[viper33]

Hello TeamBHP community, Hope all of you are doing great. I am just writing this fairly long post to gather your opinions.

1. Financial advice
2. Whether to buy a new car or continue with the Honda BR-V?
3. Which car to buy?

I was born in a humble family (humble is a small word, but a poor family) my father was a carpenter and worked as a watchman and our monthly income was Rs.2000 per month before I started earning. I have mostly studied in Govt schools and colleges with my parents putting in as much as they can and with the help of my relatives.

Currently, I am 34 years old and I work with Microsoft as Sr.Product Manager. I earn approx 45L post-tax.

We recently bought a house worth 1.5Cr, a 3BHK villa in Hyderabad. This is the first and only property we own right now. The primary reason to choose a villa over an apartment is that an Apartment might lose value over a period of time and selling would be difficult. With a villa, the chances of appreciation are higher and the probability of selling it, incase you know life is unpredictable, is higher.

Apart from the house, Approx. 20L in savings

Here is my conundrum, currently I am on a mission mode to close the home loan and if there are no surprises in life, I would expect it to close in the next 5 to 6 years. As I am paying high EMI with less tenure, I do not have any money for investments. As the house loan interest is cheaper, the question is whether should I rush closing the loan or continue to pay the EMI and invest the amount as the probability of fetching higher returns is higher. Please share your thoughts on your experience considering my background.

Now, let's come to the car, I am an auto enthusiast, and I always help my friends and family in choosing their perfect ride. I enjoy driving and I swear by it. Till now, based on my background, haven’t dared to buy a new car of my choice.

My first ride was a 10-year-old A-star which I bought for 2L and sold for 1.85L after driving it for 2 years. Then I bought a pre-owned Sunny automatic. My mother has her legs operated on and can not fold her legs completely, so I needed a car with a lot of leg room and chose Sunny. I bought it for 3L and sold it for 2.85L after driving it for 2 years.

My sister’s family is like the same family and we miss her always whenever we go anywhere, so I needed a 7 seater. Currently, I drive a pre-owned Honda BR-V. I bought it with the assumption that Honda is reliable, but my current car gives one or the other trouble now and then, and spent quite a good amount in servicing that. In addition to that, the ride was so stiff, my mother complained every day.

Now, I am planning to buy a new car and that too a 7 seater. My financial mind says that wait for 2 more years, reduce the home loan burden, and get a car, but to be honest, every time I drive my current car, I feel why am I driving this and never enjoyed it as well. Please help me with which choice to make.

Cars I am considering: Just I have three prerequisites, it should be safe, it should be fun, and an automatic

Maruti Suzuki Ertiga: 3-star and lethargic engine, so ruling out.

Kia Carens 1.5 Turbo: Super fun with it powerful turbo petrol engine, again a 3 star rated car, when I am spending 20L which is too huge for me, I don’t want to settle for an unsafe car.

Mahidra Scorpio-N Z6 Automatic: Safe and Fun. But unusable 3rd row. If I pick the petrol, I don’t think I can handle the low mileage. If I pick diesel, I am not sure about the reliability/maintenance of the BS6 diesel engine, and anyway, I don’t drive enough to need a diesel.

Mahindra XUV700: The lowest trim with 7 seats is AX5 diesel and it costs approx 26L in Hyderabad, petrol 7 seater is way beyond my budget.

Tata Safari: Waiting for the petrol which is expected to launch in 2024, I love the design and I like the dynamics of the current car, but I want peace and I am not sure whether I get it with Safari with so many niggles reported.

Invicto and Hycross: Invicto's lower variant is 31L on the road Hyderabad and Hycross VX is approx 32L on road, I don’t think I can spend such a big amount.

So I don’t know which one to pick either. Share your thoughts. Thanks in advance.

[sunilch]

Originally Posted by viper33

1. Financial advice
2. Whether to buy a new car or continue with the Honda BR-V?
3. Which car to buy?

Hello viper33,

You have achieved quite a bit in life and I wish I was in your place. Not that I am doing bad from where we/family started, but being a human I wish I was in your situation

1) Can't advice you much but do sell the BR-V if you and family are not happy with it. I own a MT BR-V and love every bit of the car and I am surprised with your observations. But if your primary requirements are not satisfied with it, better to sell ASAP.

