Can I Afford A Car?

[firstgear]

Geetings to everyone.

First up, thanks admin for validating my account; being waiting endlessly.

Going to my question next, please bear with me if I sound odd. I know my question is very personal but I will try to be more detailed so that some of you might be able to give me your opinion based on your experience and general feelings. Since my pseudonym is anonymous, I feel OK in proceeding.

Lately this idea of buying a car has been buzzing me. Mainly because of friends and family members who are suggesting me to buy one as I have just got married. But I am not sure if I am fit for the buy in terms of financial capacity (it's been more than a decade since my immediate family owned a car and I don't have a good knowledge about the expenses coming along with owning a one).

If I am going for a car, I think I would go for something below Rs. 1.4 m and for that budget what is available for my taste is Perodua Kelisa or Ford Laser 1998 among other options.

But the problem is, at the moment I have Rs. 70k take home (with at least 8k annual increment) and Rs.0.00 savings .

Do the majority of the people here think I can be an owner of a car?

If NO, then problem solved; see you all in couple of years

If YES, what are the ways of getting a full lease for a Rs. 1.4m car? I can only go for something like Rs. 25k per month installment. With the balance Rs. 45k could I be able to lead a decent life?

(At the moment I don't have house rents, utility bills, schooling fee for children etc and only have the expenses of food and cloth for about 3 persons)

My monthly run would be less than 500km.

Awaiting your replies.

Thanks

FG.

[Supra_Natural]

Geetings to everyone.

First up, thanks admin for validating my account; being waiting endlessly.

Going to my question next, please bear with me if I sound odd. I know my question is very personal but I will try to be more detailed so that some of you might be able to give me your opinion based on your experience and general feelings. Since my pseudonym is anonymous, I feel OK in proceeding.

Lately this idea of buying a car has been buzzing me. Mainly because of friends and family members who are suggesting me to buy one as I have just got married. But I am not sure if I am fit for the buy in terms of financial capacity (it's been more than a decade since my immediate family owned a car and I don't have a good knowledge about the expenses coming along with owning a one).

If I am going for a car, I think I would go for something below Rs. 1.4 m and for that budget what is available for my taste is Perodua Kelisa or Ford Laser 1998 among other options.

But the problem is, at the moment I have Rs. 70k take home (with at least 8k annual increment) and Rs.0.00 savings .

Do the majority of the people here think I can be an owner of a car?

If NO, then problem solved; see you all in couple of years

If YES, what are the ways of getting a full lease for a Rs. 1.4m car? I can only go for something like Rs. 25k per month installment. With the balance Rs. 45k could I be able to lead a decent life?

(At the moment I don't have house rents, utility bills, schooling fee for children etc and only have the expenses of food and cloth for about 3 persons)

My monthly run would be less than 500km.

Awaiting your replies.

Thanks

FG.

Welcome to the Forum, this is certainly one of the most interesting questions we've had asked on here for awhile.

First off, I'm not sure there are any places that offer full leases on registered vehicles quite as old as a 98 laser, the Kelisa might be a possibility. You can check with People's leasing and mercantile and so on, these days several leasing companies advertise offering full leases on registered vehicles so you could just check with them.

Based on what you've told us regarding your finances/income situation, I do wonder whether it is wise to tie yourself up to a lease of 25k per month on a used vehicle. Do keep in mind that even the most well kept used car will need repairs sometimes and will need regular servicing, all of which is an additional cost that you will need to budget for, in addition to the 25k per month commitment which will be constant. Since only you know what your monthly expenses are going to be like, you will have to decide whether you can set aside enough for any such eventualities.

Having said that, the new Maruti Altos are going around 1.4 million I believe and with that you have the peace of mind of a new car with a warranty, might be worth considering as you won't have to worry about repairs for a while. Leasing for those is available all over the place I believe.

Anyway, that's just my view, others will also no doubt weigh in but do keep in mind that all we can give you is general advice. Only you know your actual situation so you need to make the decision most suitable for you.

Let us know how it goes,

Cheers

[MasterDon]

Usually when a guy asks me if he can afford a car or not,he can't.

70k per month is a pretty decent salary.People manage to own cars with less income...but zero savings part is a bit worrying as there surely will be added expenses on top of the lease.

The question is not what your friends and family are saying,it is wether you NEED a car a car or not.Will the ownership of a car considerably improve your life and make it easier and more efficient.If so,go for it.

