Buying a car in India involves careful planning and research to ensure you make a choice that aligns with your budget, lifestyle, and preferences. Whether you're a first-time buyer or looking to upgrade your vehicle, this guide will walk you through the essential steps and considerations for purchasing a car in India.
What are the Important Steps to Follow While Buying a Car in India?
- Budget Planning: Before you start searching for a car, it's crucial to set a budget. Consider not just the cost of the car but also additional expenses such as insurance, registration, taxes, and maintenance.
- Research and Selection: Think about factors like the type of car (hatchback, sedan, SUV), fuel type (petrol, diesel, electric), and features you require.
- New vs. Used Vehicles: Decide whether you want a brand-new car or a used one. Both options have their pros and cons, so weigh them carefully based on your budget and preferences.
- Car Financing: Explore various financing options, including bank loans and manufacturer financing schemes. Compare interest rates and loan terms to find the most suitable option.
- Test Drives: Always take the car you're interested in for a test drive. This will help you assess its comfort, performance, and handling on Indian roads.
- Insurance and Registration: Ensure you have the necessary insurance coverage and complete the vehicle registration process as per local regulations.
- Negotiation and Documentation: Negotiate the price with the dealer and ensure that all necessary documents, including the sales agreement and warranty information, are in order.
- Resale Value: Consider the resale value of the car you're buying. Some brands and models hold their value better than others.
- Maintenance and Fuel Economy: Assess the long-term maintenance costs and fuel efficiency of the car. This can significantly impact your ownership experience.
- Safety Features: Safety should be a top priority. Look for cars with advanced safety features, including airbags, ABS, and stability control.
- Car Buying Calculator: Use tools like our Car Buying Calculator to estimate the total cost of ownership to make an informed decision.
What is a Car Buying Calculator?
The Car Buying Calculator is a great tool designed to help you make smart and financially responsible choices when buying a new car. This calculator considers factors like salary and loan EMI to provide insights into your budget for your dream car. Let's explore how to use it and why it's essential for your car-buying journey.
How to Use marketfeed’s Car Buying Calculator?
Simply enter the following details:
- Your monthly salary
- The percentage of your salary you're willing to allocate for the car's EMI.
- The loan tenure (duration) in years
- The interest rate on the loan
- Your preferred type of car.
The calculator will instantly reveal which car you can comfortably buy today, the loan amount you'll need, the down payment required, and even suggest other cars within your budget.
Why Should You Use the Car Buying Calculator?
The first step in your car-buying journey is to understand your financial boundaries. Our Car Buying Calculator empowers you to do just that. By inputting your salary details, EMI percentage, loan tenure, interest rate, and car preferences, you'll instantly receive a clear picture of the amount you can allocate to your dream car.
How Much Should I Spend on a New Car?
While deciding how much to spend on your car, consider the 28/36 Rule of Affordability. According to this guideline, your Car Loan EMI should ideally be less than 28% of your pre-tax income (we’ve fixed it as 20% in our calculator). Moreover, the total of all your loans (including home, car, personal, etc.) should stay below 36% of your pre-tax income. Lenders typically assess these factors, along with your Credit Score, before approving your loan application.
Some other important pointers to note:
- Don't spend your entire savings on down payment.
- Be sure that you can take care of maintenance costs considering your income.
What are the Factors Influencing Car Loan Affordability?
- Income: Your income is a vital factor. A stable income enhances your chances of securing a loan and provides a clear picture of your repayment capacity.
- Age: Younger individuals often have an advantage, as they can demonstrate longer repayment potential compared to older applicants.
- Income Sources: Having multiple income sources increases your loan eligibility.
- Current EMIs: Existing loans and their associated EMIs can impact your car affordability.
- Credit Score: A healthy credit score streamlines the loan approval process, while a lower score may pose challenges.
Understanding these factors and utilising the Car Buying Calculator can help you make an informed decision when purchasing your dream car.
Enter percentage of salary for EMI (max 20% preferred)
