Go Back   Team-BHP > BHP India > The Indian Car Scene


View Poll Results: %?
<15% 288 55.81%
16 - 30% 145 28.10%
31 - 50% 36 6.98%
51 - 75% 22 4.26%
ARE YOU KIDDING ME ? ALL OF IT ! 25 4.84%
Voters: 516. You may not vote on this poll

Reply
 
Thread Tools Search this Thread
Old 15th November 2015, 14:39   #166
BHPian
 
Join Date: Jul 2015
Location: Coimbatore
Posts: 695
Thanked: 873 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

Well, I am happy that my car is purchased with savings and is not in EMI. That was one good decision due to which I can spend as less as possible on my car on a monthly basis.
But my home isn't sticking to the sensible logic of 30% mentioned in the above posts, but hope to bring it down as soon as possible.
hybridpetrol is offline   Reply With Quote
Old 15th November 2015, 15:39   #167
BHPian
 
Join Date: Aug 2008
Location: TS 10 / TN 43
Posts: 32
Thanked: 57 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

I am suprised to see comments like " point A to B" and "Car is just metal"

This is a forum where members give names to their cars and spend hours on DIY installs.

I have bought 2 cars cash down and now on my second car on EMI. We have always had at least two cars at home. One small which is payed for with a single cheque and a larger car on EMI.
There are merits to both systems.

My cars take up 25% of my income.
gungax is offline   Reply With Quote
Old 15th November 2015, 16:42   #168
BHPian
 
artrocious's Avatar
 
Join Date: Sep 2015
Location: Chennai
Posts: 54
Thanked: 44 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

Quote:
Originally Posted by ACM View Post
The thing is yes it is definately better to live with dignity but then one also can't leave things too late and be in a situation where when the pocket permits certain indulgences the health doesn't.
THIS!
This was quite the rationale behind my buying decision (just turned 30 guy, wife and two babies) reasoning behind buying a car that is 100% of my annual take home. I bought it with my heart while my head still feels I should have kept it at say 70%. However, I know I will be completely out of auto debt in 3 years.

In 10 years I would be 40 and I really do not know what would be my state of health and state of mind.

Will driving still be fun at 40 or will it give me a sore back/hurting neck?

Will I genuinely enjoy what my money can buy when I am 40 or will I look at it as a "depreciating asset" like somebody quoted?

Will I find the time at 40 for a month long all India road trip and forego say my children's school or lose a month's income when I am neck deep in commitments?

Whether I will still be inclined to take that ZERO-PLANNING-ON-A-WHIM 3000Km trip with wife+kids in my 40s?

Will I be able to drive sunrise to sunset?

Most importantly, why buy a "cheaper" Swift/Brio without top notch safety features/build quality as against buying a robust and SAFE Ecosport with say 6 airbags (Isnt this reason enough to dole out an extra couple of lakhs? accounting for extra 30% of annual salary?) when you are genuinely planning to USE it rather than keep it parked for the occasional mall visit?

I just think my 30s are my LAST chance to have FUN.
This time is ripe with
* sufficient income flow
* physical and mental strength
* Enthusiasm
* a good life partner (yes? Girlfriend, maybe?)
* Beautiful Kids (Too much to ask?)
* a good SLR for memories
* looong and beautiful roads!
Here are my 2 cents about a buying decision: If you need to push your budget a bit, you are justified if the sole reason is for buying something safer (rather than moving to the next category with no safety features for low end variant).

If someone loves the road I think they should get a reasonably good ride a bit beyond their budget, if necessary. But the real deal will be in actually USING it and milking more smiles from the miles.
artrocious is offline   (5) Thanks Reply With Quote
Old 15th November 2015, 18:29   #169
Senior - BHPian
 
adimicra's Avatar
 
Join Date: Jul 2010
Location: Hyderabad
Posts: 1,558
Thanked: 1,058 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

The intention of the question or poll is good but depends on lots of other factors.

