[shankar.balan]

Submitting a couple of things.
1. If a brand New Car - Company lease - 3 years tenure - and buy a vehicle which represents less than 20% of ‘eligibility’.
2. If you're mad about some brand, buy a lightly used example with full cash.

Fact is India is an expensive place in which to buy and own and run and maintain a car. And the Urban roads snd infra are also very iffy. And government policies are very unpredictable, ill-thought through, populist (to the larger and more powerful lobby) as well as draconian. Apart from chaotic crowds and traffic etc.

All this makes the whole car ownership thing a pain more than a pleasure.

Most folks in their mid- senior working lives, have too many responsibilites and too little time. Hence, while one can perhaps afford that E Class or 740 Li, one just won’t have the time to enjoy it on the open roads.

One will end up spending most of the time stuck in traffic between ORR and Iblur or something like that.

These are the great sadnesses.

Time is the Greatest Luxury known to Man. And that is the one commodity which normal working folks with normal work and family responsibilities simply don't have enough of.

[V.Narayan]

Originally Posted by raviemailid

Lets start with something about me: I currently have a HL, 1.07L a month, 8 more years to go. This is my third house, other two loans completed. I have a market portfolio (MF+PMS+equity) of over 1.1Cr

We do not know your income or your other liabilities. But if I had a cousin with these assets and say an income of Rs 75L per annum I would not advice her to buy a Rs 80L car. The luxury car one buys, IMHO, should be a tiny fraction of your liquid networth say 5% to 7% or some equally tiny number. Just my view.

I am completely torn about what to buy at this stage. While I can spend ₹80L on a car, I keep questioning whether I should. In 10 years, an ₹80L German luxury car might be worth just ₹20L, whereas the same amount invested in mutual funds could grow to ₹2.5Cr— a significant boost to retirement planning.

Depends on what stage of life you are and what you have saved up for retirement, for children's education & marriages, for emergencies etc. also what assumptions are you making regarding your income over the next 20 years. We should bear in mind these are assumptions and reality can at times be a surprise.

But then again, you only live once. If I don’t splurge now, when will I? Important note- my company doesn't fund these cars through car lease program- these will be from my pocket after tax money.

We live only once for 80 years. Everything does not have to be achieved before 55. For many their best years are the 60 to 75 stage of life.

I usually approach finances with a strict mathematical mindset, avoiding emotional decisions. That said, buying the XUV in 2015 was an emotional choice, and opting for the E-Class or EQE now would be too. I feel like I’m stuck in an endless loop, and I don’t see myself breaking free anytime soon.

Buying an EQE on EMI sounds like a big stretch and depriving yourself of future savings. Buy an EQE costing car if you can do it cash down. Cash down is usually a good test of affordability.

Best of luck with your buys.

[Tekina19]

I think along with what car at what salary we should also add which car. If one is buying any German or American car (Like Jeep), he should have big pockets. German cars are surely not for middle class people. Their normal maintenance is still manageable but if something goes wrong then it can burn your pockets for sure. Also their resale value is less compared to Japanese cars like Maruti, Toyota.

Many times I get very tempted to buy a Jeep compass or Skoda Superb in resale as both are available at very attractive prices. But considering future maintenance costs and fear of going something wrong, my brain always pull me behind.

[Axe77]

Originally Posted by raviemailid

Lets start with something about me: I currently have a HL, 1.07L a month, 8 more years to go. This is my third house, other two loans completed. I have a market portfolio (MF+PMS+equity) of over 1.1Cr, down by 20% or so from its peak in October 2024. There are other diversified funds, but they all have taken a beating in the current slump.
…
I am completely torn about what to buy at this stage. While I can spend ₹80L on a car, I keep questioning whether I should.
…
But then again, you only live once. If I don’t splurge now, when will I?

The information above is too limited (and I’m not asking you to clarify further) to give an absolute binary answer. For instance, one has no idea if the two real estate you own are collectively worth 1 cr or 10 cr (I’m counting two not three assuming the house you live in should not be counted). Similarly what is the order of magnitude of the ‘other diversified funds’ vis a vis the 1.1 cr of the ‘market portfolio (MF+PMS+equity)‘ - it could be 50L or 5 cr - no idea. Therefore the general guidance put forth by folks like Androdev, Ninjatalli and VN is really valuable and definitely make sense to me.

A lot of the general pointers that VN has put forth in particular (specially the extracts below) resonated strongly with me and you could use those as a guidance.

