[arindambasu13]

Originally Posted by Mi10

Human Psychology towards Time Value of Money and Inflation.


Affordability to buy - Yes
Capacity to own - Yes
Willingness - No
Reason: Psychological bottleneck.

Have any of you undergone / undergoing such thoughts?

I have pretty much the same thoughts whenever I think about buying a performance sedan or a powerful SUV. After working for more than ten years, I have garage of a Honda City (2019) and a Ford Ecosport (2020), both of which give me plenty of enjoyment as a driving enthusiast, and at the same time are reasonably affordable to maintain. Of course I get tempted every time I see a Skoda Octavia or a BMW 3 series on the road - but the prices of these vehicles are absolutely absurd and downright astronomical, if you really think things through. Just cannot fathom putting INR 35-40-50+ lakhs into a depreciating asset. It is all very well to say that happiness of buying and enjoying a new car cannot be measured by price/money, but that is just a simplistic way of justifying a mammoth expenditure when it comes to these luxury purchases.

Perhaps one day I will succumb and put money into such an expensive car, because the itch resurfaces time and again. But for the time being, both my City and Ecosport (bought new and collectively costing INR 25 lakhs) give me tons of driving pleasure, are powerful, practical and reasonable to maintain. Plan to keep and maintain them for a long time to come.

[AlwaysASwifty]

My first car was an Alto, and I bought my first car at the same time as my Dad bought his 1st car. I took a loan from my father, my father in law and my company to buy my car. This happened after the initial discomfort of using a scooter. I remember the first day I joined my first job and one of us trainees had come in a car and the VP of the company remarked “ How much do we pay these trainees!?”.

Car ownership then was a distant dream (‘97) and the car market was just opening up. Even though my salary rose through the years that I could easily afford a BMW later, I continued to drive my 2nd love (My Suzuki Swift Zxi, which will be going to Valhalla this year). Initially, a car was a symbol of status and upward mobility but at some point of time I decided that as long as I had a safe, reliable, trustworthy steed I didn’t need a replacement. This March, I will be buying my 3rd car, a Verna DCT turbo. I could still afford a BMW but am saving the bucks to indulge in other hobbies (photography) and of course saving up for retirement.

[for_cars1]

Originally Posted by arindambasu13

....the prices of these vehicles are absolutely absurd and downright astronomical, .... depreciating asset.... happiness of buying and enjoying a new car cannot be measured by price/money

To answer the specific question in the title of this thread: A car costing upto half of the yearly salary of a salaried individual should be comfortle including the purchase and maintenance aspect.
The above measure is assuming one is not already burdened by a home loan which most salaried folks are. Affordabilty greatly reduces when one is burdened by big housing loans.

Now coming to the car itself, it may be a depreciating asset but a very useful one that can be beneficial in many tangible and intangible priceless ways. So its never a bad idea buying a good car to the extent we can afford which serves our purpose.

When the budget is limited, the car we really "need" rather than the car that we "want" should dictate the purchase decision. When we ask ourselves the question, it sould be apparent why a particular type of expensive vehicle is needed and we should have a satisfactory answer in our own mind.

For example:
"I need that expensive SUV to go on long tours over bad roads which I frequently do with family and I'm really struggling with my current car to meet that need"
and not for example:
"I want that expensive SUV because my neighbour/colleague just bought one and it looks good though I may use it just for local commutes like a normal car and want it just as a status symbol though I may struggle both buying and maintaining it"

The pricing of vehicles in the luxury segment in India is intentionally kept artificially high just to maintain that "premium feeling" and not because the car offers anything extraordinary. The OEMs are really milking the premium brand image, they are really not worth their price for the budget conscious folks, however some buyers will obviously have their specific and valid usecases (eg: to impress clients and attract more business, depreciation/tax saving or just because it is affordable to them) due to which they are purchased at these astronomical prices.

There was a time when luxury cars in india had that engine in the 180BHP 400 Nm range for a 4 cylinder engine with bells and whistles not found in normal cars.
But these days, most normal mainstream cars at around 25 to 40 lakhs offer all the power and features that luxury segment cars offer at a fraction of the price.

[Asoon]

Originally Posted by quasimodo

Personally- I don't quite agree with it. For my cars, I like to pay the minimum downpayment and the rest through loans. If you have the money then it's much better to NOT use the money for the purchase but invest it for 5 years and maximize your loan (assuming you're credit prime and get a decent APR loan.
I have attached a simple calculation model for you to understand it.

agreed
What i meant was a person should not spend unless he / she is not in this position, now if you are in the right position then how you manage your finances is upto you.