2) Regarding Home Loan, it appears you have chosen a lesser tenure and hence a higher EMI. If that is not the case, my comments are pointless and you can ignore. Otherwise, I suggest you change the tenure to maximum possible/available with least EMI possible. Reasons are simple:

• Allows for more in-hand and hence better options to invest the surplus money
• Pre-payment is free in India and you can pre-pay the loan partly every few months with your surplus savings. When you pre-pay, opt for tenure reduction at that time. Each time you pre-pay, your tenure will go down substantially during initial years. Do this for the first 3-5 years of your loan tenure. Once your outstanding balance reaches are comfortable level, leave the Home loan as is to enjoy the lower borrowing cost and tax benefits. Not many benefits are available these days anyways.
• Extra money in hand is helpful always and can be put to best use based on available opportunity.

3) Get a car (pre-owned or new based on your preference) that is comfortable for the family. Appears that you want to keep One family car and not multiple. In that case but whatever your family enjoys more than you. From personal experience, lesser known brands may offer a wonderful product and experience. So TD every 7-seater out there and then pick what your family loves overall.

Check if a used Petrol Innova Crysta is available in the used market in HYD. It may have low FE, but would be a good comfortable and safe car for sure.

[Axe77]

First of all, what a delight to read your post - my utmost respect for all your achievements so far and best wishes for the road forward.

Originally Posted by viper33

Here is my conundrum, currently I am on a mission mode to close the home loan and if there are no surprises in life, I would expect it to close in the next 5 to 6 years. As I am paying high EMI with less tenure, I do not have any money for investments. As the house loan interest is cheaper, the question is whether should I rush closing the loan or continue to pay the EMI and invest the amount as the probability of fetching higher returns is higher. Please share your thoughts on your experience considering my background.

This rings close to my heart as the current house that I live in, I had also paid off the housing loan on a very accelerated timeline - at the expense of throttling my savings based investments for a few years in between. Please don’t make the same mistake. In hindsight, I wish I had invested a little more in some of those years even if it had delayed my foreclosing my loan a few years later. In balance, it would have been a financially wiser outcome.

I would say try and see if you can elongate the tenure such that your monthly EMI reduces. Let the surplus amount generated per month facilitate some periodic equity investments, which you need not touch for a long time. Please don’t underestimate the power of compounding over a 8 - 12 year period. Over this period, strike a balance between using surplus funds towards prepaying amounts of your loan to reduce the principal liability as well as towards boosting your periodic investments.

This will allow you to wind down the loan in a sensible horizon (you’re still only 34) as well as allow you to create a sizeable savings corpus.

Cars I am considering: Just I have three prerequisites, it should be safe, it should be fun, and an automatic

From the list you’ve mentioned, I would suggest the Carens diesel A/T or DCT - principally because it’ll be nice to drive, have excellent ride quality thanks to its 16” wheels and has an incredibly usable third row (relatively speaking).

An even better choice might be trying to find a good used Crysta. It should be low cost to maintain, reliable, and again very comfortable for your intended use case. I don’t think there’s any harm in going for a car now even if it means pushing out your accelerated loan amortization by a little bit. You’ve clearly been very disciplined with your savings as well as asset creation. If you are an enthusiast and you hate being in the current car, by all means change it with something sensible that doesn’t break the bank for you.

[Raghu M]

Sir, I am in my late 30s and work as a VP ops for a US based firm. I can share some insights into the financial planning part. Allow me to be a little open with the financial part. While I cannot comment on your previous expenses (read obligations), I can see that your hurry in closing the housing loan is not exactly the right decision. I think that is a common misconception that a housing loan has to be closed early and we can have some peace of mind.

1. Lower tenure of housing loans (with low interests) takes away the advantage of investing aggressively in the markets (read mutual funds, shares, real estate). Your current cash should be invested while the markets are beginning to show dominance. The next 15 years will see the Indian markets mostly on the bullish side. Your money will start compounding after 6 to 8 years and I am sure you understand the power it has

2. In case you want to upgrade to a bigger house in the future (I hope you do) it will be easy to sell the property (loan transfer is a matter of couple of days) and move on. Not that closing a loan would make it difficult but the documentation (legal opinion, valuation and EC) all take time and a lot of due diligence is needed. A property under loan is pretty safe and has protection from various risks. You are even insured while the loan is running, it gives your family great security and legal ownership on the property in case something unexpected happens

3. You have a solid 15 years from now to invest so that you can retire before 50. So, the plan should be to invest all the extra cash rather than focus on closing the loan. The loan is secure and gives you ample time to close. If I were you, I would negotiate a longer tenure with my bank. Housing loans have the lowest interest rates, hence that is always a safe bet

4. The 20L savings that you have currently should have been a bit more (my honest opinion). But since you have bought a big property, that is understandable. You should ideally be having a corpus of at least 50L given your financial standing. Your portfolio should be 60% in equity and the rest in bonds/debt or even real estate. Talking purely in terms of financial gains, gold is also not a great investment when compared to markets. They beat every other instrument in the long run

5. Your emergency fund should take care of you and your family for at least 18 months in case of a job loss or any unforeseen circumstances. Do you have that?

