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.

[The Don]

Don: I'm going to need your Dad to give me a loan please!!!

On a more seriously note- Crosswind: Good break down buddy. Its very sad that these days our better educated workforce [in my opinion] have to struggle to live at an equal or higher standard of living that their parents enjoyed back in the day...

Ha ha sadly my dad suffered the same fate as many others. His salary did not keep up with inflation, but they were just lucky to have gotten some of the big spends out of the way when they could. Some of his friends had more foresight and bought acres of agricultural land and now are millionaires. My dad bought a car and a colour TV (in the early 80s) and both would have bought him an acre of land each

He now reminds his kids that we are his pension pot Just joking, he still works hard, just the way he likes it. Became self employed a decade ago. Best decision he made he says.

[xXx]

Going by your calculation its 312,500

I suppose the van must have been around 400k circa 1990 or so... An unreg Toyota Corolla was around 500k at that time as I recall. A 10-perch land in a suburb near Colombo (Kalubowila, Dehiwala or Meda Welikada, Rajagiriya etc.) cost something like 800k-1mill (the whole plot, not a perch).

Fast forward to 2015, a 10-perch plot of land in the same location would cost about 15 million if you are lucky. Axio costs about 5 mill (and that too on a permit).

which means, if your dad earned 25,000 in 1990, you should be earning at least 250,000 - 350,000 per month to be at a equal position now

During mid to late 90's when CBK issued permits weren't 110's AT210's priced around the million mark unreg? Even during early - mid 2000's just before the king was crowned unreg prices of the about 2 models (without permits) were around 2mil

Its a worrying statistic isn't it?

The vehicle I used for comparison is a base model Nissan Vanette, and the time was mid 1990s (I went to look for these vehicles myself, hence why I remember). Now my father was not a rich man by any means. He had a mortgage to pay, household bills, Elocution classes for kids, etc (thankfully both my sister and myself didn't take tution till we did our A/Ls and in my case it was a waste of money anyway ). We lived a comfortable but certainly not luxurious life.

We bought the land we live now in 1988 at just over 100K for 10p. The mortgages taken (and there were two) probably added up to about 500K to build the house...

I mean not to offend people, but while people seem to be able to afford fancy cars, overseas holidays etc, it sometimes seem to me that wage growth hasn't kept up with inflation.....

I think some things have become more affordable as the rupee seems to have held reasonably well against foreign currencies in the last decade. The pound for example has constantly fluctuated between 180-240 LKR (yesterday it was 197).

Even in developed countries wages hardly keep up with inflation. But then again those countries only have single digit inflation numbers mostly hovering in the midway mark. In comparison i doubt even the central bank governor is aware of the inflation figures in our motherland.

As i see it the main reason for the opulent lifestyle of the locals is due to the easy availability of credit and change in priorities.

[The Don]

During mid to late 90's when CBK issued permits weren't 110's AT210's priced around the million mark unreg? Even during early - mid 2000's just before the king was crowned unreg prices of the about 2 models (without permits) were around 2mil

Even in developed countries wages hardly keep up with inflation. But then again those countries only have single digit inflation numbers mostly hovering in the midway mark. In comparison i doubt even the central bank governor is aware of the inflation figures in our motherland.

As i see it the main reason for the opulent lifestyle of the locals is due to the easy availability of credit and change in priorities.

You are right.

Also somethings have become an expense now which wasn't before. The available school places haven't kept up with the rise in the population, particularly in Colombo thus most parents send their kids to private school now. At the same time the situation in government hospitals have desintigrated significantly as these were ignored areas under recent successive regime.

So some of the things that helped normal people keep afloat are slowly disappearing, which will only add to pressures.

On a positive note, the drop in interest rates is certainly down to lowering of inflation, so there are still opportunities out there if you are to invest wisely.

[Clark's son]

During mid to late 90's when CBK issued permits weren't 110's AT210's priced around the million mark unreg? Even during early - mid 2000's just before the king was crowned unreg prices of the about 2 models (without permits) were around 2mil

The CE 110 was 1.4 mill (Full option) and 1.2mill (semi option) brand new, The CT 210 was 1.4 mill recondition and the Bluebird was 1.6mill brand new

The Freelander was 2mill and the Grand VItara was 1.9mill.

[xXx]

You are right.

Also somethings have become an expense now which wasn't before. The available school places haven't kept up with the rise in the population, particularly in Colombo thus most parents send their kids to private school now. At the same time the situation in government hospitals have desintigrated significantly as these were ignored areas under recent successive regime.

So some of the things that helped normal people keep afloat are slowly disappearing, which will only add to pressures.

On a positive note, the drop in interest rates is certainly down to lowering of inflation, so there are still opportunities out there if you are to invest wisely.

Ah that's a great point.

In regards to the issue with schools, i think the problem is facilities at not so popular schools has not improved over the years, forcing parents to fight over the limited space in popular schools. I always thought there are way too many public schools in greater Colombo area taking up valuable commercial space. Solution, sell those lands and pump that money to develop schools in suburbs. This way kids will end up going to the schools in their residential area instead of spending/wasting hours on the commute. Imaging the impact this'll have on the traffic situation during schools hours.

This'll pretty much never happen. As much as i hate to admit the only person who could have achieved this is Gota.

On a positive note, i hear there's a new Zoo opening up in Pinnawella. Hopefully the next step is to relocate the existing one in Dehiwala to this new premises.

[The Don]

Ah that's a great point.

In regards to the issue with schools, i think the problem is facilities at not so popular schools has not improved over the years, forcing parents to fight over the limited space in popular schools. I always thought there are way too many public schools in greater Colombo area taking up valuable commercial space. Solution, sell those lands and pump that money to develop schools in suburbs. This way kids will end up going to the schools in their residential area instead of spending/wasting hours on the commute. Imaging the impact this'll have on the traffic situation during schools hours.

This'll pretty much never happen. As much as i hate to admit the only person who could have achieved this is Gota.

On a positive note, i hear there's a new Zoo opening up in Pinnawella. Hopefully the next step is to relocate the existing one in Dehiwala to this new premises.

Your ideas are radical

On the school location front, I can confidently say, not even Gota could have made that happen. Our popular public schools have powerful political lobbies and strong and long traditions, and there will be very strong resistance.

And to be perfectly honest, why should they be moved? This was one of the few places where there was general social equality. In my school own school we had kids from Colombo 7, as well as from the neighbouring slums, from all sorts of different social and economic backgrounds. The only thing to unite us was the badge and the Rs.216 we paid as School Development fees. And to be honest that in itself was a great learning experience.

And the facilities in these schools have been improved not by the government, but the afore mentioned lobbies, also known as old pupil associations.

But it is up to the government to make sure there are enough school places to deal with the growing population and improve the facilities of schools around. Quite frankly neither has happened. The last time I remember such development taking place was during the reign of President Premadasa ironically.

On the zoo, I have a similar view. Why should it be moved? Colombo is the most populous city and its residents should not need to travel outstation for recreation and in this case education.

My proposal is to create business parks on the out skirts of Colombo and move some of the offices out and connect them with good public transport. This is what most major cities are doing anyway. Then city centers become spaces for retail, services, recreation, while factories, warehouses, offices are maintained in easily accessible spaces by major roadways outside the main city. I think the government offices being moved to Pelawatte is part of that plan.

But on Pinnawela itself, I hope they create a space where they can make money, but end activities that was getting bad press as its a massive draw for tourists. Every British tourist I know, whose been to the country has visited this place.