Networth, financial security,liability being the key.
I see someone above is buying a car worth his annual salary. I simply can't afford to do that. The reason being - I haven't made any windfall gains in stock markets, foreign trips or real estate. I do not have any significant ancestral property or money. So, I know I have to save enough for my retirement to ensure a comfortable life for my family. Also, I know I need to buy a decent enough house in a good enough locality to ensure a good quality of living and happiness for my family. In such circumstances, will I be able to buy a car worth my annual salary? No. Most people won't!
That doesn't mean that I don't love cars. It's a matter of being a little practical and prioritizing your requirements.
And I don't think that a higher priced car means more happiness or joy of driving. If you love cars and driving, you can have fun with any ride. Just like all rich people are not the happiest bunch, similarly a higher priced car does not mean more happiness. Spend time cleaning your ride, mod it up with some cool accessories. Go for some long drives.May be do some serious modifications like engine remap later to spruce it up. The list and options are endless!
adimicra is offline   (2) Thanks Reply With Quote
Old 15th November 2015, 19:08   #170
BHPian
 
Join Date: Oct 2015
Location: New Delhi
Posts: 89
Thanked: 61 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

Quote:
Originally Posted by gungax View Post
I am suprised to see comments like " point A to B" and "Car is just metal"
This is a forum where members give names to their cars and spend hours on DIY installs.
Which is why I laid special emphasis on the word "LOGICAL".

If we discard our emotions for a moment and think about it on an extremely logical level, a car is literally metal on wheels.

However, humans indeed aren't logical beings. Our heart often dominates the mind and that's completely okay (It's a part of life experience after all).

Speaking of which. Even though I called it metal on wheels, I am going to take the plunge and buy my first German car very soon lol.

Do I need it? Absolutely no.

Can I afford it? Yes!

Should I buy it just because I can afford it? Nope.

However, will I still do it? Probably!

But why?

Well, it's emotions over logic at the moment lol.
rahul_jo is offline   Reply With Quote
Old 15th November 2015, 20:18   #171
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 47,763
Thanked: 89,537 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

Quote:
Originally Posted by The Rationalist View Post
The debate will go on for ever.
Indeed. I'm truly pleased that nearly 2/3rds of BHPians spend less than 15% of their earnings on cars. My personal limit is <10% though.

Quote:
One doesn't need bucket loads of money to have a fun to drive car.
Bingo! There are so many cars under 10 lakhs that can be supremely satisfying to own for an enthusiast.

Used Jetta 6-speed Diesel
Used Civic / Laura TSI
Mahindra Thar new or used
Linea T-Jet new or used
Polo TSI
Used Polo 1.6 TDI
Punto Abarth
Etc. Etc.

Heck, if I had only 4 lakhs to buy a car, I'd get a used Civic for 3 lakhs, spend a lakh modifying it (like I did my own car) and high-revv away to glory.
GTO is offline   (3) Thanks Reply With Quote
Old 15th November 2015, 20:48   #172
BHPian
 
Join Date: Jul 2015
Location: Bangalore
Posts: 152
Thanked: 264 Times
Default

Although off topic but couldnt stop on this comment - "30s are the last chance to have fun"

Seriously??
On this forum which is full of senior folks who have the energy and funny bone to put 16 years old to shame.

I think life just gets better with age, as long you are fit and healthy.
Living fit and healthy is topic for another discussion😃
Acharya is offline   (5) Thanks Reply With Quote
Old 16th November 2015, 09:29   #173
Senior - BHPian
 
dark.knight's Avatar
 
Join Date: Apr 2013
Location: India
Posts: 1,117
Thanked: 2,964 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

Quote:
Originally Posted by d3mon View Post
I think I didn't frame the question correctly. What I meant was how much of a percentage of your annual income should be the price of your car.
Well it really depends on a multitude of factors doesn't it? A trend I've been observing of late is that people ask 'what car should I buy', more than the question 'what car do I need' in the sense that now with so many options available across every price point separated by hardly a lakh of rupees each, the temptation to upgrade a level or even two is higher than ever before. In the end a car is a depreciating investment, with investment being the key term here - one needs it to potter around his/her city safely, being protected from rains & sun & of course to take the family along as well, thus the depreciation factor is a small price to pay for all these benefits.

