Facebook TwitterLinkedInYoutubewhatsapp Start Planning for your Financial goals
Schedule Your Free Consultation
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Financial Planning chennai India, Private wealth management chennai India, Investment Advisory India, Systematic Investment Plan, Mutual Fund SIP, Mutual Fund ELSS, Tax Saving scheme

  • Home
  • About Us
    • Who we are & What we do
    • Services
      • Financial Road Map
      • Retirement Roadmap
      • Asset Allocation Plan
      • Webinar
      • Money Management
      • Wealth Management
    • In the Media
    • Testimonials
    • What Makes Us Different
    • How we can help you
    • Specialties
    • Honors and Awards
    • Vision & Mission
  • Resources
    • Blog
    • Articles
    • Podcast
  • Ideal Client
  • Contact Us
9 proven and practical steps to plan and purchase your dream car

9 Proven and Practical Steps to Plan and Purchase Your Dream Car

by Holistic 2 Comments | Filed Under: Financial Planning

Buying a car is a special and exciting goal for many. It is the most wanted material possession. When you start earning and saving, this becomes a dream for many.

“A dream without ambition is like a car without gas… you’re not going anywhere.” Sean Hampton

Table of Contents

    Step 1: Decide your car’s budget
    Step 2: Decide if you want to buy a new or a second-hand car
    Step 3: Check the resale value
    Step 4: Research thoroughly
    Step 5: Find the additional costs attached
    Step 6: Negotiate
    Step 7: Decide if you should go for a car loan
    Step 8: Get an idea of how much to save
    Step 9: Calculate the amount required for your dream car
    Conclusion

Some questions in your mind could be:

  • How much should be the budget of the car?
  • Should you buy a new car or a second-hand car?
  • Should you go for a car loan?
  • How much should you be saving to buy a car?

These questions will be addressed here in this blog. It will guide you to buy your dream car.

How does it feel when you hear the word “car”?

There are two types of people. Check what category you fall into:

The first category: They feel it is as a vehicle which helps them move from one place to another.

The second category: These people have an emotional connection to the car. They have strong feelings and emotions attached. They name their cars and feel it more than just a car. They feel it’s a part of their family, which brings back a lot of memories like long drives, vacations, and other such memories. So this is the second category of people. Many fall into this category.

“The way I drive, the way I handle a car, is an expression of my inner feelings.” Lewis Hamilton

Which category do you fall into?

Now let’s see the simple steps involved in buying a car.

Step 1: Decide your car’s budget

“Budgeting has only one rule: Do not go over budget.” ― Leslie Tayne

The budget depends totally on your requirement. Requirement includes:

  • The number of members in your family
  • Resale value
  • Safety features
  • Fuel economy

You can decide how much you would like to spend on your dream car depending on your requirements.

Step 2: Decide if you want to buy a new or a second-hand car

Some think the car is an asset or an investment, but it is not so, its value depreciates quickly. Hence becoming a depreciating asset. If you were to buy a new car, it depreciates as soon as you drive it out of the showroom. A new car decreases in value in the first two to three years, especially in the first year.

Before you decide whether to buy a new or second-hand car, let’s see the advantages and disadvantages of both.

Advantages of a New Car

  • Latest technology
  • Latest features
  • No issues, as its brand new

Disadvantages of a New Car

  • Costlier compared to a second-hand car
  • High depreciation
  • Loan burden (if you avail the loan facility)

Advantages of a second-hand Car

  • Cheaper and easily affordable
  • Avoid registration fees and other charges (road tax and other RTO charges)
  • Can be bought without a loan
  • Low insurance premium
  • Low depreciation
  • Better resale value
  • Leads to more savings

Disadvantages of a second-hand Car

  • Old technology
  • May require repairs
  • High maintenance
  • Legality issues (to know the old owner/were there any accidents before)

You have seen both the advantages and disadvantages of a new car and a second-hand car.

There are a few more ways to choose between a new and a second-hand car

A. If you plan to own a car for just a few years, say 1 to 3 years, you could go for a second-hand car, if its 4 or more years you can plan for a new car.

B. If your budget is low, you can go for a second-hand car, once your budget increases you can go for a new one.

C. If you’re just learning to drive you can go for a second-hand car, once you are confident you can go for a new one.

These are ways to prioritize according to your needs, choice, circumstance, and lifestyle.

Step 3: Check the resale value

It’s better to know the resale value of the car, just in case you want to sell it due to a financial crisis or want to buy a new car.

Step 4: Research thoroughly

This will let you know about the different prices at which the car is available, what are the additional costs attached to it, what is the price you can reach after negotiating.

