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-   -   Financial thumb rules to follow when buying a car (https://www.team-bhp.com/forum/indian-car-scene/210397-financial-thumb-rules-follow-when-buying-car-8.html)

And you should be.
Go and get those rings rl:

Interesting thumb rules- what I realised over a period is no one rule fits all logical and emotional needs, and one creates/refines (new) rules to suit one's decision and situation. My cars are in their 8th (i20 elite Asta Crdi 2014) and 9th year of running ( Pre-Owned Jetta comfortline Tdi 2.0 2014) respectively. Bought both cars cash down. Replaced tyres, fly wheel/clutch plate of Jetta in 2015. Both cars are running well, I would keep those for another few years. I subscribe to the view 'earn it and spend it'- house or car. If one does not have enough cash, buy what's affordable or make more money.

What if you are an enthusiast?
What if you have been dreaming about your "dream car" from your teens?
What if you have one shot at your beauty and it represents what you have been dreaming?
What if you spend 2 hours per day inside it, and would take care of it like your baby?
What if you can write off depreciation, interest, and maintenance as professional expenses?
What if you have to wait to be a grandpa to afford your dream as they say in the forum?
No 20/4/10 rules can thrive in your heart !!

I need answers from this forum
One more quick Question, How much should I earn to afford a 330i M sport?

All you will get from the forum is a surfeit of information from a dazzling number of differing points of view.

You could further paralyze yourself by self-analysis of all that information. Or you could do whatever you want to and rationalize/regret your decision later on. Come what may, after all, you are likely to meet the fate you sought to avoid on the road you take. Such is life.

You will seldom get an objective silver bullet for purchasing decisions here. Where the forum excels from a value proposition perspective is in the post-purchase ownership phase.

Please pardon me for saying this but if you are looking at this forum to answer these questions for you, you are at the wrong place. People who drive 330i M either drive it because their family bought for them or they made enough moolah to afford one. People who are in second category certainly will not come to this forum to get answer to this question and the first category will not bother about the affordabulity.

Once again my apologies, but somehow I felt this had to be said.

I bought my first car a couple of months after this thread was started.

I thought I did not follow any rules

Broke the 20/4/10 rule: Took a 5 year loan (though did make a 25% downpayment) and the monthly outgo was closer to 20% than it was to 10%.

Did not follow the 50% of gross income rule even though I am the sole earning member in my household. The OTR price was almost the same as what I had made in the previous 12 months.

I did what I had to do. Didn't have much of a choice and didn't want to compromise on my requirements so that at least I can at least stick to the 10 year rule.

I thought I was making a big mistake. Cursed myself. Second guessed myself. Should I have gone with something cheaper? Secondhand?

BUT

It all worked out in the end. And it turned out to be easier than I thought.

The car will complete its 3rd year in 2 weeks.
The loan is almost finished. I can choose to close it off today if I so wish.

All it took was some systematic payments along the way, over and above the agreed EMI Amount. These payments kept increasing as my earning did and I could easily catch up.

Morals of the story:

20/4/10 is simpler if you look at it in hindsight.

50% of gross rule may or may not be applicable to everyone in every situation as long as you can easily afford the downpayment without touching your emergency stash. How much you keep is more important that how much you make in this situation.

Anyways the rules themselves are good rules of thumb, but your personal mileage may vary.

P.S.: I will definitely try to keep in mind the 36% overall debt rule when I finally take the plunge on the housing loan.

Can tell you how I think about this. I am of the opinion that with the current interest rates,

if one has free cash equivalent of the amount being taken on loan, then the only restriction is if you can afford the EMI every monthly without it pinching you.

A very rough example:
- A car loan effectively works out to around 4-5% net
- An FD these days is giving higher returns (not taking Income tax into consideration).

So if you have 50 lakhs free cash (not contingency cash), you can take a 50 lakh car loan as long as you are fine with the EMI.

Am not discussing whether it is financially prudent/ best economical decision etc. The idea is purely from an affordability standpoint.

Let me give you my two cents as a true enthusiast.

In today’s cruel world if driving cars is your de-stressing thing, your dream of owning a 330i should be as soon as you can if not today. I’ve always learnt that once EMI starts rolling, it becomes a habit and other expenses automatically get adjusted to the overall income.

All these rules are good to know on theoretically. When you want something, you should thrive for it and get it. If you can’t even spend money on yourself, why work for it!!

Savings is a relative term and often the money gets passed on to the next gen. why? Because the parents compromise / sacrifice.

If you’re not ambitious today when will you be? After 50? rl:

After all, even correlating this to food : eat today when you can or regret when you can’t. :cool:

Cheers
Amey