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PLAN TO BUY A CAR ON EMI ? FOLLOW THIS SIMPLE CALCULATION TO FIND THE BUDGET SUITS YOU


When buy a car, some people book the car which they liked without any second thoughts, Some people buy a car based on performance, quality, reviews etc., Some people buy based on their budget. All this is fine for those who are buy with ready cash.

For those who buy on EMI, they should consider the price and EMI more than their likes, preference etc., you can find what budget of car you can afford to buy and pay EMI without affect your monthly usual expenses and Savings. 

Rule 20-4-10 

You will pay a down payment of 20% of the car price, pay off your entire car loan within 4 years, and pay only 10% of your salary as monthly EMI. If you buy a car within this budget, the car loan will not be a big burden for you and you will not face financial problems.

My salary is 40000. In what budget can I buy a car? 

If I pay 10% EMI per month, it will be 4000 rupees, and if I pay for 4 years, it will be 4 x 12 = 48 x 4000 - 1,92,000.

The initial on-road price of a basic model car is 5 lakhs, and if I pay 20% down payment, it will be 1,00,000. First I save that down payment amount first and have it in my hand, the EMI I will pay is 1,92,000, the total is 2,92,000 so as per this calculation I will either increase my income to buy a car worth 5 lakhs or buy a second-hand car worth 2.5 lakhs to 3 lakhs.

Many people buy a car with whim and excitement and worry later because the insurance you pay for a new car, the service you do every few months, and the interest you pay on EMIs are all high. Therefore, it is best to buy a car that fits your income or wait a while and buy one.


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Comments

  1. AnonymousJanuary 3, 2025 at 6:19 PM

    Informative and very useful. You are beautiful and smart 🥰

    ReplyDelete
  2. Venkata PrasadJanuary 3, 2025 at 8:40 PM

    Very nice ! The article provides practical advice on buying a car responsibly, especially when opting for an EMI. It highlights the importance of budgeting with the "20-4-10 rule"—20% down payment, 4-year loan tenure, and 10% of monthly income for EMI. For a ₹40,000 monthly salary, this means focusing on cars priced around ₹2.5–3 lakh or increasing savings to afford a higher-priced car without financial strain. The emphasis on balancing affordability and future expenses like insurance and maintenance is a key takeaway to avoid regret.

    ReplyDelete
  3. Balagopal MenonJanuary 5, 2025 at 6:55 PM

    Very informative article. I am a great fan of you beauty♥️

    ReplyDelete
  4. Balagopal MenonJanuary 8, 2025 at 7:04 PM

    Can we talk

    ReplyDelete
  5. AnonymousJanuary 19, 2025 at 4:10 PM

    Why you don't post anything in last 12 days..Am your fan for your article and you too..keep posting.

    ReplyDelete

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