How much must one spend on buying a new car

Kilhor, an UPSC educator on his Instagram, has stated he encourages people to purchase new cars, but at the same time, he has cautioned against choosing a vehicle beyond their financial means. He put a suggestion that individuals must use half of one’s annual income as a broad benchmark for deciding the car’s purchase price, while stating younger buyers could consider spending some more.

Kilhor also offered examples to explain why buyers must match their vehicle choices to their earnings. Someone earning might be 12 lakh annually, he stated, one should consider a more affordable model such as a Maruti Suzuki Baleno instead of stretching their budget for a Mahindra Scorpio. Similarly, an individual earning around 30 lakh must consider buying a Toyota rather than buying an Audi.

Kilhor also addressed concerns regarding paying interest on car loans. Citing an example of a Rs10 lakh vehicle, he stated the interest cost could be around Rs. 80,000 over five years, which he considered reasonable given the utility a car provides.

He encouraged people to calculate the economic value of the time saved, arguing that the benefit could outweigh the annual cost of owning a vehicle.

Using a Rs 10 lakh car as an example, he stated that even if its resale fell to Rs 5 lakh after 5 years, the depreciation would amount to Rs. 1 lakh annually. He stated that buyers must consider this expense alongside the convenience, independence and time saved through personal mobility.

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Mary Sagaya

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