[Proxima]

Great article there Decite. And apt comments, GTO. 15% should be the max in a private sector, and maybe 20% if you're in a Govt job.

I know for a fact that most Americans spend less than 10% on their cars. There is something to learn from them as well.

[greenhorn]

my car load was a long term one , but I've shortened the term and will be finishing by this year, hence the percentage is a bit big. I've found my car loan a big liablity in my life - I found out that My car owned me , not the other way round, so wanted to do something about it. post november. my spending will be <10%

[kiren]

It also depends on the type of job you are in. Being self employed & having to travel a lot, the total expenses (i.e fuel + emi + maintainance)i incurr is more than 15%.

[ashish22]

i voted for 31-50 %
i'm still in the initial stage of my career and i've to maintain two cars...vRS and OHC of my own. My dad got me those cars and i think this is the max he can do, i cant expect more from him.
Maintenance is my responsibility and thus i bear it, although its on the higher side, but then i'm fullfilling my desire and i'm happy.
thankfully i dont have any other major expenses such as bills or rents. Whatever i earn i can spend on myself and i guess this is the only stage where i can do this. Later on i'll have more responsibilities to take care of and i'll splurge carefully.

[paharino1]

Speaking of Americans - on whom our Indian middle class tries to model itself - the 1st car for the kid at 18 - is sponsored by the parent(s) - the typical budget is $5-10k - from which they buy 2nd hand cars

& if the children arent' happy/crash the car - they are on their own - u wanna upgrade - earn it

[aseem]

Originally Posted by GTO

NOTE : The poll is NOT public, only to protect those who wish to maintain their privacy.

I FIRMLY believe that your car /s should NOT take anymore than 10 - 12% of your monthly $$$ (the lesser the better). I know for a fact that there's a lot of BHPians way over this comfortable zone, but most of them are younger / students (pocket money) or are in the initial stages of their career. I hope better sense prevails once they grow a little older and have a higher set of responsibilities on their shoulders. 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.

I'd rather drive around in a car thats less expensive, personalize it a li't bit, have money in the bank / savings / investments and sleep with that peace-of-the-mind than drive a more expensive car & worry about the next EMI / other large payments. An example : I know of a certain 36 year old who spends about 1/2 of her income on her flashy new German car. When I bump into her at a social gathering, I see her as more of an outright fool than someone of a certain "status" (which she'd hoped).

Related comment : SAVE atleast 40% of what you make. Life will show you more than a single rainy day. Plus, this way, by the time you are in your mid-forties, you'll have a lot of money working for you (interest, dividends etc.).

Related comment II : If you really want that better car, work harder / smarter!! Trust me, it works.

Agree with most of it, apart from the save 40% part. Generally when one is young (like I was a few years back), spending even 50% on car is not bad, as your mostly still living off of your parents and have a financial backing.
As you get married, have kids, houses, and other EMIs, your risk taking ability of course takes a hit but at the same time your desires increase. Spending around 15% on car EMI is just about right, and can be stretched to 20% if its a dream car and your other EMIs are in check.
However I dont think one needs to save 40% of their salary, and buy the rainy day argument. One should have a balanced life, but live today and not just focus on tommorow. If you take into account 10-15% of your salary goes for car, 30% goes for home, than as per your argument one would only be left with 15% of his salary for living expenses.
I like the living your life in present and moderate planning for the future approach as opposed to extreme saving approach in India. But thats just me.

[carboy]

Originally Posted by GTO

I FIRMLY believe that your car /s should NOT take anymore than 10 - 12% of your monthly $$$ (the lesser the better).
== snip stuff I generally agree with ==

Good advice, GTO.

And I don't believe in taking a loan to buy a car for personal use, ever. Actually, I don't believe in taking loans for anything except buying a house
and even there don't splurge too much on a house.

If you can't afford to buy a new car cash down, try buying a 2nd hand
car. If you can't afford a 2nd hand car, try a bike. The EMI you were supposed to pay otherwise - collect it in a bank deposit (or any other safe
investment) & when you have enough money, buy the car cash down.

[abeerbagul]

I spend about 5% of my income on the car emi.
Total expenses on the car include:
1. car emi
2. insurance
3. petrol - driving only on weekends
4. servicing + consumables
The total is approx 7% of my income.

[indian21r]

An interesting poll. I will be picking up a car when I am done with college. Looking at a second hand car that will probably take up roughly 40% of my annual earnings.

Well that is assuming I get a decent Job offer, else no car for some more time :(

Downturn has affected my plans drastically

[sj_koova]

I got my first car after 5 years of my career and second after 8 years.
By the time I got my first car, I was already living in my own flat. My flat's cost has doubled since then and car's has halved. Today I feel financially secure (as long as I have the job) and have balanced expenditure.

And the most important, you can save lot of tax during this period with proper investments and home loans.

My priority is assets rather than liabilities. And a car is one of the biggest liability in all means. Depreciation, ownership and running cost kills you.

Spend your first four or five years of your career to make yourself financially free (to some extend). Start thinking about assets and balance during this time. As GTO said, make a diversified investments. Once you have enough balance in your monthly income, think about your car.

