[wheelspinner]

Hey BHPians,

I'm at that stage in my career where the dream of owning a luxury car is starting to feel a little less distant, but the reality of EMIs and general life responsibilities is definitely keeping me grounded. Like many others, I'm juggling the desire for a little automotive indulgence with the need for financial prudence.

We've all heard the saying, "owning a luxury car is like raising an elephant." (haathi paalna). The costs, both upfront and ongoing, are significantly higher than your average hatchback. You see folks driving around in humble Altos while probably having enough wealth to own and maintain several supercars, and then you see others stretching themselves thin just to keep up appearances. I'm aiming for a sweet spot in between – a luxury car that enhances my life without emptying my bank account.

So, I'm turning to the collective wisdom of the BHPian community – those who have already taken the plunge into the world of luxury car ownership. I'd love to hear your experiences and insights, particularly on the following:

Financial Planning: How did you approach the financial planning process for buying your luxury car? What were the key considerations you factored in (e.g., depreciation, insurance, maintenance)?

Income Threshold: What would you consider a comfortable income level to comfortably own and maintain a luxury car in India? (This is, of course, subjective and depends on lifestyle, but a ballpark figure would be helpful).

Career/Business Strategy: What do you do for a living? (Feel free to be vague if you prefer). What career moves or business strategies helped you reach a point where luxury car ownership was attainable?

General Advice: What's your overall advice to younger professionals who are working hard and aspiring to own a luxury car someday? Are there any common pitfalls to avoid? Should they even be considering it at this stage of their lives?

I understand this is a personal topic, but I believe your shared experiences can provide invaluable guidance to those of us still on the journey. Your insights could potentially make a huge difference in how we approach our financial goals and automotive aspirations.

Looking forward to hearing your perspectives!

Cheers,
wheelspinner

[ObsessedByFIAT]

Just yesterday night I was watching a video by Ankur Warikoo on a similar topic. Which car can you afford? Might help in some ways.

https://youtu.be/ivE4uOS0jzQ?si=LyUQxLcGISoo_lTV

[GTO]

Originally Posted by wheelspinner

Financial Planning: How did you approach the financial planning process for buying your luxury car? What were the key considerations you factored in (e.g., depreciation, insurance, maintenance)?

- Never, ever overspend or over-stretch. Enjoy your cars, but spend on them well within your means. When I could afford a Mercedes, I bought a City. When I could afford a BMW, I bought a Civic. When I could afford a new S-Class, I bought a used 5-Series.

Luxury car EMIs should NEVER affect your lifestyle (the way you live, the way your house is run, education, shopping, entertainment, holidays). Give me a "loaded" lifestyle over a "loaded" car any which day. A luxury car is the ultimate discretionary purchase and trust me, I've had the best times of my life (whether at the age of 21 or 47) in a 4-lakh rupee Jeep and 7-lakh rupee City Vtec as much as I have in a 530d or C220d or an M5. For petrolheads, the car we own is everything, but that doesn't mean we should only find pleasure in fast luxury cars. I love my 20-lakh rupee Thar as much as the BMW. In the recent past, I've truly enjoyed cars like the C3 Turbo, Curvv EV and so on. My best road-trips were in the Safari Facelift, 5-door Gurkha and Thar Roxx (admittedly, the recent fun one was in a Range Rover).

There is no such rule that the more money you'll spend on a car, the more fun you'll have with it.

- Luxury cars provide one with a lot of driving pleasure, pride of ownership & admiration of the build, interior quality etc. They indeed are a class apart. On the other hand, when you own a luxury car in India, you officially become part of the "rip off" club. Everything is expensive! Big, fast 6-cylinder sedans & SUVs require new tyres costing Rs 70,000 every 20,000 - 25,000 km. Headlights cost 50k in the aftermarket and 1-lakh at the dealer. Once your E-Class or 5-Series is out of warranty coverage, you will be spending anywhere between 1 - 2 lakhs on it every year.

- I prefer buying pre-owned luxury cars only as their depreciation falls off a cliff at the 3 year mark, and I have frequently seen "almost new" used cars for 50% of the MRP. These cars also age very well & slowly. Many of us BHPians own 8 - 10 year old German cars that still drive fantastic. Getting a 3 - 5 year old luxury car that's well maintained and with the km reading <40,000 or 50,000 km is ideal.

Income Threshold: What would you consider a comfortable income level to comfortably own and maintain a luxury car in India? (This is, of course, subjective and depends on lifestyle, but a ballpark figure would be helpful).

Call me conservative, but I've never spent over 10% of my earnings on cars.

Career/Business Strategy: What do you do for a living? (Feel free to be vague if you prefer). What career moves or business strategies helped you reach a point where luxury car ownership was attainable?

