Outlook Money
It is crucial to bear in mind to always factor in the on-road price of the car. The ultimate cost includes various expenses, including road tax, registration charges, and insurance premiums, making it typically 15-20 per cent higher than the ex-showroom price of the car.
When buying a car, plan your down payment in such a manner that you can manage the equated monthly installments without putting a strain on your cash flow.
Avoid allocating over half of your yearly earnings to a new car purchase. For instance, if the annual income is Rs 10 lakh, it is advisable to limit the budget to approximately Rs 5 lakh, taking into account the car’s on-road price.
Taking a car loan is not generally healthy as it puts additional pressure on the monthly cash flow. However, as it is also not possible to shell out the entire amount from one’s pocket, so, a loan becomes a necessity at times.
Walking with a huge EMI burden can prove to be stressful. Make sure that the EMI is a figure that will allow one to also save and invest any surplus left towards the other life goals after meeting family’s expenses.
Compiled by Syed Muskan
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