Car Loan Formula: Everyone wants to buy a car. You can buy a car any day you want, but before buying a car you should know when you should buy a car. It is also important to know how much a car should cost. Although there is no rule for this, but if you want that your budget does not get spoiled then you have to move ahead under a formula and keep some things in mind (Car Buying Tips).
How much does one need to buy a car?
Here we are talking about those people who are planning to buy a car by taking a car loan. Those who take a car loan should avoid buying a car more expensive than half of their total salary. Suppose your salary is Rs 10 lakh per annum, then you should try not to buy a car worth more than Rs 5 lakh. If you want to buy an expensive car, then first wait for the salary to increase, otherwise your budget may get spoiled.
When should you buy a car?
At what stage of your career should you buy a car, it will depend on how much your salary is and which car you want to buy. When your total salary is double the price of your favorite car, then you can easily buy a car by taking a car loan. Many people think that if you have to take a loan, then why think too much about it, but if you buy a very expensive car then your budget can get spoiled.
20-4-10 formula for buying a car
If this formula is followed, the budget does not get spoiled. There are three things in it, the first is that you should pay about 20 percent of the price of your car as down payment. The second point is that the car loan you take should not be for a period of more than 4 years. The third point is that the EMI of the car loan should not exceed 10 percent of your salary.
Higher down payment, shorter loan tenure
First of all, try to make as much down payment as possible while buying a car. This will make you pay less interest. In this case, if you want, you will be able to reduce the loan period or reduce your EMI. If you already have a car, then instead of buying a car by taking a car loan, think of buying a car by saving money and investing it.
Don’t get carried away with the latest model
If you want to save money, then don’t get into the trap of buying the latest model. The latest car comes with a higher price or you can say that you don’t get any discounts on it. However, after some time you get a good discount on the car. Also, you get to know how the performance of the car is, so it becomes easier for you to decide which car to buy.