Businessman. Work hard but also work smart. Know where you can make money, know where to cut your losses. Spend your time wisely. Have the best people around you.

Have fun everyday (post-work) to sharpen the knives for the next day.

General Advice: What's your overall advice to younger professionals who are working hard and aspiring to own a luxury car someday? Are there any common pitfalls to avoid? Should they even be considering it at this stage of their lives?

In your 20s or early 30s? Buy a fast / fun / all-rounded 20 - 30 lakh rupee car. There are some truly fantastic choices available today.

But yes, once you own a luxury car, you'll never look back. So work hard, manage your finances well, and buy a luxury car once you can comfortably afford it

[wheelspinner]

Originally Posted by GTO

-
Call me conservative, but I've never spent over 10% of my earnings on cars.

Thanks. Is it a bad idea to blow profits from the stock market all at once on a luxury car? Assuming that money was never there to begin with. It was over and above earnings.

Did you mean 10% of yearly income or, is it fine to buy a car worth 10% of your savings/assets?

I am torn between used and new. Presently, I think I can afford a used 320D. Because, many people are warning me about used luxury car horror stories about how many dealers at places like Delhi scam them. On the other hand, if I want new I have to wait some more years.

How do you find good used luxury cars?

[Axe77]

If you have to think about whether or not to purchase a luxury car very very carefully, it’s likely premature and ill advised.

I like what Ankur’s video above said (saw a few snippets of it) and also agree with most of what GTO said above.

I have bought luxury cars outright as well as on loan for different reasons. Personally, I bought my first luxury car (BMW 3GT) at age 38 or so, without a loan. I had just bought my current house back then on a loan just about a year or so prior but at that time didn’t want yet another loan for a car.

Its only in the last few years, (Meridian 2022; GLC 2024 and 1300GS 2025) that I have taken a little bit of loan for these vehicles) but that is mostly because I can get some tax benefit on the interest paid on vehicle loans and for liquidity and investment management. Given my age, I have limited these loan tenors to 3 years instead of the more common 4-5 years. I hate the idea of these 7 year loans etc for something like a car. If you genuinely require such a long tenor to be able to fund the purchase, you should likely downgrade the ticket size.

A few general pointers on luxury car ownership IMHO:

• They should only be made basis a solid financial bedrock. They are amongst the last lines of splurging. I always say, stretch a little more than you can afford if buying a home and buy a little lower than you can afford when buying a car.
• Any extraordinary expense on the vehicle (not inconceivable with these high end cars) should not upset your finances or cause you to unduly sweat.
• Early years of earning should be heavily biased towards prudent investments as they will reap you rewards via compounding in later years.
• If anything turns for the unexpected (job loss, decision to stop earning, any similar change of circumstance), you should have enough liquid investments to be able to simply cut a cheque and retire the loan or continue servicing the EMIs without it compromising your lifestyle on other essentials.
• Vehicles should not comprise more than 10% of your net worth if you are younger (say sub 40) and not more than 5% of your net worth if you’re above 40. In saying 5 or 10%, I mean the MRP of the car not the down payment you’re making.
• Even if you are an enthusiast there are enough and more ways to enjoy a great vehicle without breaking the bank. There can be great enthusiast cars that can be had at fantastic prices - a VW Polo GT TSI, a Thar, a Virtus .. and so many others. Sure none of these are an M340i or a Defender or a Mini Cooper but they can provide plenty fun in their own right. The occasional experience of a German can be had via rentals either here or abroad. You don’t necessarily need to plonk permanent big money into one if you’re not ready for it yet.

Originally Posted by wheelspinner

Is it a bad idea to blow profits from the stock market all at once on a luxury car? Assuming that money was never there to begin with. It was over and above earnings.

What kind of a question is that?? Yes, that is a bad idea! Are these profits someone else’s money? Your net worth is a function of the money you earn and the growth in that money via any investment avenues - whether FD or stock market or real estate or whatever else. If you have heavy stock market loss in the year following the car purchase will the dealer buy back your car and return your money? Will your employer increase your pay to make good your stock market losses? The financial metrics of whether or not one can afford the luxury car should have nothing to do with source of funds - it has to do with “disposable funds”.

[wheelspinner]

Originally Posted by Axe77

What kind of a question is that?? Yes, that is a bad idea! Are these profits someone else’s money? Your net worth is a function of the money you earn and the growth in that money via any investment avenues - whether FD or stock market or real estate or whatever else. If you have heavy stock market loss in the year following the car purchase will the dealer buy back your car and return your money? Will your employer increase your pay to make good your stock market losses? The financial metrics of whether or not one can afford the luxury car should have nothing to do with source of funds - it has to do with “disposable funds”.

