A car is much more than a depreciating effort. It is a major part of your road-trip vacations. It becomes a part of your memories.
BHPian dicor recently shared this with other enthusiasts.
Question: What car what salary?
The question should be
What car? What salary? What age? and What is your passion?
Case study 1:
Me being a petrol-head since childhood. I was 23 years old when I had started earning.
- Age 23: I was earning 7 thousand per month when I bought a used hatch at 1.45 lakhs. (2X of my annual salary)
- Age 31: I was earning 8 lakh per annum, I bought a sedan which was 9.5 lakhs on road. (1.2 x of my annual salary)
- Age 35: I was earning 21 lakhs per annum, I bought a big crossover which was 19 lakh on road. (0.9 x of annual salary)
- Age 42: I make 52 lakhs a year, and if I were to buy a car right now, I wouldn’t shell out more than 20 lakhs for it. (0.4 X of my yearly salary)
Despite being a car enthusiast, I’ve begun to appreciate the distinction between assets and liabilities. I now priorities things like my children’s future education, saving money for the care of the elderly, a better home, and yearly vacations.
Case Study 2:
A resident in my building, owns 4 vehicles. He is real estate developer. The cars he owns in a family of 4 are
- A 2010 model Toyota Fortuner
- A 2016 ML 250
- A 2021 Innova Crysta
- A 2021 Santro
Even when I add together the costs of all these automobiles, it still comes to less than 0.1 X of his yearly income.
Case Study 3:
A Thakur sahab of my tehsil (and relative of a member on this forum). Monthly income (unknown), Net woth (few crores). Vehicle he own
- A 6 decade old Willys Jeep.
- MM540 Jeep
- Scorpio-N
- 3 Tractors
According to what I understand, spending power is determined by priorities and interests. not income.
Here’s what BHPian anshumandun had to say on the matter:
I don’t calculate this in terms of net worth and CTC etc. I just see what EMI I can afford easily for 5 years. I keep cars for 8 years minimum so I finish the EMI by end of 5 years and 3 years without emi.
If I were to be extremely financially prudent and buy a car without having to pay EMIs, I would be driving cars that score poorly on safety, experience and driving pleasure. What good that life be for people like us who enjoy driving and riding?
A car is much more than a depreciating effort. It is a major part of your road-trip vacations. It becomes a part of your memories. It takes you on journeys that you remember for a long time. If I look back at my photos with friends with family, there is always a car that took us somewhere. You can’t put a price to that.
Here’s what BHPian na_agrawal had to say on the matter:
Going by this recent posts/discussion on this thread, am I right if I conclude that –
Some of my senior colleagues who are driving a BMW X1 or Mercedes C 200 are earning atleast 2Cr per annum??
Secondly, the colleague who sits just 2 places besides me, bought a 25L Alcazar. He must be earning atleast 1Cr.
I know wife/kids/home/emis/other aspirations do come into the play and along with family heirloom and side businesses, but still, its a bit incomprehensible for me (26 yo with 5 y work exp).
…and have I made a huge grave mistake by spending 90% of my annual income in procuring a VW Vento last year? Only healing balm is the fact that I didn’t take any loan. Phew…
Here’s what BHPian DDIS_RE650 had to say on the matter:
I have one philosophy, keep yourselves debt-free. A Car should not be more than 6 months’ net salary and a home not be more than 5 years’ net take home.
You should be able to close a car loan within one year and a home loan in 5 years.
Never say yes to any personal loan, settle credit card due before salary credit day and pay EMI or SIP during 1st week of month.
Maintain 1 or 2 bank accounts and only 1 credit card for ease of transactions.
I always believe, that none of the bank credit card offer is worth getting additional card.
Note : This is only applicable to taxable salaried people. For business men they have the option to declare losses, and expenses and buy assets to save taxes.
Keyword: Which car would you buy at what salary range in India?