I'm a firm believer that every segment has to sell & merely by existence they will end up selling, be it a Mini Cooper, a Toyota Fortuner or any such vehicle category where other vehicles of similar dimension are available at half the price even then the more expensive vehicles will sell owing to brand value, better technology & such. In summary if we look at it mathematically your question is unanswerable because all the factors, say salary (x) and vehicle preference/requirements (y) are variables which can even change annually based on requirements & job progression. We have also not factored in another arithmetic equation, based on your question the cost of the vehicle should be divided by the number of years of ownership (which would bring in other benefits like lower insurance, depreciation etc) thus effectively reducing the annual cost if the car is held for a number of years.

The best guideline in my view would be to go for the vehicle which fully suits ones requirements yet doesn't exceed those requirements & to keep it as long as possible. That's the only way India can buy its cars. Of course if grossly exceeding budget or requirements isn't a problem then our discussions are redundant.

Last edited by dark.knight : 16th November 2015 at 09:34.
dark.knight is offline   Reply With Quote
Old 16th November 2015, 09:39   #174
BHPian
 
drsingh's Avatar
 
Join Date: Mar 2011
Location: Ludhiana
Posts: 682
Thanked: 466 Times
Default

Quote:
Originally Posted by Acharya View Post
Although off topic but couldnt stop on this comment - "30s are the last chance to have fun"

Seriously??
On this forum which is full of senior folks who have the energy and funny bone to put 16 years old to shame.

I think life just gets better with age, as long you are fit and healthy.
Living fit and healthy is topic for another discussion?de03
Well. Putting this point forward as this forum is dominated by male members,otherwise I may get myself into a 'girls vs boys' argument (ah..... The college days). Life definitely gets more fun for men as they age. They get more 'resources', status, maturity, wisdom, salt and pepper looks, bigger cars..

Last edited by drsingh : 16th November 2015 at 09:41.
drsingh is offline   (3) Thanks Reply With Quote
Old 16th November 2015, 12:49   #175
BHPian
 
d3mon's Avatar
 
Join Date: Nov 2008
Location: Bangalore
Posts: 470
Thanked: 584 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

I'm looking back upon this thread that I started six years ago!

My journey so far - I had got my dad's swift diesel instead of having to buy a new car about an year or two after I started working. Otherwise I'd have plonked 2-3 lakh into buying a used car (like an Ikon or a Baleno). It kept me quite happy for the 3+ years and 30000 km that I put on it. Also, the only expenses were for the fuel and some accessories, which were easily <15%

I just purchased a Figo Aspire Titanium Plus TDCi and I'm happy to fall in the <15% bracket again (only fuel expenditure to speak of - so more like <5%)
I could have actually spent a lot more money on buying a 'bigger' car, but the Aspire was the first car under 10L that could satisfy all my needs (Power, Safety, FTD) and I didn't see any point in spending more just because 'I could'.
d3mon is offline   (1) Thanks Reply With Quote
Old 16th November 2015, 13:32   #176
BHPian
 
Arjun Reddy's Avatar
 
Join Date: Jun 2013
Location: Bangalore
Posts: 909
Thanked: 1,031 Times
Default Vitamin M - What percent of your annual income do you spend on your car?

My take on this is that the car EMI should not exceed 10% of take home income. Another 4-5% will automatically be spent on Fuel and maintenance.

If you are not salaried but draw a remuneration like Directors remuneration then you will be eligible for depreciation. In that case you could go upto 20%. Just my 2 cents.
Lower the cost, lower the headache. I rather enjoy my current ride than loose peace over emi and maintenance bills.

Last edited by Arjun Reddy : 16th November 2015 at 13:34.
Arjun Reddy is offline   Reply With Quote
Old 16th November 2015, 13:40   #177
Senior - BHPian
 
puchoo's Avatar
 
Join Date: Sep 2011
Location: Delhi / Shimla
Posts: 1,433
Thanked: 750 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

I am spending about 5% of my total annual income on the EMI of the car. Add petrol and servicing to it (rounded off) and it goes upto about 8%. This is ofcourse thanks to a job change as well about 6 months ago , but i have never spent above 15% if i recall.