Yes. The funds were more or less in high risk stocks for my short term goals. Perhaps, I should have clarified that I had considered the money gone the moment I put into those stocks (mostly low cap) as it is a high risk play. Hence, you can consider it to be disposable to an extent (the capital). It's part of passive income stream that I don't rely on, and doesn't affect my financial standing in any significant way. But, since I haven't taken profits on some of them and they already started reducing in value I am tempted to just take profits to get a feeling of achievement before inflation eats into my gains, or there is a dip in the stock value. I don't have any further plan to invest that money right now.

[Axe77]

Originally Posted by wheelspinner

Yes. The funds were more or less in high risk stocks for my short term goals. I had considered the money gone the moment I put into those stocks (mostly low cap). So I consider it disposable. It's part of passive income stream that I don't rely on.

In that case you’re the best and only judge of what to do with it.

You took a risky investment, wrote it off with the intention of using it towards short term goals (presumably a luxury car purchase being one such goal). If this was the goal, and the investments paid off, decide whatever you had intended to do with the funds.

[Rajeevraj]

Originally Posted by wheelspinner

Hey BHPians,

I'm at that stage in my career where the dream of owning a luxury car is starting to feel a little less distant, but the reality of EMIs and general life responsibilities is definitely keeping me grounded. Like many others, I'm juggling the desire for a little automotive indulgence with the need for financial prudence.

I am probably in the same(or similar boat). Has always been a dream to own a luxury car and probably in a situation where a pre-owned example is within reach. I am salaried and in the IT Field. So considering the uncertainties the future holds with respect career, job security, living expenses, healthcare etc, I am trying very hard to make sure the financial prudence part keeps winning over the thought for an automotive indulgence. Any 20-25L car today pretty much does 90% of what you would expect from a car. So a luxury car is for that last 10% + what the heart wants.

I am holding myself to the rule that if I am purchasing any depreciating asset (example a phone or a laptop or any gadget), I will do it only if the money spent makes no difference to my savings, lifestyle, other commitments etc- whether monthly or yearly. I do intend to buy that pre-owned luxury car when I can apply the above rule for the car purchase. Based on your explanation, you maybe at this stage and if so, why not?

[wheelspinner]

Originally Posted by Rajeevraj

I am holding myself to the rule that if I am purchasing any depreciating asset (example a phone or a laptop or any gadget), I will do it only if the money spent makes no difference to my savings, lifestyle, other commitments etc- whether monthly or yearly. I do intend to buy that pre-owned luxury car when I can apply the above rule for the car purchase. Based on your explanation, you maybe at this stage and if so, why not?

I have saved up a bit for the car and other things. But then I realised that maintenance and upkeep is going to put strain on my wallets. Like someone said, only a headlight costs a lakh. If I lose my job or, face some other unfortunate situation, it would become a burden. Maybe I am not rich enough. Thinking further, it is way higher proportionate to my earnings. So I have to first find a way to increase my earnings and passive income to match up to that.

Only fear is if I suddenly get laid off. I don't have sufficient emergency funds to keep up with EMIs and my real estate is comparatively illiquid (difficult to find a quick buyer, or do fire sale at low price). I don't even have my own independent house yet, I mostly own land. I do have a joint family house but with only one parking. Also, I don't have covered parking where I live, and still park beside the roads.

Further down the line, I have another dream to launch my own startup. If I bootstrap it, I could need some funds. There is also the possibility to move abroad soon. Deeply thinking all these aspects makes me doubt if the ownership will be fulfilling in the long run.

The other option is to just YOLO (You Only Live Once) and buy one like many of my friends suggested I have done this for a few decisions in life, but maybe not this time.

[It's Magic]

Originally Posted by wheelspinner

I realised that maintenance and upkeep is going to put strain on my wallets. Like someone said, only a headlight costs a lakh.

I think you first need to ask yourself a question: why do you need to own a luxury car? It could just be your passion.

Do you have any luxury car in mind that you have always wanted to own? If yes, then most likely you want to purchase that car but just want to check if it's something you can afford. (Apologies if I misread your post)

In my opinion, luxury cars will require you to spend some money every now and then. Additionally, you need to be extra cautious while driving around on our Indian roads. I have seen someone purchase a BMW just because he was crazy about that car, and now he enjoys driving it. Of course, it does put some additional burden on his pocket, but he seems to be fine with it.

Originally Posted by GTO

- Never, ever overspend or over-stretch. Enjoy your cars, but spend on them well within your means.

Originally Posted by Axe77

Any extraordinary expense on the vehicle (not inconceivable with these high end cars) should not upset your finances or cause you to unduly sweat.

In my opinion, you have already received some amazing advice from other BHPians and I would recommend thinking over it.