For instance, I’d keep automobiles strictly within 5-6% of net worth in the 40+ age bracket, even lower perhaps once you’re 50+ I feel.

Provisions for eduction, your own retirement needs etc must take priority over a pure automotive splurge. Once you’re in luxury car territory, I feel a good rule of thumb guiding a purchase is - if god forbid life goes pear shaped for any reason tomorrow (unexpected health incident, job loss anything), can you simply cut a cheque to retire your car loan without breaking a sweat.

Assumptions and reality can also turn out very differently like VN rightly pointed out. We may plan to work till 60 but so many things can move differently from base case scenarios once you’re 45 / 50+.

The good part is, a luxury car isn’t a necessity to have fun road trips. You can have incredibly fun cars at every price point and have a whale of a time.

Originally Posted by V.Narayan

The luxury car one buys, IMHO, should be a tiny fraction of your liquid networth say 5% to 7% or some equally tiny number. Just my view.

Depends on what stage of life you are and what you have saved up for retirement, for children's education & marriages, for emergencies etc. also what assumptions are you making regarding your income over the next 20 years. We should bear in mind these are assumptions and reality can at times be a surprise.
….

Buying an EQE on EMI sounds like a big stretch and depriving yourself of future savings. Buy an EQE costing car if you can do it cash down. Cash down is usually a good test of affordability.

[carjack3090]

One thing I would like to say is people should use the Marginal Utility concept while purchasing car and by this I mean MU with comparison to price

Let me explain. Suppose car price is 50 lakh and you are making 30 lakhs a year.

You decide to purchase the car with a 5 year loan and EMI period (considering total EMI is coming to 50 lakhs after down payment).

If 10 lakhs a year out of 30 lakhs a year (1/3 of your total salary) seems justified to satisfy your need, then definitely go for it.

I have seen folks asking me not to consider EMI cause of the stigma it possess but with fact am using a product for at least 5 years, I don't mind paying for it over 5 years as well considering it serves me well

[NerdSpeaks]

What car at what salary is very subjective matter. I remember someone had mentioned in one of the threads that if you can afford 2 cars of same price with all other conditions remaining same, then you should go for one such car.

Point is that you should be able to afford total loss of car as a worst case scenario. Plus, I strongly recommend buying Safest possible car in the budget. No compromise here. (Safe car is available in almost every budget).

[Asish_VK]

The car you can afford at a given salary is subjective. It largely depends on your financial responsibilities, such as home loans, children's education, medical expenses, and supporting parents.

Another key factor is your upbringing—some people, despite having the means, struggle to spend on expensive cars due to their habits and mindset formed while growing up (I am one of those folks )

My theory : If someone is financially uncertain about buying a car, it's a sign that he/she is not fully ready for the purchase yet.

[StrykerEV05]

I'm 27 years old, bought my 1st Car (Nexon EV) around 3.5 years back. I've loved cars from my childhood and the feeling has gotten stronger with age. While buying the Nexon EV, after the 2.5 lakh early bird subsidy the on-road price was almost 100% of my take home (post tax) and about 70% of my CTC that year. It was a heart over head decision back then for sure.

Now after more than 40 months with the car and seeing the rapid evolution in EVs, I'm having the itch to upgrade. I'm thinking of upgrading to BE 6E Pack 3 which would cost me 28-29L on road in Mumbai.

There are 2 major roadblocks I feel:

1. I have a home loan (bought a 3bhk in Santacruz East) which is taking almost 60% of my post tax earnings. I live in this house so no expense on rent in Mumbai as such.
2. The resale value of the Nexon EV is very poor. I have a 35k km run car in very good condition but I'm hardly getting 6-6.5 lakhs for it.

In addition to the above I have about 30-35 lakhs in my savings + investments currently (lost about 5-6 lakhs in the recent downfall). I think I can afford the car but that's going to wipe out all my savings so far. Also the on road cost of the car is about 70% of my CTC and let's say about 110% of my take home currently.

What do you think I should do?
Planning to take it via company car lease, won't have to pay anything upfront. But the EMI would be about 40k+
So my home loan EMI + this car lease would take up almost 82-83% of my in-hand income.

[carjack3090]

Originally Posted by StrykerEV05

I'm 27 years old, bought my 1st Car (Nexon EV) around 3.5 years back. I've loved cars from my childhood and the feeling has gotten stronger with age. While buying the Nexon EV, after the 2.5 lakh early bird subsidy the on-road price was almost 100% of my take home (post tax) and about 70% of my CTC that year. It was a heart over head decision back then for sure.

