[kedar3223]

The takeaway from reading the last few pages of this thread is that people on team bhp seem to be earning in the top 0.5% bracket in the country. For the rest of the people, i guess a 50-75% of annual ctc is the 'conservative choice's and 75-100% is the 'aspirational choice'.

[justwheels]

While economic sense should prevail while making any money decision, I personally feel that off late every decision is being tagged with a mathematical equation, discounting the aspirations and intangibles that an equation cannot capture.

Cars are still an aspiration than just a necessity for a whole lot of people, including me. Mathematically speaking, we all should be driving "Alto" (figuratively) because it serves point A to point B commute. Ofcourse this could be coming from the fact that I probably am not in the top 1% of earning bracket yet.

And to top it up, the way car prices are rising, I don't think I can ever afford the car I dream of with the normal rate of growth of my salary. I pushed myself to buy a car at 17 lacs 3 years back. Today the same car costs upwards of 21 lacs.

I strongly agree its prudent to be sensical and not take rash decisions, especially when it comes to spending on materialistic and depreciating stuff, but it has just become an arduous task to be so thoughtful. Times we live in!

[m8002?]

Originally Posted by justwheels

And to top it up, the way car prices are rising, I don't think I can ever afford the car I dream of with the normal rate of growth of my salary. I pushed myself to buy a car at 17 lacs 3 years back. Today the same car costs upwards of 21 lacs.

Isnt it in line with inflation and salary increments? I am pretty sure someone who was earning 17 lacs 3 years back will be earning 21 lacs now with 7% annual increment each year. So from a purchasing power, things have not changed much. Anything more in increments, the car is relatively cheaper now.


Of course, everyone likes all things to be priced low and only their income to increase

[Flyingdutchman]

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.

I am assuming you are unmarried. I have been in the same boat. Bachelor status provides you the freedom to be little adventurous with financial investments. You already did a substantial purchase in the form of an apartment in Mumbai's prime location.

Spending 82-83% of the earning just on EMIs is alarming, leaves no room for contingency needs. Regarding the savings that you mentioned, Kindly seek advice from financial planner about it. If I were you, I would use those funds towards the home loan as part Payments so that EMI burden will ease a bit.

Hold onto the purchase for now, atleast till you are married. I will be little blunt here, but after surviving life in a metro city for awhile now, I am of the firm opinion that it's ideal to seek a matrimonial prospect with someone who shall contribute financially into the married life ahead.It's always appreciated when it comes to purchases like this. But as I single earner in the family, it is not a financially sound decision to have 82-83% of monthly salary as liabilities.

[V.Narayan]

Originally Posted by StrykerEV05

I'm 27 years old, bought my 1st Car (Nexon EV) around 3.5 years back. 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..

Apologies in advance as I do not wish to be rude. The parts of your post I have culled out strongly indicate you are supported financially by your parents. I can't fathom how else can you expect to expend so much on car EMI over and above your home loan EMI. You car and home loan EMI together is probably in excess of 100% of your take home salary. Something does not add up here.

My advice - enjoy the Nexon for now.

[VWAllstar]

Originally Posted by StrykerEV05

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.

Somehow the maths does not add up. Considering your age and current debts, I would strongly suggest you continue with Nexon EV for another 5/7 years. In these years you will have almost negligible running cost. Focus on part payments of the HL and try to pay off minimum 75% of the loan till you turn 35 years old. Someone in the thread mentioned that the feeling of no debt/EMI is far more surreal than driving/owning any car. I resonate with that feeling. It gives you freedom to spend on other interests like Travelling, Road Trips and most importantly to cater to any unforeseen emergencies. Only a word of caution, EMI debt free feeling is also a trap to convince yourself that you are ready for another EMI, a bigger one this time. The loop will just continue if you give in to that feeling.

[manojrajakrishn]

Originally Posted by StrykerEV05

I'm 27 years old, bought my 1st Car (Nexon EV)
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.

I would humbly advise you to give it considerable thought before deciding.

Give yourself a week or two to determine whether the change is worthwhile. Delaying decisions has caused them to change, in my experience.

I say this based on my experience upgrading two cars in the last four years: it costs money, and a month after the purchase, you'll still feel the old car, and the new one doesn't really make a difference emotionally.

Being debt-free or EMI-free, with a healthy quantity of savings and peace of mind, is the best feeling in the world.

A car lease would be the ideal choice if you still feel like it, as it would have less of an effect on your savings.

[ashis89]

What car @what salary is completely misleading as a yardstick. Several other factors also come into picture such as monthly expenses (rent, school fees, medical), general cost of living in their place of residence, dependents, own house vs. rent, on going EMIs, supplemental income sources and more.

If someone wants to compare then they should use disposable income + savings as the correct yardstick to decide if a particular car purchase is affordable.

[StrykerEV05]

Originally Posted by V.Narayan

Apologies in advance as I do not wish to be rude. The parts of your post I have culled out strongly indicate you are supported financially by your parents. .

No offense taken
My parents do support me occasionally, they've helped me a lot. Most important would be in terms of education loan.

The numbers might seem off for someone my age but let me also give a quick background of education. I've done my B.Tech in Computer Science from an NIT tier college and my MBA (PGDM) from XLRI shortly after. I joined XLRI as a fresher and was amongst the youngest in the batch. I graduated from XLRI Jamshedpur at the age of 23. The best help here is that I didn't have to take an education loan, parents paid.

Now I am almost 4 years into work with a very substantial salary because of the education. In addition to this I have a very normal lifestyle so I was saving around 75% of my salary during my debt free phase.

