automobile Buying Advice: Considering your yearly salary, how much of an expensive automobile should you purchase? Recognize this formula

 automobile Buying Advice: Considering your yearly salary, how much of an expensive automobile should you purchase? Recognize this formula

automobile Buying Advice: Buying an expensive automobile may be a mistake for many individuals. Although the car may seem appealing, they end up breaking their family budget when they have to pay large monthly installments. Determine the appropriate automobile price based on your income.

Purchasing a vehicle used to be a huge thing, but now days it's almost required. Nowadays, many prefer to drive their own cars instead of using public transportation while commuting, whether within the city or outside of it. This explains why the market now offers every automobile model with the greatest features. In these circumstances, consumers often purchase an expensive automobile after viewing the appealing car that fits within their budget.

They enthusiastically take out a large bank loan for this at the moment, but later on when they have to pay hefty EMIs every month, their finances fall apart. If you would like that you never have such a situation, then satisfy the car's requirements in line with your money. Learn the unique 50/20/4/10 method here, which will help you determine the appropriate automobile price based on your yearly income. Recognize this formula:

Half the yearly revenue should equal the value of the automobile.

Here, "50" refers to fifty percent of your yearly salary. Prior to any automobile purchase, determine that the cost of the vehicle should not exceed half of your yearly salary. You should only spend up to Rs 6 lakh on a vehicle if your yearly package is Rs 12 lakh. This means that if you purchase an expensive automobile, your budget can be affected.

Recognize the significance of 20/4/10.

The number 20 in this calculation denotes a 20% down payment. In other words, if you want to purchase a vehicle for Rs. 6 lakh, you need, in any event, provide a down payment equal to 20% of Rs. 6 lakh, or Rs. 1,20,000. Giving more is great if you are able to, but don't give less. Here, "4" refers to the loan's duration, meaning that it shouldn't be more than four years for a vehicle loan. On the other hand, 10 indicates that your EMI should not exceed 10% of your yearly income.

What is the EMI for Rs 4,80,000?

Let's say you want to purchase a vehicle for Rs 6 lakh, with a Rs 1,20,000 down payment at a rate of 20 percent. You would need to take out a loan for Rs 4,80,000 in this case. Let's say you get a car loan from SBI. The SBI calculator indicates that the interest rate on a loan of Rs 4,80,000 would be 8.75%. You would be required to make EMI payments of Rs 11,888 per month in this scenario.