A little tip.When buying a car do not buy one for the maximum amount you can afford or borrow.Keep it between the 60-80% mark.

Edited March 11, 2015 by MasterDon

[hrm]

Me too think if you really need one going for a brand new Alto would be the safest bet. Even if the car is non Jap, it would be trouble free atleast for 2-3 years. It would be a good first time car as well since those are pretty simple in design. After couple of years with some more savings and experience you can go for a better one.

Some years ago I was in the same situation, then bought a 17 year old car, had all sorts of trouble, spent damn good money on repairs etc (no regrets though). But I was single then

Edited March 11, 2015 by hrm

[The Don]

I have one question before I provide an answer. For what will you use this car? Will you be using your car for a daily comute, or will it sit idle at home and be used occasionally?

One thing for sure. In this case do what you think is best. In SL families have a way of weighing in on every decision and people making decisions to please others or frankly for show. But I think as an adult and a free man, the most sacred of our rights to make decisions by ourselves (in this case probably with your new wife) and which is right for you, not to anybody else.

[lakshan20]

I guess you can take a personal loan. There a is loan facility from N*B bank which you can pay up-to 7 years. Interest rate would be around 11.5% AFAIK. So your rental would be something close to max 25. I think you can afford a car. But think few times whether you really need a car.

[Reckless]

A newly married couple should have some extra money to enjoy them selves. A car will be handy for a couple to go here and there but I don’t recommend getting in to a huge debt at this stage just to buy a car, especially because you don’t have any savings. I think you should at least save about 15k monthly just to build up a reserve. But because you said you don’t have any house rents or utility bills to pay you just might be able to pull it off. But remember you’ll never know when will something disastrous might popup. You should have some extra cash to deal with those problems with confidence. And don’t forget overheads such as insurance, vehicle transfer fees, stamp duty etc.

[firstgear]

Welcome to the Forum, this is certainly one of the most interesting questions we've had asked on here for awhile.

First off, I'm not sure there are any places that offer full leases on registered vehicles quite as old as a 98 laser, the Kelisa might be a possibility. You can check with People's leasing and mercantile and so on, these days several leasing companies advertise offering full leases on registered vehicles so you could just check with them.

Based on what you've told us regarding your finances/income situation, I do wonder whether it is wise to tie yourself up to a lease of 25k per month on a used vehicle. Do keep in mind that even the most well kept used car will need repairs sometimes and will need regular servicing, all of which is an additional cost that you will need to budget for, in addition to the 25k per month commitment which will be constant. Since only you know what your monthly expenses are going to be like, you will have to decide whether you can set aside enough for any such eventualities.

Having said that, the new Maruti Altos are going around 1.4 million I believe and with that you have the peace of mind of a new car with a warranty, might be worth considering as you won't have to worry about repairs for a while. Leasing for those is available all over the place I believe.

Anyway, that's just my view, others will also no doubt weigh in but do keep in mind that all we can give you is general advice. Only you know your actual situation so you need to make the decision most suitable for you.

Let us know how it goes,

Cheers

Thanks for the welcome and appreciate your words.

I am kind of used to manage with minus 25k on my current salary, as I have been paying 20k monthly for an year now for my bike.

With regards to Maruti Alto, I see your point of reliability and less maintenance and it definitely makes sense. But with the kind of tight commitment I would need to get into, I expect a better outcome/investment after 6-7 years.

[firstgear]

Usually when a guy asks me if he can afford a car or not,he can't.

70k per month is a pretty decent salary.People manage to own cars with less income...but zero savings part is a bit worrying as there surely will be added expenses on top of the lease.

The question is not what your friends and family are saying,it is wether you NEED a car a car or not.Will the ownership of a car considerably improve your life and make it easier and more efficient.If so,go for it.

A little tip.When buying a car do not buy one for the maximum amount you can afford or borrow.Keep it between the 60-80% mark.

Thanks for your tip.

At the moment I am not in a definite need of a car. I ride to office by bike and take my wife too on the bike occasionally.

What I am concerned about is whether it would get more difficult for me to own a vehicle down the years to come after I get children.

[firstgear]

Me too think if you really need one going for a brand new Alto would be the safest bet. Even if the car is non Jap, it would be trouble free atleast for 2-3 years. It would be a good first time car as well since those are pretty simple in design. After couple of years with some more savings and experience you can go for a better one.