The 1st debt I took was for the Nexon EV, costed about 14.2 lakh on road in December 2021 with the early bird offer. 50% down-payment and 50% loan. Took the loan because I got it at 7%ROI (I work at a bank, hence preferential loan rates). Was just a 2 year loan, closed it in December 2023.

Jan-July was that 75% saving period. I have also made very handsome gains from the stock market through the IPO rush. I don't do F&O, I'm more of an investor. So in July I was looking at over 50L in Savings and investments. Thought about buying a house in Mumbai, despite many people discouraging me, also saying renting makes more sense, etc. I still made up my mind and bought a house. And post August I am in that 60%+ period of in-hand EMI vs total salary. Even post this I'm able to save about 15-20% of that in-hand salary.

My expenses are very low, i spend hardly 20k a month. One of the best contributor to this is my Nexon EV. I drive for free, because I charge at office 100%. So almost 0 travel cost since the past 2 years in the city, we didn't have a charger at office before that.

Right now the dilemma is because of the company Car Lease. The BE 6 is around 28L on road but considering the tax savings from the Company Car Lease policy (3L net tax saved per year), it would effectively cost me about 13L in 5 years. It's already been 4 years in my current company, I'm not sure about staying for another 5! The CoC Lease break even point is at about 2.5 years. Even that seems a bit like a stretch.

I have about 30L in savings+investments. Can go all cash but that'll bring me to 0 savings and for a few months I will hardly be saving 15% of my take home.

If I go for the Lease I will have Lease+Home Loan EMI taking up 82-83% of my take home. I might have 0 savings for several months and might have to dip into my current savings and investments for a few months.

Right now I don't feel like I can't afford it, it is more like it would be a financially stupid decision. And I don't like taking financially stupid decisions.

Thanks a lot members for putting sense into my head. Will hold on to this car for 2 more years atleast. I love the car even today, my first car, it is very special

[Turbanator]

Originally Posted by StrykerEV05

The BE 6 is around 28L on road but considering the tax savings from the
Right now I don't feel like I can't afford it, it is more like it would be a financially stupid decision.

No harm in getting what heart says as long as it does not pinch the brain

If Nexon is working as intended, add a fun car and retain the Nexon. There are cars which depreciate much less or sometimes, one can sell at higher than cost. BE6 or newer EVs will be a big No irrespective of the tax benefits or the gizmos those have.

Depending on your liking, save for a good sports car (older examples , unfortunately) or an SUV like Fortuner.

[noufal.ps]

Buying a car is never a better decision from financial angle. It's just based on what you want, at what point of your career, and your appetite for taking risks (if you're spending more)

I'll go against the wave here, get the car. I understand a car motivates you across multi dimensions. You could easily double your salary in 4-5 years (rather anyone in IT could do this) which is your BE6 usage period may be, I see you're a PM

[for_cars1]

Originally Posted by kedar3223

The takeaway from reading the last few pages of this thread is that people on team bhp seem to be earning in the top 0.5% bracket in the country. For the rest of the people, i guess a 50-75% of annual ctc is the 'conservative choice's and 75-100% is the 'aspirational choice'.

The way it should be interpreted is: This thread is relevant to salaried folks who make up that 0.5% of the population who are paying effective direct income tax (enough to buy a car).

There is a huge class of people outside the salaried class and outside the direct tax web and earning enough money to easily afford cars.
Since hard cash is accepted only upto the 2L limit, the rest of the car funding is financed through loans and that explains the huge spike in car loan market. (PS: Not saying all are Tax evaders, but there is a significant chunk of folks not accounted for in these earning brackets and formal statistics)

Our car market penetration is not just 0.5% of the population, it is touching 8% of the population If the automobile industry just depended on the visible direct tax paying population, it would just collapse.

Salaried class is just the small visible (and tax abused) tip of the huge iceberg.

[shankar.balan]

Originally Posted by for_cars1

Salaried class is just the small visible (and tax abused) tip of the huge iceberg.

The thread title itself and most of the replies, clearly indicates the main target segment.

Saying this, the business folks are able to take a depreciation benefit on whatever car they buy and all the running and maintenance expenses are also ‘expensable’.

The same goes for Professionals- Doctors, Lawyers,
Independent Consultants and Chartered Accountants.

These are huge plus points from their perspective and this class of buyer constitutes a large chunk.

[deehunk]

Hope my numbers inspire somebody to realize their dreams.

• Spark, CTC 6.25L
  
• Used Accent, CTC 7.5L
  
• Beat, CTC 10L
  
• Rapid, CTC 11L
  
• Duster 85 PS CTC 16L
  
• Ecosport, CTC 16L
  
• WRV, CTC 16.5L
  
• Duster 110 PS, CTC 18L
  
• XUV 500, CTC 22L
  

How I managed this: no credit cards, no unnecessary housing loan burden, and almost zero spending on hotels, resorts, vacations, malls, and movies. I adopted a minimalistic lifestyle in my 30s; this has helped me to a great extent to lead a simple life with at least 20 years in the future. I may not be able to own my dream car, but I have the satisfaction of owning most of the cars I liked once in my life.

[ramki.grandhi]

Originally Posted by justwheels

I personally feel that off late every decision is being tagged with a mathematical equation, discounting the aspirations and intangibles that an equation cannot capture.

You are almost right, and people are talking about only numbers in this thread because, this thread is about numbers i.e. Salary.

Outside this thread, there might be few threads that talk about aspirations and other feelings, discounting money aspects. For example, I remember seeing "What is your dream garage for 1cr?" Or "If money doesn't matter, which car do you want to buy?" etc