[Firebird]

Since I don't have EMI, as current vehicle is outright purchase, the only headers remain are

PETROL
SERVICE COST
INSURANCE

collectively spend around 4 to 5% of take home income. Though I would love to own anyone of German Trio, I still keep my brains working and stick to Japan.

[autofreak]

My take on this would be, be it 5% or 50%, if you enjoy (not just happy) your machine to the hilt then go for it.

I started with 50% since my first car was a pre-owned Civic and it was start of my career. Even HDFC credit guy asked me whether I am sure of my decision. It was my dream to have one since my college days and don't regret the decision till date. Daily enjoyments include
- long stare on the cockpit interiors
- snug fit seats
- free reving butter smooth engine
- sharp progressive brakes
- ever stunning silhouette
- beautifully weighted steering
- bombastic top end
- on & on

But god was with me since then.

Now I fall into 15% but no short of enjoyment with my Ecosport titanium option. It gives me daily doses of enjoyment via.

- Solid built (70k on odo and not a creek)
- Low end torque
- High seating position
- ICE which would never need an upgrade
- snug fitting leather seats
- comfort of real keyless usage
- peace of mind with 6 airbags around
- hard wearing plastics
- stellar highway manners
- more than anything else, still hunting for some add-on as its literally fully loaded.

So depending upon your current and future liabilities, you can go in from 10-50% but at the end of the day, it should not be any of the below
- show off job
- peer pressure
- just for the heck of it
- hasty decision

But request everyone in team bhp to avoid calling cars as just mode of transport, metal etc. Not everything can be arithmetically equated.

Its our soul, passion and success.

Happy motoring

[charlessuresh]

So, my parents’ 25th anniversary is coming up in about a month. My dad is really keen on gifting a car to my beloved mum. Just the other day we had a conversation about what car it should be. He suggested that it should be a SUV. I concurred. I further asked him which SUV he had in mind. He responded, “Renault Duster”. My immediate reaction was like, “WHATTT?!?!”

Now, let me give you a bit of background. It’s been about two years since I started working. I have colleagues and peers who earn about the same as me i.e. 5-6 lakhs gross per annum and have bought cars like the i20 and Polo.

My dad earns close to 11 lakhs per month net. I was expecting something like the X5 or the Q5 as his response. Hence the earlier bombshell reaction.

On further thought I realized that he’s always been reluctant on investing in any depreciating asset. For cars, he has a code that he follows. According to him, the car price shouldn’t be greater than the monthly salary. This rule seemed right in Dubai (where we stayed for over two decades) as nothing really is permanent there. Eventually, an expat has to return to his/her motherland.

Now that we are settled in Mumbai, I, personally feel he must invest a lot more. What do you guys think?
On doing a bit of a google search I found out that, in the US, the 1/10th rule is widely accepted and followed. That is, spending no more than 1/10th of annual income on the purchase price of a car. I couldn’t find any recommendations for India. What is the price range do you think he should be considering?

EDIT: As far as liabilities go, he has a home loan EMI of around 3 lakhs for the next 10 years. He is currently 50.
Current cars: 1) 2012 Fabia 1.6, used by me
2) 2006 Civic, used by mom (chauffer driven)
3) Company car 520d (chauffer driven) for dad (not for personal use)

[mayank0782]

Interesting situation there charlessuresh.

Not too sure about the 1/10th rule in the US as any entry level new car will cost upwards of $16k-17k.

This makes the average annual income in access of $150k which is not really the case.

Moreover, This will probably depend on person to person.

Its hard to generalize a ratio like that although with the case you have presented, it should be ok to look for an SUV in the 20-30L range.

Even the duster top end will take you in the 15L+ territory.

[AYP]

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[Mad Max]

Before you jump on the finances, you first need to think long and hard about what your mum will love to drive (and not you or your dad) .

Firstly, an automatic would be great given Mumbai's traffic.

Secondly, a petrol would suffice if this is not replacing the usual highway runner

Third, ease of maintenance. I am sure thats no big deal in Mumbai but definitely think about it

Fourth, what does her peer group drive? I am sure she won't want to be driving an i10 when her peer group is driving C segment sedans.

Now, after all this, start looking at what cars you have available. Petrol automatics are plenty in almost all segments and that's what I'd recommend. While an SUV type of vehicle may appeal to you and your dad, she may not even like the sight of one of those. At 11L, you could get a TSI, City , Zest, Ciaz, Ecosport etc. All of which have automatics and petrol engines. I intentionally eliminated the Verna since my office manager has an automatic petrol and she hates is from day one.

[landcruiser123]

Well, for an SUV, I would recommend the Creta or Ecosport. And yes, I would recommend an automatic. The Duster is too old and crude. Unless you want AWD, there's really no reason to buy a Duster. (Some may argue on ride and hadling, which is also valid)

I think the Ecosport AT might fit in the budeget, but the Creta Diesel AT is simply too good. Take your dad to a Hyundai showroom and make him sit in a Creta and see his reaction.

[vinjosep]

Originally Posted by charlessuresh

So, my parents’ 25th anniversary is coming up in about a month. My dad is really keen on gifting a car to my beloved mum.
2) 2006 Civic, used by mom (chauffer driven)

I take it that the gift is also going to be chauffeur driven? If yes, then you are looking for back bench comfort, isn't it?

