[ramki.grandhi]

One advice my dad gave us when we were young: If an item is considered as luxury (even if it is 50% luxury, 50% need), never take a loan for it. Learn to lead life without that item for sometime, work hard and pay everything with cash!

This has been worked out for us very well so far, but we couldn't avoid taking loans for bigger expenditure like house.

[atnyia]

I had bought Ciaz in 2015 for 9.25 OTR appx with 7 Lacs of loan. I closed the loan in 2.5 years.

Now, I earn substantially more 2015 but I simply don't want to upgrade or anything. 14 Lacs for a Venue is an eye-gouging price as far as my comfort level goes while guys around me keep buying Creta or Innova all the time.

Have I become too old?

[vsrivatsa]

Originally Posted by atnyia

Have I become too old?

I would say the word is "pragmatic". There is really no great benefit in changing from a comfortable car such as the Ciaz to any of the Sub 4M CSUVs for sure. The Creta/Seltos while they offer a decent road presence and good ground clearance they again lack on boot space.

So from where you are currently, the upgrade to these SUVs won't feel like an upgrade. Hence I would recommend - add some nice accessories and continue to enjoy your existing asset

[Reesnat]

Originally Posted by ramki.grandhi

One advice my dad gave us when we were young: If an item is considered as luxury (even if it is 50% luxury, 50% need), never take a loan for it. Learn to lead life without that item for sometime, work hard and pay everything with cash!

This has been worked out for us very well so far, but we couldn't avoid taking loans for bigger expenditure like house.

This is good advice. Any depreciating asset, try and buy with cash, this will keep you in check automatically within your means.

[Axe77]

I have finally come to an age (approaching mid 40s) where I no longer see a car as a percentage of salary.

Instead, I only see what my ultimate financial goals are, how I’m faring towards that corpus and taking some sort of call on how much I would be willing to spend on a car in the context of being generally satisfied (as an enthusiast) without being overly bullish or reckless towards meeting these goals.

Since I already own a home now, automobiles are only the major capex in my life from time to time and the above is a principle I generally apply. On the point of loan, I haven’t taken a loan for any cars / bikes since 2013 (i.e Nissan Sunny, 3GT, part funding mum’s Grand i10; Street triple 765 and Tiger 800) but going forward I might change that and make any purchase a combination of loan and equity purely from a tax efficiency perspective and to conserve cash in hand for opportunistic investments. But I doubt I would buy a car / bike on loan that i could not equally buy outright.

[ss212]

Originally Posted by atnyia

I had bought Ciaz in 2015 for 9.25 OTR appx with 7 Lacs of loan. I closed the loan in 2.5 years.

Now, I earn substantially more 2015 but I simply don't want to upgrade or anything. 14 Lacs for a Venue is an eye-gouging price as far as my comfort level goes while guys around me keep buying Creta or Innova all the time.

Have I become too old?

I don't think you have become old. You probably just don't have the right options.

In India, people buy Cretas mostly as a status symbol.

If you care about things like dynamics and FTD, there are very limited options in India in the above 10 lakh category.

[sid_deb]

Originally Posted by Reesnat

This is good advice. Any depreciating asset, try and buy with cash, this will keep you in check automatically within your means.

Makes sense. The only exception I can think of is when you are considering a company lease. Tax saving actually reduces the net cost of the car, in certain cases even by 75-100% of the car's on road price.

[darkLightning]

When I was looking for my/family's first(after a long time) car in 2018 I was a bachelor then with no loans on my head and just in 3rd year of my job. At that time my criteria was straight forward and simple

OTR price of Car should be less than my package (as you might guess I was in 0% tax bracket at that time so my CTC was almost as good as my take home)

Cue 2020 I was looking for a bike, Now 2 years wiser with a Car loan already running. Affordability wise I could have gone right up to 6-7L category but didn't find it right decision at the moment. so everything from Xtreme 160R to Interceptor were given thought of but ultimately decided to hold on to the purchase as the humble Wego is solving almost all my practical purposes except that it's not a bike.

Cue 2021 I am looking for my second Car, this one is primarily for touring. Now 1 more year of white hairs added to the CV along with upgrading from bachelor to married, Now the affordability question has gotten complex. It is not a simple OTR <= CTC anymore. Now I have to factor in all the expenses and anticipated future expenses along with margins and lot of spreadsheet calculation to come with a concrete number of what amount I can spare each month for Car EMI.

So what I am trying to say is that as we grow on the age axis the question of ideal car for salary becomes murky and it transforms into ideal car for your purpose that you can afford ?