What do you think I should do?
Planning to take it via company car lease, won't have to pay anything upfront. But the EMI would be about 40k+
So my home loan emi + this car lease would take up almost 82-83% of my in-hand income.

Read about Marginal utility concept and then decide. If the satisfaction you make this decision outweighs any downstreams then go for it.

[am1m]

Originally Posted by StrykerEV05

So my home loan emi + this car lease would take up almost 82-83% of my in-hand income.

This is only my opinion, but to me this would be a scary situation to be in. This is just me, but the questions I would ask would be:

* What if I lose my job?
* What does this upgrade really get me? More comfort? A safer vehicle? More room for my growing family?
* In Mumbai, with its traffic and parking issues, how much better will a new car make the driving experience?
* Is my present car doing fine?

Your decision ultimately, what works for one may not apply to another, but just some things to think about.

[Mr.Bentley]

Originally Posted by StrykerEV05

I'm 27 years old
.
.
So my home loan emi + this car lease would take up almost 82-83% of my in-hand income.

These numbers shout out loud that you need to wait before upgrading. I wouldn't even think about it right now.

Having only 17% of one's CTC, that too for multiple months at once is scary on multiple levels, even if there's other support systems (like insurance) at disposal.

What you save in your early years matters a lot in the long term.
You're young, you already have a capable car.

Having liquid money in hand at disposal, without any strings (EMIs) attached is a feeling in itself (faar better than a 30L EV).

[Visaster]

No amount of financial balancing will make sense to buy a dream/luxury/sport vehicle in India. All the calculations you make to any amount of salaried income into buying an big brand/imported car/bike on huge tax to make it look affordable is wrong. End of the day it is just burning your money to buy some part of life happiness.

Calculate the depreciation + maintenance + spare parts + Loan interest + insurance. The sum amount, you should be ready to loose on a daily basis for the fun/purpose the vehicle adds in your life. Say roughly a 75L vehicle bought on loan, will cost you Rs. 2000-2500 per day to call it your own. If you like that kind of number added to your life span, I would say yes YOLO.

Purely my opinion, not engraved anywhere.

[M.Dua]

Very subjective and very different for everyone. Everyone is placed very situationally different.

While I completely disagree with YOLO argument for a money spending decision I firmly believe there has to be a balance in life with pampering yourself also.

I for one at age 26 had bought a sparingly used luxury car (costed me a brand new Octavia) when me and my beloved wife were DINK doing well in our lives. I used it for 6 years and we had the time of our lives. We drove it for almost 80000 kms in 6 years time for road trips, official trips, weekend fun and we loved every proud bit of owning and enjoying one.

Cut to 6 years later with two kids and income almost 4-5x of what we used to make, we just don't want it anymore. We can afford with other priorities but it doesn't excite me as much now. We happily bought a top end XUV700 for my office ride & weekends and got a top end Slavia for my wife. The cars of today in these range provide good amount of safety, ride quality and drive performance.

The itch for me for owing and enjoying a luxury car is not there anymore.

[kushagra452]

I am in my fourth decade and still do not own a car. With increasing financial responsibilities, stagnating income and a volatile job market I might never buy a new car in this life.

[TheAnalogist]

I am 29 years old, and just bought my first car (Kia Seltos HTE(O)) 10 days ago.

I had set out to buy a car under 10 Lakh OTR, but this one @ 11.62 Lakh ticked all the boxes so I spent extra.

My criteria was that the cost of car should be less than my Annual in-hand salary, which it is.

As I saw this thread, I realized that with the numbers people are mentioning, I could have gotten 15-17 lakh car easily without it being a financial problem for me.

And yet, I couldn't do it. It is because of the family background that I grew up in, even taking an EMI was considered taboo. It was drilled in my brain that only buy what you can afford currently. My father was still against me taking an EMI now, but I had to make a purchase and as a salaried person, it was clear that I would never be able to save enough money to purchase a good family 5-seater car outright.

This family background plays a very crucial role in my opinion. My friend, who earns a bit less than me, has bought a Merc on EMI, because his Significant Other earns and he has no other obligations. On the other hand, I have my own obligations, my Significant Other is not working, and my parents are also dependent on me. All these factors play a crucial role.

So even though a person's EMI might be 10-15% of your monthly in-hand salary (mine is ~13%), it could still be a tough balancing act for that person financially.