I read the cab service’s notification as I barely saved my phone from falling out of my rainy wet hands. 1,432 rupees for waiting as it poured and as the driver scoured his way towards where I was stranded.
1,432 rupees for arguing for my choice of route (the one I travel by twice a day, six days a week) when the driver’s sacred gospel truth a.k.a. Google maps showed a longer and more congested one.
And 1,432 rupees were enough to motivate me to take the plunge of 14 lakhs as I decided to buy my own car. Wondering how this metaphorical plunge translates into being able to drive your own car?
Step 1: Get your choices (and your priorities) straight!
First things first, decide on the car you want. Factor in your needs, average travel distance, daily road and traffic conditions, the time period you’d prefer to use the car for, and then pick on the type you’d prefer buying – a hatchback, an SUV or a sedan; a manual or an automatic and then start looking for the choices accordingly.
Personally, since my average travel distance daily is a little over twenty kilometres one way and the Mumbai road conditions are, well, let’s not even get into it else this would be a new piece altogether; I preferred an automatic transmission SUV. And my chosen one? Ford EcoSport.
To choose and help compare prices, websites like gaadi.com and zigwheels.com can be plenty helpful as they give you an insight into the pricing, available models and the difference in choices between the cars you’re looking into.
For those who wish to know more about the model, make, engine capacity –basically anything more technical than just pricing, carwale.com provides detailed information on the make and manufacture of the car, which makes their comparisons incredibly easy to follow and choose from.
Step 2: Calculate the desired payment
The next thing you should look into is to decide between either straight out buying a car in one payment, or taking out a loan on it. As appealing as the former sounds, it is also a lot more difficult to pull through at one go and a loan – through the long term is easier to comply to.
If I speak for myself, the price of EcoSport was a tad (ok, a lot) over what I could afford to pay out in a single payment and that’s where online EMI calculators come in handy.
Start by calculating how much you can afford to pay out for each month as your EMI. Do this while making sure you leave some scope of manoeuvre for maintenance like petrol, servicing, tire changes, insurance cost, parking, etc.
Now that you have the figure of how much you can pay out every month put those digits into myloancare.com against the price of your chosen car and it will furnish an answer to all your monetary questions. The loan amount, the rate of interest, the monthly instalment you’ll be paying out, as well as the time period that is most suitable to your amount – all of this crucial knowledge on one single screen!
The model that I chose was coming to somewhere around 11 lakhs and while there is also the option of paying a part of the amount up straight and take a loan out on the rest, I (like most people) chose to take a loan on the entire amount. This decision can stem from a lot of reasons –mostly because of my inability to pay a huge amount in one go (let’s face it we’re all sailing the same boat) but also largely because of the affordability of the monthly EMI on the loan.
Step 3: Calculate how much you need to keep aside every month
Talking from personal experience here, a 5-year loan on 11 lakhs comprised of a monthly EMI of 21k while a 7-year loan -18k (all calculations courtesy online EMI calculators, seriously try it! You cannot be worse than me in math). Considering where I was financially in the moment I chose to take the “plunge”, paying out 18k a month was something within the range of being manageable and much easier than arranging a lump sum of 5 or 6 lakhs in one stretch (not something that is outright impossible if managed properly but let’s face it, who are we kidding here!)
And that is what your next step should be.
If you’re going the savings way, or the half-and-half way then formalities like down payment can be managed through those coveted savings of yours (seriously how do you do it?)
For the loan people rowing the same boat as me, your current financial situation and your motivations should be able to determine the time period of the loan – a rather crucial information.
(The figures mentioned below are on a scale of approximation and suggest the loan pricing for an SUV, subject to major change for different models of hatchbacks and sedans)
If you’re too keen on getting that car and don’t necessarily believe in long outstanding loans and can afford to pay out a monthly EMI of somewhere around 80k, a 1-year loan (the minimum time period allowed for a car loan) should be ideal for you. It’s relatively quick both ways –you get the loan sanctioned, pay it out within a quick year and Voila! You have your car.
Significantly different is the 7-year loan period (the maximum allowed for a car loan) for people with relative salaries who can pay out around 15-18k a month and don’t particularly have a problem with long-term loans.
Step 4: Decide when you want (or need) the car
Once you’ve zeroed down on how much you need, or have; to spend monthly, including down payments and monthly instalments, the final element is timing.
This (obviously) relies heavily on your current financial standing. For the savings path of people (seriously, write your own article and teach me how) if you have the required amount available then there is nothing stopping you.
However, if your calculations suggest that you must be able to afford this in a couple of months then you can indulge in a little bit of budgeting for 2-3 months for just as long as you can gather the amount for the down payment. Budgeting and planning can certainly be a death ride if one does not have a knack for numbers, which is why nerdwallet.com can be your saviour guiding through these dark times.
Once that is done,
In my case, the correct moment showed itself after squandering for a little over a month to be able to afford a down payment for a lakh. Soon enough, the loan sanction followed and I was in the showroom signing what seemed like a lot of paperwork.
Step 5: Make savings mandatory
Here comes the hard part. The budgeting plan that you made in the previous step, get right down to it, make it and stick to it. As cliché as it sounds, it is incredibly necessary to save. My time period of beginning to save started after that hellish ride back home as I decided to start saving up for the down payment.
Making the correct choice in perfect correlation to your salary and your current expenses becomes especially important and finding the right fit is certainly a journey that you need to embark on. Include websites like firstchoice and cardekho.com in your daily appetite of Instagram scrolling; it will certainly be the driver (something you can be close to becoming too!) in this journey of yours.
Choosing to cook rather than eat out, saying no to that expensive girls night out once in a while, and basically just keeping out of anything too lavish or extraordinary becomes important and easier eventually. I discovered the joy of being able to squeeze in a lot more days at my ‘month-ends’ and proudly standing in the ford showroom ready to drive off into the sunset (or the traffic in case of Mumbai).
Step 6: Save, but don’t punish yourself
The ultimate aim of this endeavour is to seek comfort and pleasure. If you see that on the horizon arriving soon enough, don’t lose sight of it and certainly don’t lose the point of embarking on this plan in the first place –do it as long as you can see your car making her way towards you.
I write this as I think of this morning driving to work and noticing a white hatchback with that infamous yellow number plate as the driver manoeuvred his steering wheel while haggling on the phone, deciding which way to go.
I write this as I remember feeling sorry for the individual on the other end and praying they don’t get stranded and waste 1,432 rupees.