And if you can't live without a car at early stages of career, think of a second hand car.

And don't forget to read "Rich Dad Poor Dad". It may not be completely relevant for today's times, but still you can take lot learning from it.

[SS-Traveller]

Originally Posted by sj_koova

And if you can't live without a car at early stages of career, think of a second hand car.
And don't forget to read "Rich Dad Poor Dad".

Most members on this forum can't live without a car, I'm sure - even if it has to be 4th hand! In the beginning of my career, car, scooter and fuel expenses were at least 40-50% of my income - that was before marriage! It didn't help that I not only didn't have a "Rich Dad", my "Poor Dad" passed away while I was in college...

[aaggoswami]

Originally Posted by DieselFan

As someone said he spends more than 50% of his income on his car. What else does he do then. Car in itself is not all. You have rent to pay, you have to bring bread on to the table, you need a good vacation once in a while, you need to save for your retirement. The last one is very important.

My two paise here is that saving potential of a person prior to 40 years of age is the highest as he has very limited liabilities. One has to create his retirement fund before the age of 40 and ensure that is invested properly to earn a decent return by the time he/she retires.

Cars should not take more than 10% of your earnings, 40% or more should go towards saving for your retirement.

I would like to add that a person like me ready to spend more than 50% of his income on cars will be ready to live in a one room kitchen house who rent wont be much. He can feed himself and driving the car would be vacation in itself.

About retirement, after I am 35 years old, I will saving for retirement. Everything else except automobiles will be on back seat.

Originally Posted by NetfreakBombay

Go for it.. when you start out and have NO liabilities and no dependents. At that point you can splurge all your salary. Probably the best part of life (from financial Point of View).

Just make sure you are not making any long term EMI commitment

Each and every individual came here with his/her own luck, so as such I am free from any responsibility ( except my parents and this nation ) and will go alone with his/her own luck. And if I am earning money, its me who decides how its going to be used in what quantity and when. I take that decision, nobody else. And that part would be surely the best part of life.
And long term EMI commitment = NO. I know the banks are not the best and the interest rates are killing. Not happy with this scenario, but its not likely to change. Probably keeping into mind my safety, I wont be going for private banks like HSBC, etc., but would go for SBI, etc. They take their own time to get a thing done, but are a safer bet.


IMO, for me cars = life. I have been dreaming of cars since I was very young. Whenever we used to travel I would stand in rear seat to see the view. My father and grandfather marked that I was also observing speedo at specific intervals. Those days we did not have seatbelts. Its an expression of love and trust towards cars.

[ac 427]

I agree with what every one is talking about here, but as per many researches done, Indians buy cars which is 50% of his annual salary. Considering today it is the age of EMI the 50% of the annual salary deferred over 3 or 5 years does not come up to a lot.

Originally Posted by aaggoswami

I would like to add that a person like me ready to spend more than 50% of his income on cars will be ready to live in a one room kitchen house who rent wont be much. He can feed himself and driving the car would be vacation in itself.

About retirement, after I am 35 years old, I will saving for retirement. Everything else except automobiles will be on back seat.

Each and every individual came here with his/her own luck, so as such I am free from any responsibility ( except my parents and this nation ) and will go alone with his/her own luck. And if I am earning money, its me who decides how its going to be used in what quantity and when. I take that decision, nobody else. And that part would be surely the best part of life.
And long term EMI commitment = NO. I know the banks are not the best and the interest rates are killing. Not happy with this scenario, but its not likely to change. Probably keeping into mind my safety, I wont be going for private banks like HSBC, etc., but would go for SBI, etc. They take their own time to get a thing done, but are a safer bet.


IMO, for me cars = life. I have been dreaming of cars since I was very young. Whenever we used to travel I would stand in rear seat to see the view. My father and grandfather marked that I was also observing speedo at specific intervals. Those days we did not have seatbelts. Its an expression of love and trust towards cars.

Am with you on that brother I dont mind spending 50% of my annual pay or business profit on my car.
As through the emi i will make the payment deferred

cheers,
AC

I am finding it very hard to believe few of the posts in this thread, most of the selections are for less than 15% of the annual Salary. Considering the cars that people own, i bet the salaries would be CEO like. E.g acc to the 15% rule, for me to buy a Maruti Alto (3 lacs) i should be earning 20 Lacs.

I will spend around 50% of my annual salary for a car.

Cheers,
AC

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[Fountainheader]

Originally Posted by ac 427

I am finding it very hard to believe few of the posts in this thread, most of the selections are for less than 15% of the annual Salary. Considering the cars that people own, i bet the salaries would be CEO like. E.g acc to the 15% rule, for me to buy a Maruti Alto (3 lacs) i should be earning 20 Lacs.

I will spend around 50% of my annual salary for a car.

Cheers,
AC

Guess you are getting the math horribly wrong. For a salaried person, buying a car with 100% downpayment is highly improbable. So thats where the EMI funda comes in.

For someone who earns say 50k per month, I guess not more than 10k will be alloted for car EMIs. So spending 50% of annual salary on a car would sound stupid to me. But then thats me.

[deepclutch]

car is used only when needed(indica dle here).else ,it is motorcycle which I use.maintanence - it is less.