I want to buy a car

These days everyone wants a car with no parking space. But the question to ask is do you need a car or do you want a car. A car is convenient and useful, but if you do not have frequent travel then car is just a want. Car is both an asset as well as a liability. Asset if you need to travel frequently, liability from the point of loss of value from the date of taking possession itself. What does it mean? The value of the car goes down the moment it is on the road, add to that maintenance and fuel cost. Whether you run the vehicle or not, maintenance cost will always be there. Car is convenient, but with so many car hailing apps, do you really want a car, just for convenience and because all your friends and relatives have one?

It is good to have aspirations, but these aspirations should not come at the cost of your other goals. So check, if the car is really as important as your other goals. After taking everything into account, if you feel it is a need, then check if you have at least 25% of the cost for down payment and enough surplus to pay monthly EMI. These EMI’s are not tax deductible, so try to keep the repayment period as short as possible, as the interest would be eating into your other goals. Check if a new car is really necessary, these days you get good second hand cars, you can upgrade when your finances are comfortable. If you want to upgrade, do not do so, unless the maintenance cost have really gone up and the car is giving frequent trouble.