[Gansan]

Originally Posted by Latheesh

If I am selling my car, I'll never sell it to close relative/friend/associate. I do not want someone disturbing me often for some minor issues!!

I will very clearly take it on "as is where is basis". I just need the assurance it is in perfect condition at that point of time and has not been abused/tampered with. I am old fashioned and attach more importance to the promise of a spoken word than a written guarantee!The same will apply when I am selling my bike/car. I would like to add with due modesty here that there are guys in my circle who would not mind a premium to buy a vehicle from me!

If you sell to used car dealers, will you get a good price?

[n.devdath]

Just one more line of thought to this. A well priced good used car seldom stays in the market for long.
Most people who buy used cars are either decently equipped with the knowledge or the sources/links/people required to handle the situation and choose one.

So, buying a used car is certainly a viable, and cost effective option today in my opinion.

[Devil on Wheels]

Originally Posted by n.devdath

A well priced good used car seldom stays in the market for long.

Lots of companies these days offer cars as part of the flexible benefit plan to its employees. And in certain cases these employees leave the organisation after surrendering the car. In most cases these cars are just 2 to 12 months old and since these cars are generally offered to the more senior people in the organisation, the cars are very well looked after and in emacculate condition.

These forfieted cars are then offered to all the employees of the organisation in the form of an auction at unbelievable prices. Be in touch with the HR and Finance guys in your organisation, if you can be patient you might land the best used car bargain.

Just as an example, at one of my previous organisations I had auctioned off the top-end Scorpio which was just 2.5 months old and driven just 3000 KM at a discount of 2.5 lacs over the purchase cost. I know most of you would go . But the balance was recovered from the previous owner (the ex-employee) and in depreciation and we had no intention of making a profit on selling cars.

[n.devdath]

Originally Posted by Devil on Wheels

I know most of you would go . But the balance was recovered from the previous owner (the ex-employee) and in depreciation and we had no intention of making a profit on selling cars.

Now that I know you DoW, please keep me posted on any such deals that you are aware of.

[Devil on Wheels]

Originally Posted by n.devdath

Now that I know you DoW, please keep me posted on any such deals that you are aware of.

Gone are the days my friend. Now I work for a much smaller company, where there is no company car scheme.

[aseem]

A thought for those advocating second hand car to be the sensible choice given thef fact that car is a depreciating asset. Just a thought that crossed my mind relevant to this thread (devils advocate). How many folks consider second hand furniture and go through classifieds? Or consider a second hand Tommy Hilfiger jacket opposed to a new Wills one?

P.S. I may consider a second hand car myself. But lets be honest, the only reason I would consider it is when I wouid want a Corolla on a Dezire budget. No offense to anyone owning a second hand car, have had one while studying myself.

[bblost]

Clothes no, will not do that.

Furniture yes. Done that and will do it in future as well.
Just an example. I am typing from my desktop, kept on a computer table.
Table purchased second hand for 300 bucks. Similar new one costs about 1000.

I work in a large s/w company. As is the case with most such companies, people come, buy stuff. Get another job and move on. When they move on, they end up selling most of the stuff. This gets advertised on my office internal board. Great bargains for those who don't mind second hand stuff.

Also a lot of good second hand cars. Since you actually know or know someone who knows the seller. You get a great deal as well.

[aargee]

Well, it depends on what I'm buying & how long I intend to keep, I would attribute this as my requirements & planning. Since we live here for over 25+ years, most of the furnitures we bought & will buy will be new; clothes, toys, computers no way used. Obviously, I cannot buy a new RX100/135 OR a CI engined RE OR Qualis & hence obviously I would look for used ones.

[jacs]

Originally Posted by aseem

How many folks consider second hand furniture and go through classifieds? Or consider a second hand Tommy Hilfiger jacket opposed to a new Wills one?

Yes we do purchase used furniture but not many will go for a used apparel.

Originally Posted by bblost

Clothes no, will not do that.
Furniture yes. Done that and will do it in future as well.
Just an example. I am typing from my desktop, kept on a computer table.
Table purchased second hand for 300 bucks. Similar new one costs about 1000.

Really makes sense, i stay in a rented apartment and most of the furniture are used ones which really reduce my loss when i relocate.

[Rigid Rotor]

Originally Posted by rohan_iitr

There are several thumb rules that need to be considered:

1. Cost of car should be 50-75% of your annual income.

2. Select a car which you can buy without loan. You may still take a loan, but you should always be in a position to pre-close your loan any day.

3. Pay at least 25% of the car price as downpayment and hence take loan for not more than 75% of the total on road car price (including accessories).

4. Ensure that car loan EMI plus fuel and maintenance expenses are 15-20% of your monthly take home salary.

5. In case you have more liabilities (sick family member, existing loans, single earner supporting large family), purchase a car in a lower segment as compared to what you would normally purchase if you didn't have those liabilities.

6. Never buy a bigger car assuming that your salary would increase in the future. Buy a car based on current income only.

7. Even if you are buying a second hand car, make sure that you are still not violating rule 1 above (considering market price of brand new car). It may sound tempting to buy a used sedan at the price of a new hatch, but remember that a bigger car would also have higher fuel, spares and service costs (especially because it is a used car)

8. It makes sense to buy a car which has good resale value.

Rohan

Rohan, some extremely sound advice there! Perhaps the best post in this thread!

[Axe77]

Various people have stipulated that the car must not exceed xyz% of the annual salary.

I feel this particular consideration cannot be generalised as the parameters can vary depending on your salary base.

A person earning 7 - 10 lakhs in a year may be justified in spending on a car up to 50% of his annual salary (or may even have to for lack of enough options at a lower budget).

However for someone earning 50 - 60 lakh a year, it may not be suitable to purchase a car costing Rs. 30 lakh.

Originally Posted by rohan_iitr

1. Cost of car should be 50-75% of your annual income.
Rohan

[godhatesmyguts]

I agree with Axe77, but personally feel that the car you buy cannot be determined with an emperical formula of a % of the salary you earn especially for those of us starting out in their careers with salaries less than 8 - 10 lakh per annum and having just one car.

The first car one buys is a necessity and even a person earning 4-5 lakhs in a year may but say a Swift Lxi instead of an alto just because he would need to drive 50 km per day. Then again when you think of your second or even a third car, I feel that your total investment in cars should be about 50% of your annual salary.

[KPS]

My advice would be assume a 3 year loan and considering EMI @ 3100 per lakh rework as to what EMI would be comfortable to you. Hence if you are comfortable with a 12400 EMI you can take a loan of 4 lakhs. Then look at what margin you can put and arrive at your total budget. Once you have a budget look at fitting the right car in that budget. Do not let your heart get the better of you.

Never do the workings with a 5 year loan as most people do and fool themselves by the low EMI. 5 years loan means your principal is hardly repaid in the first 3 years. With so many models in the offing you will be tempted to change your car every 3 years. Secondly 3 years old cars have a better resale value and can be good margin money factor for your next car.

Another advice is never buy a car which is going to discontinued inspite of the huge discounts which may be in offer and fit your budget. You will always loose in the long run due to cost of maintenance and low resale value

Cheers

KPS

[Gansan]

IMO if a person is buying a car out of savings / windfall this kind of thumb rule can't apply. Going by this logic, should a person earning ~ 3 lacs PA not buy a car at all?

[KPS]

Originally Posted by Gansan

Going by this logic, should a person earning ~ 3 lacs PA not buy a car at all?

Frankly no unless he has a back up like his financial strong parents. For a salaried person the monthly income is fixed. If you miss one EMI say due the hospitalization then it is very difficult to pay two EMI's in the next month considering your income is fixed.