midsize car like fiesta. This is because they not yet married, still live in shared flats, etc. Their disposable income is nearly 60-70 percent of their salary. Yet, I hardly see my employees spending. None of my empoyees aged 23-25 who make between 20K to 45K after taxes, own a vehicle, not even a bike.

[ballkey]

Originally Posted by Samurai

Your above two statements are contradictory. In one breath you say IT people income is overrated and yet in the next breath you say Ford fiesta is not a modest car, you even appear to hint it is a flashy car.

I dont know if they're contradictory - my point is that the average IT bloke doesn't earn enough to buy a midsize car like Fiesta with ease. Somebody mentioned that it's usually OK to buy a car that's atmost half your annual salary. Now, I doubt if a lot of IT people make more than 12 lakhs/annum, in their fast five years.

However, even with these constraints, I find that IT people relatively spend more on their cars, if they can afford it.

[Samurai]

Originally Posted by ballkey

my point is that the average IT bloke doesn't earn enough to buy a midsize car like Fiesta with ease. Somebody mentioned that it's usually OK to buy a car that's atmost half your annual salary. Now, I doubt if a lot of IT people make more than 12 lakhs/annum, in their fast five years.

An IT guy who makes 1 lakh gross income per month probably has a take home of 60K after all the taxes, PF and other deductions. A car like fiesta will have a EMI of 15K and this is 25% of the total net income.

Therefore the question is how much of net monthly income are non-IT people ready to spend on EMI? It is around 25% or 50% or even more. I feel it is usually less than 25% for IT people, that's why they settle for smaller cars.

[tsk1979]

Its actually 15% for those who already pay EMI on the house, and goes upto 35% for people who have ancesteral property to bank upon.
Actually in the US somebody who earns 90K goes for a 35000$ car at max
So US guys actually spend less percentage on their cars most of the times! But then they dont really believe in savings.