Some years ago I was in the same situation, then bought a 17 year old car, had all sorts of trouble, spent damn good money on repairs etc (no regrets though). But I was single then

After going through the forum extensively, I am kind of immune to Maruti. I have mocked several of my colleagues for owning Marutis. No offense to anyone .

Even the forum doesn't have a dedicated section for the Maruti brand .

My current mentality is either 'non-Indian car or nor car at all'*.

*subject to unconditional changes

[firstgear]

I have one question before I provide an answer. For what will you use this car? Will you be using your car for a daily comute, or will it sit idle at home and be used occasionally?

One thing for sure. In this case do what you think is best. In SL families have a way of weighing in on every decision and people making decisions to please others or frankly for show. But I think as an adult and a free man, the most sacred of our rights to make decisions by ourselves (in this case probably with your new wife) and which is right for you, not to anybody else.

I will not be using the car for daily commute. It will only be used on weekends. Rougly 400km max every month.

Sometimes I wonder that traveling by budget taxi is for more feasible than buying a car on lease with a tight commitment. For example, with 6k monthly I could visit all the places I need to visit with my family on a threewheeler, than paying min 25k monthly for the same visits to buy a car. But I don't know how that profits in the long term.

BTW, I 100% agree with what you said on SL mentality.

[firstgear]

A newly married couple should have some extra money to enjoy them selves. A car will be handy for a couple to go here and there but I don’t recommend getting in to a huge debt at this stage just to buy a car, especially because you don’t have any savings. I think you should at least save about 15k monthly just to build up a reserve. But because you said you don’t have any house rents or utility bills to pay you just might be able to pull it off. But remember you’ll never know when will something disastrous might popup. You should have some extra cash to deal with those problems with confidence. And don’t forget overheads such as insurance, vehicle transfer fees, stamp duty etc.

We are not brand new married couple. It's almost an year now

The things you mentioned are pretty much the same concerns which prompted me to put the question.

Thanks for you advice on saving. Will take note of it.

[Jor-el]

Maybe you should wait until you shift on to the second or third gear before buying a car... From your comments I see you can manage just fine without one. Newly married and zero savings, you are still going uphill; but you have a pretty decent engine (70k) so you will climb the hill in a short time and when you are cruising fine in third or fourth gear, you will be able to buy a decent car without any doubt.. If there is no need, why tiring out the engine by trying to reach top speed while going uphill? It's your ride, you are the driver, let backseat drivers rant all they want!

Edited March 11, 2015 by Jor-el

[The Don]

I will not be using the car for daily commute. It will only be used on weekends. Rougly 400km max every month.

Sometimes I wonder that traveling by budget taxi is for more feasible than buying a car on lease with a tight commitment. For example, with 6k monthly I could visit all the places I need to visit with my family on a threewheeler, than paying min 25k monthly for the same visits to buy a car. But I don't know how that profits in the long term.

BTW, I 100% agree with what you said on SL mentality.

Personally for 400km, unless you have issues getting around (as in you live far away from public transport or a taxi rank, have difficulties walking, or have family members who need to be driven around) you do not really need your own car. Like you say you can rely on budget taxis for the time being which will release some capital.

Owning car is not just about paying your finance and fuel. There is insurance, maintenance and in certain ways its an extra liability (you need to find somewhere to park it, keep it clean, take care of it etc). So you need to keep some money aside for unexpected incidents.

Your salary is not bad. But I think at this stage in your life you should build up a bit of a savings buffer, to deal with other eventualities in life such as sickness, home repairs etc, and not spend every cent you have on some things which can be considered a convenience rather than a necessity.

So how about spend a year saving that 25K a month for a year which will give you a saving of 300K and either use part of that as a deposit and buy a newer car, or buy an older but reliable car (there are such things ) within budget.

[firstgear]

Maybe you should wait until you shift on to the second or third gear before buying a car... From your comments I see you can manage just fine without one. Newly married and zero savings, you are still going uphill; but you have a pretty decent engine (70k) so you will climb the hill in a short time and when you are cruising fine in third or fourth gear, you will be able to buy a decent car without any doubt.. If there is no need, why tiring out the engine by trying to reach top speed while going uphill? It's your ride, you are the driver, let backseat drivers rant all they want!

Personally for 400km, unless you have issues getting around (as in you live far away from public transport or a taxi rank, have difficulties walking, or have family members who need to be driven around) you do not really need your own car. Like you say you can rely on budget taxis for the time being which will release some capital.