6. The decision to go for a 7 seater while your BRV is not satisfactory is totally fine. I guess all your shortlists are awesome vehicles but be wise on the EMI. A car is a depreciating asset and a short term loan wouldn't hurt. Any cash that you invest on it has low ROI, so try to move that to a safer investment with the additional cash you have

This is purely from my experience and it is beginning to work slowly. I have a goal to retire by 2030 (or at least feel secure by then). Am sure you have your goals, so the above points are only for sharing insights. Good luck!

[jono213]

Originally Posted by viper33

Hello TeamBHP community, Hope all of you are doing great. I am just writing this fairly long post to gather your opinions.

1. Financial advice
2. Whether to buy a new car or continue with the Honda BR-V?
3. Which car to buy?

Kia Carens 1.5 Turbo: Super fun with it powerful turbo petrol engine, again a 3 star rated car, when I am spending 20L which is too huge for me, I don’t want to settle for an unsafe car

Hi, I don't think I can contribute much on financial advice but the cars part, I might have a few observations that might help.

2) This depends completely on you, I personally don't think taking out another loan right now for a new car would not be the ideal choice, taking into consideration that you want to close the home loan as soon as possible.

I'm very surprised about your observations on the BR-V, I think the platform is very competent but to each his own.

3) The Kia Carens is the only competent mpv south of ~20 lakhs on sale today. I personally wouldn't classify it as an unsafe car, just because a car isn't 5 star rated, does not mean it's unsafe.

All power to you man, great story, and I hope you make your decision.
Cheers!

[buzzy_boy]

Deepest respect for your achievements so far. I'm in the same age group, own a house of similar value, and work in IT. So, my honest advice to you would be the following.

1. Don't buy a car now. The depreciation will be higher than the cost of repairing your BRV.
2. Start planning for your retirement. What corpus would you need if you were forced out of work at 42 years of age?
3. Don't know if you have/planning to have children. If so, start planning for their education.
4. Plan for your healthcare expenditure.

If you have a discretionary budget after all these, buy a car.

[Shreyans_Jain]

While I will refrain from commenting on on the financial aspect of things, you are barking up the wrong tree as far as your car search is concerned.

What you need is a Toyota. Nothing else. Look for a pre owned Crysta or a new base (non hybrid) HyCross petrol. There is no case to justify going for the hybrid unless you drive for 20k km every year or you absolutely need the bells and whistles (which you certainly don’t). A sensible man like you needs a 100% sensible family car.

[FAIAAA]

Hi. Thanks for sharing your context and congratulations on the progress made so far.
Financial advice - As others have opined, it's better to go for a longer term home loan ( you pay home loan rate of 6-7% net of tax and save another 2-3% on rent. Plus 3-5% capital appreciation. That's an opportunity cost of 10-15%. Good mutual funds ( large / flexi cap) should easily beat that over 10-15 years ( last 5 years they have returned compounded rates of 25-40%. Past record doesn't guarantee future performance but you get the drift ). I get the emotional appeal of zero debt but would suggest you learn to live with optimal debt my friend. ( Ideally I wouldn't have purchased a house of I were you, focusing instead on growing my corpus but I get the emotional appeal of owning a house and it's now already done)
2. Your savings are low. A house is an asset but you cannot liquidate partially. Say you need 50 lacs, you cannot sell 1/3rd of it. And if ever you do, it's not liquid, will take time to sell.
Consult a financial advisor, there is also a lot of educational stuff online. Divert most of your reduced EMIs to MF investments. Take advantage of the current bill run which should continue next few years.
3. Also hope you have life / health insurance.

Car advice - Fellow BRV owner here. Not sure yours is a manual or automatic and what maintenance issues you are facing. Regarding ride, check your Tyre quality/age ( old rubber gets hard) and pressure else suspension. We find the BRV offering good ride and handling balance ( moved from a Fortuner to BRV).
Unless it's absolutely critical, my suggestion will be invest and grow your corpus and use the returns to buy / upgrade end of 2024/next year.
As and when you do, ask yourself, do you really need-
1. a big car? ( Xuv 700, Scorpio N with limited 3rd row space go out)
2. Hybrid, unless you do serious mileage every year (30k kms) ( Hycross goes out)
New Carens and pre owned Crysta can be considered. ( ruled out XL6/Ertiga due to your performance concerns). You can go with mid variant of Carens.
3. 7 seats? How many times have you used the 3rd row of Brv?
If not, Creta, Elevate AT. ( Grand Vitara / Hyryder ruled out to weak performance /same engine (.
4. If form factor can be overlooked, then Honda City / Verna will be more fun and cheaper. Base V AT of City is fairly loaded. And if you don't like the 1.5 Honda IVTEC / prefer the Carens turbo petrol, then consider the Verna Turbo petrol automatic.
For your use case, would suggest you stick to Japanese / Korean options

[viper33]

Thank you so much for your valuable advice. Honestly, your opinions from your experiences have changed my perspective on how I should look at things. Thanks again for the TeamBHP family.