The next car is hopefully a beamer which will change change status quo quite dramatically.
puchoo is offline   Reply With Quote
Old 16th November 2015, 14:45   #178
BHPian
 
Hells Bells's Avatar
 
Join Date: Mar 2006
Location: Bangalore
Posts: 187
Thanked: 167 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

For me, buying a car is an emotional affair as a car tugs at you in so many ways. If we were all rationalist, then we will never go beyond the first two layers of Maslow's hierarchy. You may have survived but have you lived?

I am perfectly ok spending up to 25% of take home on car EMI as long as:
  • I have not cut down on my monthly SIPs
  • I have not compromised by weekends and dine outs

I followed the same principle when it came to buying a house and the end state is that I am not leverage to hilt courtesy a HL EMI and can't afford a nice car. Real estate is over rated and I have seen people justifying an expensive purchase and yet have an issue buying a car with lower EMI (and lesser duration!) - all in the name of "appreciating" asset.

You do 50% of take home on car plus house and you will realize that you are not losing sleep!

Which is why I have rationalized to myself that while I am capable of buying one of the German trios, can I afford it? Nope. Hence, at best will be a D segment car for me when I change ... or maybe that Volvo V40 ... hehehe.
Hells Bells is offline   Reply With Quote
Old 16th November 2015, 23:51   #179
BHPian
 
motorworks's Avatar
 
Join Date: Sep 2009
Location: Bangalore
Posts: 681
Thanked: 405 Times
Infractions: 0/1 (5)
Default

A very relevant topic in the current economic environment, where the new normal is supposedly inclusive of volatility. This logic just doesn't apply to just cars. Take mobiles for example, I see many people today with a phone that's twice their monthly salary!

Anyway coming back to the topic, it depends on an individual's circumstance and financial planning.

Personally, my first car seemed like a big mistake. I had bought a car that costed me about half of mine and my wife's yearly salary. But we did some planning much earlier and had managed a 40% downpayment 2 years in advance. So the EMI did not seem more than 10% of our monthly income. Anyway we closed the loan quickly and moved on to our next car which was about 50% of our income, but the EMI was again low since we managed a 70% downpayment. We have closed that loan as well and have done a similar exercise for our second car too. All this while we kept our other priorities in mind and did not let sheer emotions or ego take over at any point; I feel that buying a car very early in my life , which may have been something that was beyond me at that point , set the tone for my financial planning. Now I'm about hit the mid 30's and It feels just right. I should have bought a i10 as my first car, but I planned better and bought a Dzire as the first one. And then the upgrade to the rapid was much easier thanks to the money from selling the first car. I may think twice if I need to buy a rapid now!
motorworks is offline   Reply With Quote
Old 17th November 2015, 10:17   #180
ACM
Distinguished - BHPian
 
ACM's Avatar
 
Join Date: Mar 2008
Location: Mumbai
Posts: 4,156
Thanked: 2,462 Times
Default Re: Vitamin M - What percent of your annual income do you spend on your car?

Have a long term average of 15% of Income going towards vehicle purchases. It was at some stage as high as 25% but over the years has dropped below 10%.

So that meant that I spent a higher % between age 23-35 yrs and the lesser from 35 yrs. Though as Income gors up even with rising car prices you buy incrementally better vehicles.

This ensures one has fun in 20s and early 30s and sobers down in 40s.

That said it is hard to move a step down after experiencing something better so going the preowned route is highly recommended.

After kids priorities change.

Home and safety term Investments though should remain the long term highest investments segments. Cars are fun and yet a depreciating expense.

Trick is to get something you love and forget hangups like getting only new vehicles. I have don't both and recommended only preowned unless it is a vehicle you WILL keep for 7-10 ys.
ACM is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Cars with "Zero Percent" Interest Rates AbdulRahmanM Indian Car Loans & Insurance 7 25th October 2017 22:24
Hero MotoCorp buys 49.2 percent stake in US based Erik Buell Racing captain.torque Motorbikes 1 2nd July 2013 10:42
How many hours everyday do you spend in your office? naveendhyani Shifting gears 36 26th June 2012 18:01
Ashok Leyland acquires 26 percent equity in UK bus maker fx45 Commercial Vehicles 4 19th September 2010 21:53


All times are GMT +5.5. The time now is 22:20.

Copyright ©2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks