How Women Can Buy A Car: Breakdown Of Down Payment, Loan & Expenses By Expert

Having a car was once a luxury but in today’s life has become a necessity. Often females rely on their partners or male colleagues to go somewhere. Many of us even opt for public transports. As eco-friendly as it sounds, it is feasible if you commute a short distance.

But if you have to travel long distances, it is budget-friendly to own a car. “Car ownership is more affordable if you cover medium-to-long distances frequently,” said Nidhi Nagar, a financial expert, when we asked her advice on how women can buy a car.

Financial Tips To Buy A Car

• Prepare a budget and see what cars fit into your range. You can learn about everything a car has to offer on the internet.
• A financially sound pick would be one where you would spend 10% to 15% of your take-home pay when deciding on monthly payments.
• Take your lifestyle into consideration when deciding on a car and its features.
• Calculate the running costs of each car on your list and ensure that whatever you pick from the slot does not hamper your monthly budget (union budget: what gets expensive, what gets cheap).
• If you are not satisfied with a dealership’s services, look for other options.

Breakdown Of Down Payment, Loan & Expenses To Buy A Car

If you have picked a car, here is how the breakdown of loan, down payments and other expenses goes. The rule of thumb is 20-4-10.

• You should have 20% of the down payment for the on-road price of the car.
• Then comes the tenure of the loan, which should not be more than four years. However, banks these days offer loans for up to seven years. If you opt for this option thinking you will pay less EMI per month, you will end up paying more on interest.
• Last is all other expenses related to a car, including maintenance, EMI, fuel charges, insurance, etc. It should not be 10% of your monthly income (income tax tweaks 2023).

For example, if the on-road cost of the car is ₹20L, you should be ready with ₹4L as a down payment. It will reduce the loan burden on your shoulders.

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Importance Of A Car

Nagar gave an example. If you travel 30km for five days a week and cover 20km over weekends. Let’s add 1,000km a year for outstation travel via rental cabs.

“While going to work, you commute at the peak hours, hence, you pay at the surge price of ₹25/km. For non-essential travels over the weekend, you pay ₹15/Km. Meanwhile, for outstation travel for 1,000 km, let’s consider the average cost over the next five years would be ₹15,000 per trip," Nagar broke down the calculation.

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Cab service will benefit you over owning a car only if you have to travel shorter distances. In such case, you will profit by 16.5%. When travelling large distances, having a car is 18% cheaper than cab services.

If you have a large family or consider any medical emergency to attend to, it would be a better option to have a four-wheeler standing at home.