Based on your inputs, I would be reconsidering my plan to pre-close my loan asap and consider restarting SIP. I have been disciplined at my SIP in the past and now I will restart them again in a couple of months.

Regarding my BR-V, I have read a lot of ownership reviews and that is why I have chosen BR-V with a plan to keep it for the next few years. But, I think issues are specific to my unit or how the previous owner maintained it. It has visited the service centre 5 times in the last 18 months for various issues.

As many of you suggested, I am gravitating towards, mid variants of the Carens or Hycross Petrol only model.

[vaibhavyagnik]

I can't advice you on which car to buy because I have not driven any of the cars you have shortlisted, barring from Kia Karens. I drove the Kia Karens Diesel variant and it already had the check engine light because it needed DPF regen. If you are in the city, it is highly likely that you will need more frequent DPF regens.

Coming to Home loan: You may be paying 8.6-8.5% interest rate. You can deduct Interest paid on home loan from your total taxable income, so the effective home loan rate comes down even lower. If you started investing the amount that you are currently using to repay the loan at a faster amount, you will earn atleast 12% returns over a longer period. So that is a 3.5% saving for you every year. So do not be in a hurry to repay home loan.

Regarding repairing the Honda BR-V: Are the repairs bank breaking and leaving you stranded in the middle of the night and middle of nowhere, then you should think of buying a new car. If they are small niggles, like a oil drip or dents or bulbs, then it will be wiser to retain the car, rather than selling it off. After all, a car is a depreciating asset a new car will depreciate even faster.

[Turbohead]

I'd request OP to be more specific about the issues faced with the BRV.

Originally Posted by FAIAAA

Car advice - Fellow BRV owner here. Not sure yours is a manual or automatic and what maintenance issues you are facing. Regarding ride, check your Tyre quality/age ( old rubber gets hard) and pressure else suspension. We find the BRV offering good ride and handling balance ( moved from a Fortuner to BRV).

+1
I've been in both BRV and Seltos and there is no way the BRV is stiffer.

Please check the tire. If it's very old, please change it. Else check the tire pressure and maybe stick to a level as suggested by other BHPians. Also get the suspension fixed if it's not in good shape. These two changes alone will enhance the feel of the car. But again, it depends on the overall condition of the car - if it was already badly maintained in the first place, you might be better off moving to something else. Please get it checked by an independent and well reputed FNG anyway.

Congrats on your success! You've pulled your future generations out of a rabbit hole!

[GoBabyGo]

Hi Viper33 - We all should be proud of your achievements in life. Our big congratulations to your parents too.

I suggest you to see your future income for atleast 5 years (increments, promotions etc.) into considering while making your current vehicle purchase. You have bought a good houses and mostly likely it will remain with you till forever. You may be paying around 1.5 lacs per month EMI for your home loan. While your income grow with time, your life style should also grow with your income. We only live once and in my view it is very important to enjoy whatever we earn. Do some calculations and see if your income will be 1 Cr. tax free when you will be 40 years old.

You can consider diversifying your investment e.g. Voluntary Provident Fund (increase it to 30% or more of your basic which will give you around 8.15% tax free income post retirement), NPS (if your company has this facility, 10% of your basic will be invested into NPS). NPS is kind of SIP. I am not into shares, equity market so can not suggest on it. There are various calculators available on internet through which you can calculate your investment, probable returns and how much corpus you need to maintain your life style.

Beside this keep some money for your parents holiday into various places they like to e.g. Pilgrims. They deserve everything best in life.

As far as your budget for your new SUV, it should be upto 30 lacs basis your current income & future income prospects. You can easily buy Kia Carens 1.5 Tubo DCT top model and I am confident that it will serve you well for next 5 to 6 years before you come back to Team-BHP again for advice on replacing to a new SUV for upto 75 lacs (I am confident about it considering your current profile, income and future prospects).

All the best for your purchase.