I see a lot of folks going for a segment above just because they feel that the EMIs are affordable. In reality, you have to pay loans in 7 years, then there is regular servicing, insurance, fuel costs, depreciation (massive for new cars) and others (minor body works) and unless you do not have complete understanding and evaluating the decision just single parameter can land you in trouble

[Way2Jimny]

Originally Posted by for_cars1

There was a time when luxury cars in india had that engine in the 180BHP 400 Nm range for a 4 cylinder engine with bells and whistles not found in normal cars.
But these days, most normal mainstream cars at around 25 to 40 lakhs offer all the power and features that luxury segment cars offer at a fraction of the price.

Reminds of an incident when I met a person who recently bought a used B-Class 180CDI.
A non enthusiast who just wanted to own the Merc for brand image.
I casually asked him about the power of the car, he replied it should be 170-180 bhp.
I told him to check out on google and that is when he realized it is just a 105 hp engine

To add salt to the injury I let him know B-Class was sold only for 27 Lakhs in 2014

[Hatari]

Originally Posted by Mi10

Affordability to buy - Yes
Capacity to own - Yes
Willingness - No
Reason: Psychological bottleneck.

Have any of you undergone / undergoing such thoughts?

Yes.

A few more reasons..
- Want to upgrade to an Auto with paddle shifters, but the Slavia's niggles/rattles have deferred it for now.
- I self drive 100% of the time, and have maintained my current car really well. So no real need to change.
- Being EMI free is bliss.

[SolitaryRabbit]

Buying a car is a complex decision. It is a mix of Heart (wants) vs Brain (needs). If we go by wants then personally I feel we should stick to around 30-50% of our annual in-hand salary. However, this might not hold true for many in the current scenario in the country where average salary is around Rs 10 Lakhs. These days car has also become a need than a want and to get a safe car with a decent set of features we need to spend close to or more than 15 lakhs. This is where I feel our governments should step up and either provide good public transport so that a car doesn't become a necessity for mode of transport but a luxury, but that's a different topic of discussion so let me not digress.

So I can see why majority of us easily spend more than our annual salary on a car and sometimes have to justify it by sacrificing other things like travel, a good house, hobbies, family, healthcare etc in life. I can totally relate to people purchasing their dream cars for 2-3x their annual salary because ots not everyday that we purchase a car but personally I wouldn't be able to take that plunge even though I love my cars as then it would mean sacrificing other luxuries and necessities in life for a couple of years.

I might be the weird one out here who loves cars but needs Japanese reliability (I want to keep my car for over 7-8 years without fuss), relatively safe, not much tech (as I believe the first things to break/ stop working and male a car dated these days are tech related stuff), fun to drive (had to be Manual), decent service, 30-50% of my take home and no car loans.

[DCEite]

Originally Posted by SolitaryRabbit

These days car has also become a need than a want and to get a safe car with a decent set of features we need to spend close to or more than 15 lakhs.

I think the Indian consumer, in general is more inclined towards the "want" rather than "need".

For example, you said there is no decent safe car under 15 lacs.

Well, 10 lacs can get you Hyundai Exter with 6 Airbags.
10 lacs can get you a safe Compact Sedan like Amaze/Tigor with 4 star safety.
Spend more and 13-14 lacs get you 5 star Nexon.

Same with Punch et al.

Now, why is the consumer then moving more towards the >15 lac segment, if his basic "needs" can easily be fulfilled >8 lac onwards. It is because of aspirations and the want to move to bigger, stylish and modern vehicle so as to "mark" his place in the society (and also due to peer pressure).

[Love4Cars]

While buying a car one needs to also take into account the duration for which the car will be kept.

If I am buying a car for next 6-8 years, then extending the budget to say 60-70% of annual salary is ok, provided one can maintain other expenses/EMIs. The extra amount may pinch in initial 1-2 years, but with Salary hikes in subsequent years, it will be ok and you would actually be spending lesser as a %age of your Annual salary in subsequent years.
This is aligned with the thought that an expensive car is retained longer and costs cheaper in the long run.

Ex: I bought an Ecosport Diesel Titanium MT in 2021 at 60% of my salary and I am already having an itch to upgrade in 3 years as I didn't buy S variant and now my budget has increased along with need for a car with 6 Airbags and Isofix missing in Titanium model.