Quoting from the official review

"Mediocre rear seat legroom. More like C1 segment sedans than C2" , Duster doesn't seem to be the best for being driven around.

Though not an SUV, I would recommend an Innova (with captain seats for the second row) as a better bet for a chauffeur-driven car. It would also appeal to your Dad's financial taste, considering the depreciation hit would be far less than that for a Duster.

[Mad Max]

From the OPs post, it looks like 11L is the limit. So, Creta and Duster seem almost beyond that budget unless they go into the lower variants , right?

[Akshay1234]

Honestly this is something between you and your dad. We are no one to comment on how much he should put in to a car. That is his choice completely.

Also why would you want to buy a Q5 or an X5 and give it to a chauffeur?

[Vik0728]

Originally Posted by charlessuresh

So, my parents’ 25th anniversary is coming up in about a month. My dad is really keen on gifting a car to my beloved mum.

Originally Posted by akshay1234

Honestly this is something between you and your dad. We are no one to comment on how much he should put in to a car. That is his choice completely.

Also why would you want to buy a Q5 or an X5 and give it to a chauffeur?

Hey charlessuresh, I think I completely agree with Akshay here

A gift for a beloved is something very personal and opinions from others may be ignored completely.

You & your father would care less about a car that is either chauffeur driven or self driven by your mom, as long as she is comfortable & safe during the journeys.
But I (or others) may look at this as a dead investment if the driver is going to have all the fun behind the wheel of a performance SUV/Car.

So basically buddy, you and your father ONLY can make this decision

[amit1214]

Originally Posted by GTO

[b]

I FIRMLY believe that your car /s should NOT take anymore than 10 - 12% of your monthly $$$ (the lesser the better) .....
We need to understand that a cars costing is not made up of the EMI alone - a popular way of thinking today- they need to visit our cost of ownership article to clearly understand the financial outflow associated with ownership. ...

GTO, thanks for the advice and the "real cost car ownership" post. I am sure baking these costs will help in a much more informed & sensible buying decision

Couple clarifications :
1. Does the suggested 10-12% include everything - EMI Interest, depreciation, fuel, maintenance, Insurance etc ?
2. Also, is it suggested as a % of take home income/salary or as a % of Savings?

[shankar.balan]

Say approx. 20k per month EMI over 5 years for a car like a Honda City 2017 model or a Honda BRV or a Hyundai Creta or similar.

This considers say a loan of 90% of the price of these cars which is hovering around the 16-18 lac range.

Add around 6k of fuel spend per month

Add another 3k monthly for maintenance, general consumables, accessories,
car washing/ detailing spends and insurance including zero dep.

Straightaway that is 30k per month, give or take.

This means that according to the 'theory of 10% of income allocated for car spend', a man should be taking home at least 3 lacs a month if he wants to buy such a car.

To actually take home Rs 3 lacs a month the gross salary per annum has to be around Rs 45 lacs!

Very honestly, how practical is this?

There are people who earn significantly less and who drive some seriously fancy cars!

Equally there are some really well off people including the 'phoren returned' variety who remain humble and anonymous, driving very ordinary, run of the mill, vehicles.

Personally, I am increasingly
of the view that I should spend well on maintenance and just hang on to my cars for a much longer time than I used to.

And whenever, some day,
I feel the urge to upgrade, then I should just go and buy a second hand car of a marque and trim spec that I really like.

I really think that car prices here in India are completely out of control and I dont want to be spending that kind of money at all, given that I barely manage to drive 7000 kms per annum these days!

[The Rationalist]

Anyone who is buying cars worth more than 6-8 months salary is overstepping the line for sure , especially if one has a habit of changing cars every 5-6 years. If you can hold on to car for 10 years spending an years salary can be considered fine. But I'm sure not even 10 % of car buyers stick to that line, they just splurge because for most Indians house and cars are something they value more than vacations and a possible retirement.

My colleague spent an years salary on a Corollla, and he has not even any retirement plan or savings at the age of 40. It all boils down to your luck I guess, if you live beyond 60, you will get screwed and if not you enjoyed a life without compromising on your desires. ( One school of thought is even if you have money at the age of 60, your body won't have the energy to do much, so enjoy the youth! )

Unless you don't know what is in store for future and if you are a risk averse guy, just control your desires, because once you buy a better car, there is always another better one in a higher segment and then you will never be able to fulfill every desire. Not even one in a million get to own a Lamborghini or Ferrari in India.

In my case I needed an automatic car, resisted the temptation of a bigger manual car and went for something costing 5 months salary, but got an automatic.

[Torquedo]

Originally Posted by GTO

I'm truly pleased that nearly 2/3rds of BHPians spend less than 15% of their earnings on cars.

I am quite bemused by the way votes have been casted on this poll and the poll on which variant to pick, here are the reasons.

1) An average car buyer would buy a car for a bare minimum ~ 4L (be it used or new), now if this be the case that means the ones who have voted for <15% have at least an annual income of 26.6 and this is dated back to 2015 so 2017 the earnings would be much more.

I simply cannot buy the fact that someone earning close to 30 LPA would settle for a car ~ 4L, i'm dead sure, he/she would look for a more premium offering.

2) On the variants poll, it seems most of the BHPians would opt for the top spec variant, can we request the ones who have polled for this variant also mention which variant they drive? Dead sure again, numbers would not add up.

Polling it seems, follows the herd mentality, not for all, but for a good number.