[youknowitbetter]

Hi Viper33 - Thanks for this post. As mentioned by fellow members, what you have achieved and where you are currently in life, it is outstanding! We rarely get to see such success story. Also, really appreciate how transparent you have been in terms of giving the personal background as people rarely share such stuff.

In terms of your queries:

1) Home Loan: Agree with the points mentioned by others, you should got accelerate in repaying it even though the interest rates are low. You should look to invest such funds part in equity and part in debt. The return from the investment should be more than the holding cost. You can also part repay if you feel you have surplus liquidity at any point of time in future. So my extending your loan, you are not closing the option of prepaying (in part of full)

2. Car: In my view, if the choice was purely out of desire, I would have suggested you to wait it out. However, since you mentioned that it's not comfortable, I suggest you to flip it. Also, just from the read of it, you have had pretty good luck with your past 2 pre-owned cars, suggest if you can consider the same again. Start look out and only when you find a good reasonable car, you can flip the existing one and buy it.

[07CR]

Originally Posted by viper33

I was born in a humble family (humble is a small word, but a poor family) my father was a carpenter and worked as a watchman and our monthly income was Rs.2000 per month before I started earning.
.
.
.
Currently, I am 34 years old and I work with Microsoft as Sr.Product Manager. I earn approx 45L post-tax.

Firstly I salute and congratulate you for turning your and family's life around. I am sure it was not easy but definitely feels worth every drop of sweat and blood that might have required for you to achieve this feat.

Originally Posted by viper33

Cars I am considering: Just I have three prerequisites, it should be safe, it should be fun, and an automatic


Kia Carens 1.5 Turbo: Super fun with it powerful turbo petrol engine, again a 3 star rated car, when I am spending 20L which is too huge for me, I don’t want to settle for an unsafe car.

I am no financial expert myself, so won't engage in any advice here.

But coming to cars, how much trouble is the BRV giving you currently? Is it like frequent mechanical issues, which is costing like 10K per month of fixes? Or is it minor irritants, but you are simply bored of the car that is magnifying it a lot! If it's the former, definitely go for a new car, if it's the later, try first checking what is the resale value you are getting. Honda's generally get great resale, but considering BR-V was a market flop, the chances could be lower. Check this and then take a call accordingly.

My dad had a 2013 Amaze diesel which was mechanically perfect, however, it lacked the finesse, thoughtful touches and the premium factor(even for the segment). I can totally understand if it's this same factor that's troubling you.

Coming to the possible replacement, Do not rule out the Carens just because of the 3 star rating. I personally have lot of doubts regarding the GNCAP tested the cars in India, and do not trust them fully. Apart from that, the driver is the most important factor deciding an accident in the real life scenario's. Also do not forget 5 star rated cars suffering dangerous accidents due to mechanical faults! Read more here (Owner loses leg after Mahindra Scorpio-N crashes into barrier due to *alleged* suspension failure)

I am a Sonet iMT Turbo Petrol and Kia Seltos 1.5 Turbo DCT owner. The 1.5 Turbo DCT is super fun and will always keep a wide smile plastered all over your face! While shopping for Seltos, we were equally impressed with Carens, but we simply didn't require a 6-7 seater. Carens with a captain seat layout seems like the perfect bet for you. It also has borrowed many new goodies from Seltos FL like one touch up down for all windows, the fantastic instrument cluster of Seltos and the likes. It's become an even better deal IMO. Do checkout for leftover December batches for some good discounts. All the best!

[noopster]

Hi viper33,

Congratulations on your achievements. You have really earned my respect.

My advice is simple: if you don't like the Honda B-RV for whatever reason, it's unlikely you will like any of the other options you have mentioned. Reason I say this is that the engine and gearbox combo on that car is fantastic. My friend owns one (I think it was called the Mobilio before?) and I really love driving it, especially on the open highway. And it has plenty of space as well, which you may find lacking in some of the cars you are considering.

My advice is: before plonking more money on a car that may or may not satisfy your needs, get an expert mechanic (every city has a good one or two) to check out your car thoroughly and if the fix is within your budget, get it fixed and run it happily into the ground. I have a Vento petrol AT that just turned 13 and is touching the lakh and a half km mark. I've had to do quite a bit of work on it plus routine maintenance but it makes for a brilliant second car and would fetch me peanuts if I sold it. I have similar issues with paying back a home loan that I took on in my 40s so I feel your pain. If you can live with the B-RV for a few more years, do it.

And forgive me for saying this but you may be living well UNDER your means. 45L post-tax is nothing to sneeze at and you can easily afford a bigger house and/or a luxury car at that level of income. No offence intended, it's just that you are truly in the top 0.01% and maybe you can live a little!