Lets say you buy a CNG Wagon R for 5Lakhs (0% downpayment). Distance from office - 10 kms.
20kms per day - 500kms per month.
Cost:
1. UBER everyday - Rs. 400 per day average. will be dirty and unhygienic. You will waste a lot of time waiting, cancelling, booking, rebooking etc. You can do some work while travelling, make calls etc. too. SLightly restrictive as your movement will be limited.
2. Personal Car - Rs. 80 per day on fuel. Rs. 300 per day EMI. Rs. 50 per day on Insurance + Maintenance. Rs. 500 per day for a driver. You can take you car wherever you want. Extremely mobile and convenient, but that is still double of what you will spend on cabs.
3. Bus / Metro / Local / Cycle / Walk - Sorted life. Rs. 2000 per month you say? Metro will be slightly expensive though. You will be an environment champ.
Buy the fastest first hand/pre-worshipped car at 75% of your annual income but first, work hard for 3 years, save and invest every penny wisely. Then take a call basis your savings and increased pay. Till then, manage.
Because a vehicle is a depreciating asset. People buy it because they are in need of it. But purchasing a car for 50 % of annual income is basically the same as investing in something you explicitly know will not pay off. Now if this was his life long wish and he had saved enough for other things then maybe it is ok, but he is an associate so I will assume he is young, and making such investments in such a age is reckless. Now of course he can simply throw finance out of the window and spend as much as he wants to without being starved for food and devoid of shelter, but if he was that kind of fellow then he would have simply done it by now and not ask this Q in the forum.
I agree - unless you're sure of parking, uber and a car's EMI are comparable - except you end up with certain intangible luxuries like... you know, owning a car. Night drives + local outstations + a storage-on-wheels where you can stash your cigarettes / liquor and forget about them till that one time that you suddenly need them. Priceless. (for everything else, there's mastercard? LOL)
As a rule of thumb, if you are buying a car only for its function, don't spend more than 35% of your gross yearly income. Also ensure that if you are taking a loan, the term of the loan should be no more than 5 years (preferably 4), and the emi is not more than 10% of your net monthly income.
If you are passionate about cars, spend up to 50% of your gross yearly income. But never more than that. Conditions regarding the term of the loan remains the same. But, the emi may extend up to 15% of your net monthly income.
Importantly, you should be able to pay at least 10% of the cars value as down payment without taking on / raising debt. If you cannot do this, then YOU CANNOT AFFORD A CAR IRRESPECTIVE OF HOW MUCH YOU EARN.
This rule has served me well. Hope it helps you too.
Rule of thumb that usually goes is to not spend more than one year's salary on the car. So in your case, upper limit would be 20 (considering the variable pay can go upto 24 keep it on the downside).
Should not buy a car in a crowded city like Delhi/Bangalore/Mumbai (99% of jobs) for atleast 5 years initially. Uber will cost you only marginally higher in a long run. Post 5 year time might buy anything slightly above 10 or under. Only a generic sound opinion. Might vary with micro variables.
20kms per day - 500kms per month.
Cost:
1. UBER everyday - Rs. 400 per day average. will be dirty and unhygienic. You will waste a lot of time waiting, cancelling, booking, rebooking etc. You can do some work while travelling, make calls etc. too. SLightly restrictive as your movement will be limited.
2. Personal Car - Rs. 80 per day on fuel. Rs. 300 per day EMI. Rs. 50 per day on Insurance + Maintenance. Rs. 500 per day for a driver. You can take you car wherever you want. Extremely mobile and convenient, but that is still double of what you will spend on cabs.
3. Bus / Metro / Local / Cycle / Walk - Sorted life. Rs. 2000 per month you say? Metro will be slightly expensive though. You will be an environment champ.
Choice is yours.
Buy the fastest first hand/pre-worshipped car at 75% of your annual income but first, work hard for 3 years, save and invest every penny wisely. Then take a call basis your savings and increased pay. Till then, manage.
YOLO.
Your experiences will be your own. So buy a car that pleases your mind and heart. Screw the bill.
Now of course he can simply throw finance out of the window and spend as much as he wants to without being starved for food and devoid of shelter, but if he was that kind of fellow then he would have simply done it by now and not ask this Q in the forum.
If you are passionate about cars, spend up to 50% of your gross yearly income. But never more than that. Conditions regarding the term of the loan remains the same. But, the emi may extend up to 15% of your net monthly income.
Importantly, you should be able to pay at least 10% of the cars value as down payment without taking on / raising debt. If you cannot do this, then YOU CANNOT AFFORD A CAR IRRESPECTIVE OF HOW MUCH YOU EARN.
This rule has served me well. Hope it helps you too.
Buy a polo TSi Manual for driving pleasure, and buy a Creta with panoramic sunroof for family.
Biwi bacche bhi khush, aur tum bhi.
Else, any small car would do.
Also, consider buying a used BMW 3 series car which is half way through its life cycle.