Maximum Car Loan, EMI & Car Value? - YouTube

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Hello friends, my name is Mukul, and welcome to Asset Yogi.

Friends, in this video we are going to talk about how expensive cars should we buy?

Earlier I have done 2 videos related to this.

In the first video, we discussed financial perspectives

How we should see the interest rate while purchasing a car.

How to see depreciation,

Should we buy a new car or an old car?

And in the second video, we talked about

whether we should take a cab or should we buy a car.

Nowadays cabs are also affordable so should we depend on cabs only?

If you haven't seen those videos,

then definitely watch those videos before watching this video.

The links are in the description

After watching those videos if you have decided that you want to purchase a car.

So the next step will be our budget, And how expensive a car should we buy.

How should we decide the budget? We are going to discuss it in this video.

I will discuss 3 thumb rules related to it

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When we purchase a car we associate many wishes with it.

Sometimes we want to buy a Sedan car or an XUV.

We want to get airbags installed in our car.

safety and security features Alloy wheels

We want to buy an affordable car with Maximum Luxury.

But the question arises: should you take a loan for a luxury car?

According to me, you should not

We can divide it into two aspects

Whether you are buying a car for your needs, or you are buying for your wants.

Needs means it is your requirement.

If it is your requirement then what calculations you should do.

if you are buying for "want" means you just want a luxury car

Then how you should approach it, We will talk about both.

In the previous videos related to this, many people asked that why we earn

we earn to buy luxuries Yes, there is no doubt about that.

I am not against buying luxuries, I am against buying luxuries on loans.

Any why we will talk about both,

firstly we will talk about if a car is your need then how you should buy it

It has a thumb rule

We want to find the maximum value

The 10 times your monthly income will be your budget for a car.

10 times of monthly income means you can add your total house holdings

Let's say you live with your mother and father and you want to buy a joint car.

So you can add the monthly income of everyone.

If you have a spouse, you are husband and wife and both of you earn.

Then you add this also to your monthly income

Once you find out your monthly income

Let's say your monthly household income is 50,000.

It's 10 times that means your budget for a car will be 5 lakhs.

And I am talking about need.

If you want to buy a car for your needs then this is a thumb rule,

You can buy a car for up to 5 lakhs.

It's about cash, if you have saved cash If You have invested earlier

So you can buy a car worth rupees 5 lakhs If you don't have 5 lakhs immediately

If you want to take a loan, you can calculate the maximum loan amount you can get.

The maximum EMI you can pay for the car depends on your salary.

It also has a thumb rule,

let say at 50,000, if you can get a loan of up to 15 lakhs.

So you should take a loan of 15 lakhs, it's not right.

It also has a thumb rule.

You can pay only 15% of your monthly income on a car loan

Remember that

15% of 50,000 is 7500,7500 is your EMI You have calculated this.

After this, you will see the maximum loan amount you can get.

According to it, I have assumed that if you take the loan for 5 years at the @10.5% interest rate.

Then you will get a loan of Rs 3.5 lakhs, you can calculate it with an EMI calculator

I will give you its link below

So with this EMI calculator, you can calculate your EMI

and you can also back-calculate your loan amount.

If you want to find out EMI of any Loan

So firstly you will enter your loan amount,

here you will enter the interest rate of that loan.

And here you will enter loan tenure, For how long do you want to take that loan?

Whether it is a home loan, personal loan, loan against property

or it is a car loan, any kind of loan. Now, what do we want?

Firstly we want to back-calculate loan amount, Here we will enter our interest rate

loan tenure is of 5 years, now the EMI for 5 lakhs loan is 10,700

But we have to reach 7500 EMI. So here we will do trial and error the loan amount

Here EMI of 8500 is coming on a loan of 4 lakhs.

What EMI will come If we change the amount to 3.5 lakhs.

EMI is around 7500, So our loan amount is 3.5 lakhs

If our EMI is 7500 which is the maximum we can pay

it means we will get the maximum loan amount of 3.5 lakhs.

once you calculate your loan eligibility

According to the salary of 50,000, you can take the maximum loan of 3.5 lakhs.

After that, you have to see the down payment, The thumb rule of the down payment is

At Least you have to pay 20% to 30% of the car value.

That means for this car if we take 20% to 30% of 5 lakhs

So when you add this it becomes 1 to 1.5 lakhs.

So your car will be worth rupees around 4.5 lakhs to 5 lakhs

So our 3 thumb rules have come out if you want to buy a car in cash,

then 10 times of your monthly income is your budget.

If you want to buy a car in cash then you can buy at 10 times your monthly income.

The second thumb rule is we can pay 15% maximum EMI of our monthly income

The third thumb rule is how much should you make the down payment.

At least you should pay a minimum of 20% to 30% of the car value in a down payment.

So this was a matter of need, now we talk about luxury.

Many people say that they want to buy a car worth rupees 10 lakhs.

Even if I have an income of ₹50,000

Of course, you can buy it, but it is your want So what you have to do

If your need is of 5 lakh then take a loan of 3.5 lakhs

But now you want to buy a car worth rupees 10 lakhs now rest 6.5 lakhs.

You should save or you should invest somewhere

If you saved or invest this money and if you have cash

Then you can go and buy

I just want to say that you should not take too massive loans.

You should not do this like you are only making a down payment of 1 lakh or 1.5 lakh

And for the rest of the money, you are taking a loan of Rs 8-9 lakhs.

Rather you should do the reverse, first, you should decide the amount of your loan.

That this is the maximum EMI I have to pay.

After that, bring the rest amount from your investments or savings.

Accordingly, make the budget for your car.

So it serves both of your purposes

If you want to buy a car for your need then you know your budget

And if you want to buy a car with luxury then also you know your budget

Accordingly, you will make your savings and investment.

I hope you liked the video so please like and share it

What do you think about buying a car ?

Should we take more loans or we should save more, tell me in the comment section below

If you want to suggest topics for future videos you can tell us in the comment section below

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See you in the next video

Till then keep earning keep learning

And be happy as always