Owning car is not just about paying your finance and fuel. There is insurance, maintenance and in certain ways its an extra liability (you need to find somewhere to park it, keep it clean, take care of it etc). So you need to keep some money aside for unexpected incidents.

Your salary is not bad. But I think at this stage in your life you should build up a bit of a savings buffer, to deal with other eventualities in life such as sickness, home repairs etc, and not spend every cent you have on some things which can be considered a convenience rather than a necessity.

So how about spend a year saving that 25K a month for a year which will give you a saving of 300K and either use part of that as a deposit and buy a newer car, or buy an older but reliable car (there are such things ) within budget.

Thanks for both of yours advises. I think this is what I need to do now without rushing.

[sathyajithj99]

100% agree with what Don said. Would you mind if I ask this 70k salary is only yours or your and wife's combined? If its not and if your wife gets a salary too then I think you can manage to buy a descent car.

[VVTi]

I suggest you start building up your reserve. ave up about 300-400k and then start off from there. Owning a car from zero savings and a 70k salary is not easy. YOu need to eat, clothe yourself, pay rent/bills... then what ever i left only you can use for a car.

Things will get complicated if your wife pops a kid out too.

So take it easy. Sri Lankan elders, when you get newly married puts some retarded notions to the young couple. Such as go bring Grand Kids, go buy a car, buy a house, etc etc.

None of those are easy.

I had a friend when his and the bride's parents at a newly married dinner thingamagic they do here when newly married asked when the kids are coming, took his pants off and asked the wife to sit on his lap in front of all guests....

No more grand kids talk for years... LOL!

[sathyajithj99]

Lol I almost died laughing

[NPP]

for 400-500km, I suggest not to buy one unless you need one or have issues getting a budget taxi from home, just for the sake of buying one. Although the taxi fare for 500km would be more than the interest portion for first few months, you have to consider, running and other expenses even on a new car.

So, yes you can definitely afford one, but think if you really need one. You anyway have the bike for the moment.

[firstgear]

<blockquote class='ipsBlockquote'data-author="sathyajithj99" data-cid="274077" data-time="1426084231"><p>

100% agree with what Don said. Would you mind if I ask this 70k salary is only yours or your and wife's combined? If its not and if your wife gets a salary too then I think you can manage to buy a descent car.</p></blockquote>

It's mine only. And my wife doesn't do a job. ?

[Sampath Gunasekera]

Welcome to the forum !!!

List your plans/budget for next five years. (You may have near future projects like land purchase, house constructions, babies etc.)

If you have a big/costly project like land purchase, house construction, go for a well maintained Maruti 800 about Rs.700,000 or with Maruti Alto little over that. Don't spend much on "Yakada Godawal".

If you don't have such big projects, then you can go for a better car.

You are the one who can deiced this.

This is my two cents.

Edited March 11, 2015 by Sampath Gunasekera

[Devinda_Z]

Cost of ownership is indeed the bitter pill one ends up having to swallow - more often than not, the purchase price you can recover on a used vehicle (unlike the brand new/unreg to used initial depreciation)

If there isn't a enough of a buffer to bridge (savings or other funds) then you'll be in trouble because cars inevitably need repairs! (Also don't forget commitments like insurance, licensing etc along with wear & tear items that even a new car will have : tires, battery etc)

[Devinda_Z]

I had a friend when his and the bride's parents at a newly married dinner thingamagic they do here when newly married asked when the kids are coming, took his pants off and asked the wife to sit on his lap in front of all guests....

No more grand kids talk for years... LOL!

is this someone we know??

[Clark's son]

My current mentality is either 'non-Indian car or nor car at all'

Spend something less than what you want to spend for a car.

Let's say if you can spend 1.4mill with the lease, go for a car around 1mill.

So that you have something if there is an unexpected event or a repair in the car.

My recommendations would be the Kia Rio, Hyundai elentra/ accent. Not the best quality but better than indians,

you could hold onto one of these for some time and buy a better car when you collect some money.

A car would come in handy, let's say if you'r wife get's pregnant and need to be take to clinics, midnight travels to the hospital etc..

Edited March 12, 2015 by Clark's son

[liya]

Well, first time I read a completely honest question! All the best to you lad. Maybe you should save a bit before buying a small car? Keep something in reserve for emergencies.

Edited March 12, 2015 by liya

[VVTi]

is this someone we know??

Very much so...