[Vmk1950]

Liquidating your stocks or closing your Fixed deposit to buy a car of your choice is a bad idea. Instead one should consider taking a loan through banks. Many banks offer loans for cars up to 80% of its value payable during the next eight years. (90-100 EMIs) with no guarantor.

So evaluate which car is best suited for you. If your usage is not much and about 2000 kms a month (I covered 21,000 kms in ten years with my Honda city) you can buy a good used car of five or six years old! You can get minimally run cars in good condition for half of the new car price. You may not have any service issues in such cars. You will also end up paying less for the comprehensive insurance. But make sure that the car is from first user preferably from a professionals like a doctor and well maintained with no accident records.

When I wanted to change my ten year old Honda city (it was in excellent condition) I could not go for a similar segment car since the over all cost became quite high and did not want to touch my FDs, I decided to go for a smaller SUV with AMT. I bought a Tata Nexon AMT by utilising Rs.4L received through sale of my old car and balance through my savings. In eight months I have run just 1900 kms that too with three trips of Chennai Bengaluru!

I now realise I could have easily bought a good used car (many five - six yrs old cars come with single owner usage and with sub 20 k kms run) at half the cost of a new car and substantially reduced Insurance cost.

If you are a business man and money is not an issue then go for a car of your choice. Like a Merc or BMW or a Audi. It is a great fun to drive such cars. Your company can also get tax benefits on account of depreciation For next five years (car should be bought in company’s name.)

[wheelspinner]

Originally Posted by It's Magic

I think you first need to ask yourself a question: why do you need to own a luxury car? It could just be your passion.

A rear wheel drive BMW. I specifically want an RWD sedan, that is fast, and fun for weekend drives. I have my eyes on the BMWs since a long time

Considering the 320D series. Something like this is affordable: https://cars.co.in/used-luxury-cars/...-1-detail-page

[ajmat]

Originally Posted by wheelspinner

A rear wheel drive BMW. I specifically want an RWD sedan, that is fast, and fun for weekend drives. I have my eyes on the BMWs since a long time

Considering the 320D series. Something like this is affordable: https://cars.co.in/used-luxury-cars/...-1-detail-page

You need to balance the capital and running costs

My Car History

I stretched to buy a Honda City Vtec - I knew I could since it would be cheap to run. However, I was on a knife-edge . I sold it for 60% of its value after 5 years

Skoda Octavia VRS - Not much of a stretch but the running costs were high and resale was appalling after 3 years. Financially, it was not that wise but the peace of mind in cutting my losses was worth it

VW Jetta- another stretch with an EMI but I decided this would be a 10 year ownership period- I kept it for 10 years and it never let me down, nor has it let the next owner down. Got 40% of its original value. I only sold it as I wanted an automatic and got bored of the spartan interiors

Audi Q3 - cash down - Spent a little on maintenance but it was utterly reliable. Sold it since the resale was attractive (sold for 2 L less) and I wanted to buy some thing indulgent. I had considered stretching out but I did not and spent those funds on reinvestments and a no holds renovation of my house.

The next car, a windfall meant that I could and it was YOLO. I set my heart high but the head took over. I will write about this soon.

Some Rules

1. Food, House, Kids Education, Parent health come first
2. Be in a position to be able to walk out of a bad work situation
3. Listen to your heart, act with your head, or your better half's head!
4. Do not be emotional, if something is not right about something you own or want to buy - walk
5. Nothing is for ever
6. Write down what you need in a car - style, boot, running cost, fuel cost, etc. In my case, fuel cost was not the criteria. More on my experience soon

[SithDefender]

Originally Posted by GTO

Luxury car EMIs should NEVER affect your lifestyle (the way you live, the way your house is run, education, shopping, entertainment, holidays). Give me a "loaded" lifestyle over a "loaded" car any which day.

Truer words have never been spoken! I have personally seen people buy dream cars and then get gloomy and upset because they cant afford a new holiday or a dream gadget anymore. With even C segment car prices going through the roof, it is prudential to keep a check on car dreams while also considering that other lifestyle prices are also going up every day.

Originally Posted by Axe77

I always say, stretch a little more than you can afford if buying a home and buy a little lower than you can afford when buying a car.

Well said! A house is often a lifetime investment, unlike a car. I feel the points that GTO and you mentioned are applicable not just to luxury cars, but even C or D segment choices.

[lemedico]

Whilst I agree with all the other comments on this thread, I don't see anyone recommending what I occasionally do.
Drive my rich friend's cars! They are close mates, collectively own a vast selection of cars and one could satisfy the occasional itch to look posh, or drive fast (eg at BIC) at their expense!
All this while I remain debt and liability free.