[aniketi]

My calculation says - One should buy car worth less than his/her one years take home or in hand salary. E.g. If one gets 15 Lacs in hand as yearly salary, he/she can go for car around 10 Lacs max. Anything more than that will be stretch and will be too much. But again it depends on his/her overall financial background. If one has no home EMI's and already has own house, they can certainly go for more costly car. For common salaried people, lesser the car EMI, more it is better for other things in life.

[SourPai]

In my opinion, what salary what car is a question that has different answers at different points in one's life.

When you are young, earning lets say 15L per annum, buying a car worth 8 lakhs can still be ok if you need one and do not have family responsibilities.

However, with one kid family and earning 25L per annum, buying a 15L car may be a stretch and can be avoided.

Same logic is for high range salaries. I am not sure if any one would buy a 50L rupee car if earning is around 1 Cr per annum. Lot of things would depend on things such as family inheritance, job security etc.

Buying an expensive car in same proportion of CTC for Salaried individuals gets more and more difficult as income increases. 50% threshold you may have for a 25L salary may not hold good for a 1Cr salary.

[vishnurp99]

If you are salaried, then your Income tax outgo is disproportionately high. For eg a salaried person with 25 lakh will typically pay more tax than a business owner/professional with 50 lakh disclosed income according to a GOI study. So the salary doesn't really matter.
What really matters is the amount of inherited & self generated assets that you may have. You can safely go for a car that's less than 10% of your net asset value and 50% of your annual after-tax family income.

[amtak]

Let me give my 2 cents.

When I was in my twenties, my car's value was more than my annual salary. Fresh job, even fresher relationship, I spent more on both than my savings. This was back in 2004-05. Cost of a home back then in a city like Pune was about 5-8 lakhs and cars were in the same range. Same home costs over a crore today.

Fast forward to 2014-15, when I decided to buy another new car. In between, I had gotten married, have a kid and more responsibilities. Yes, salary has grown as well. However, will I do the same thing now? I used to believe that buy a pre-owned car is for those who don't have money.

My last car bought was brand new, but in 2020 for the first time in my life, I bought a used car (err, SUV). Reason - cars have become expensive. I don't want to keep spending money on upgrading bigger vehicles just to park them in my boulevard/parking. With Corona, we have traveled less (or traveled far and beyond) but mostly avoided interactions with people. I am going to be following this for the next couple of years atleast; call it panic or call it pragmatic. No more spending on new cars just because I can pay an EMI. Come Corona, jobs disappeared just like that.

So if someone wants to buy a car, buy it with no more than 15% of your annual CTC or go for a pre-owned car, if it is from your known circle. Upgrade to a premium/semi premium car, if you can afford the cost of spares. No point in keeping the car if it's going to be used less and that will cost you dearly.

Am I no longer a petrol-head? I still love cars, I want to add more and more cars in my garage, but with time and responsibilities, priorities change. If you are a businessman, you may end up with 10 cars (and claim depreciation on them) and still be happy. If you are salaried, avoid cars that cross an arm and a leg, just because your junior bought a fancy ride or your neighbor has a bigger car.

The world is constantly evolving, better to be debt free at all costs.

[Tutenkhamen]

Slightly going on a tangent here.
I’ve been a keen follower of YOLO.
After all, its pointless to work day in day out and not see our dreams / goals come to fruition.
Point in case, I purchased a pre owned VW Passat couple of years ago to tame my appreciation for luxury cars.
That appreciation has grown a fair bit and fortunately comp packages boomed in tech.

Just closed on this unregistered little baby and couldn’t have been anymore happier

[hserus]

Originally Posted by Tutenkhamen

Just closed on this unregistered little baby and couldn’t have been anymore happier

Demo car from a dealer? I hope you got a massive discount ++ checked it thoroughly as such cars tend to be badly abused.

[Geta]

Life is full of ups and downs. Several people compare it to a roller coaster ride. I disagree. In a roller coaster ups and downs are passive and you don't feel the pain while going up.

The real life is like climbing Mt Everest. Even going up is very gradual, frustrating, physically and emotionally exhausting, painful and requires a lot of sacrifices from oneself and from family. Going down can be sudden and take you by total surprise. Several times, going down is the only option available to stay in the hunt. The worse thing about life is that you don't have the option of quitting the climb and return to climbing on another favourable season.

A car is not an essential commodity. Don't treat your car like your wife because if you do so, you will end up treating your wife like a car. Prioritising things is a must.

At a personal level, my cars have always costed less than my 4 months income but I see it as a stretch. I would ideally not like to spend more than 3 months salary on a car if it suits my requirements (diesel automatic with 6 airbags, with a sunroof)
Or the combined cost of all vehicles in someone's garage should not exceed 10% of their personal net worth. This is my personal opinion.

One last thing: purchase a car on a loan only if you could afford it without a loan.