Step 5: Find the additional costs attached

it’s always helpful to calculate the other costs of owning a car. They include car cost, cost of registering a car, fuel cost, tolls, parking, PUC, puncture, car servicing, car insurance, maintenance costs which include oil changes, new brakes, air filters, tire change, and other miscellaneous costs.

Here is a rough estimate of the additional costs attached to buying a car. The average holding period of a car is 6 years. For eg: You buy a car worth Rs.10 lacs. Let’s see how much you will be spending on it for this 6 years period.

The car cost Rs.10 lakhs

Petrol/Diesel Rs. 7 lakhs

Car insurance Rs. 1,00,000

Car servicing Rs. 80,000

Tire change Rs.20,000

Miscellaneous Rs. 10,000

Car loan interest Rs. 4 lakhsTotal amount spent Rs. 23,10,000

The amount you would have totally spent (on a 10 lakhs worth car) for an average period of 6 years is Rs.23,10,000.

What if you sell it at second hand. You may get approximately around Rs.4,00,000.

And the actual amount spent would be Rs.19,10,000.

What if you haven’t taken a loan, then it would be Rs.15,10,000. So, this is the total amount you would be spending approximately.

Most of them don’t think of the other costs involved when buying a car. But it is important to calculate them, so you would get an idea of how much you will be spending in total. (Not just the cost of the car).

Step 6: Negotiate

“Negotiation means getting the best of your opponent.“ Marvin Gaye

Negotiate and don’t hesitate. Also, find what are the rates at which the car is available with the other dealers.

Step 7: Decide if you should go for a car loan

Should you take a car loan?

Many doubt if they should take a car loan and many also go for it. But there is actually no need to take a car loan because it isn’t as costly as a house, where you have to spend a lot.

A car loan tempts you to increase your budget.

Many just look to the amount to be paid monthly, that is the EMI. Hence many are tempted to go for a loan of a longer period and end up buying a car that is beyond their budget.

For example, You want to buy a car with a loan. Say for eg: a car worth ₹ 10 lakhs. You have ₹2 lakhs and need a loan of ₹8 lakhs to pay for it.

Total Loan Amount = ₹ 8,00,000

Interest Rate = 8%

Loan Tenure = 60 months (or) 5 years.

EMI = ₹16,221

But it doesn’t stop here. In the end, the total amount you paid will be,

Total amount = ₹2 lakhs + ₹8 lakhs (loan) + ₹1.73 lakhs (Interest) + Repairs + Maintenance + Insurance.

It would’ve reached around ₹12 lakhs or even more. Insurance companies say that in 5 years, 50% of the value will be depreciated.

Outcome = ₹12 lakhs (money spent) – ₹5 lakhs (current value of car)

You have successfully lost ₹7 lakhs over a depreciating asset that will be nothing in few more years.

So think before you buy a car, and when buying try to get one within your budget, and if possible avoid loans.

Now here are some questions for you:

  • Haven’t you saved enough to buy a car?
  • Some people have worked for 8 years or more and still haven’t saved enough for a car. If this is your case, then it’s not how it should be. If you have been working for a few years, and if you haven’t saved enough for a car, then it’s probably because you haven’t managed your savings and you are not on the right financial track. It’s not a good sign.

  • Can you pay for the additional EMI?
  • If you already have a home loan or any other loan and now a car loan, can you afford the additional EMI or not?

  • Is your interest rate higher than your returns on investment?
  • For eg: You may have a fixed deposit at 7%, and would want to buy a car with a car loan of 13%,

    Does it make sense?

    It is suggested to redeem your investments and buy the car with this amount and the EMI that you would be spending on the loan can be saved for the next few years to build a corpus.

  • Don’t you want to use money from your investments?
  • If you have made investments worth Rs. 15 lakhs or so, you may feel that taking this money to buy a car can reduce your net worth to 0, and hence you have to start from scratch. So you may want a car loan, if this is your case, then it is reasonable.

    Now discuss with your family whether you should go for a car loan or not. Mostly advised is to avoid loans at all costs.

Step 8: Get an idea of how much to save

How much should you save per month?

For eg: If you can save Rs. 60,000 per month, then Rs.3 lacs worth car is 5 months saving. If you can save Rs. 50,000 per month, then Rs. 30 lacs worth of the car is 5 years worth saving.

So, it all depends on

  • the cost of the car,
  • the amount you will be willing to save for it and
  • the number of months/years you will be willing to save for it.

You can decide depending on these factors, to reach the goal of your dream car.

Step 9: Calculate the amount required for your dream car

This is the final step and here is a link to an easy to use dream car calculator. It’s a very simple calculator. This helps you find how much to save monthly, to reach the dream goal of your car.

Here is a simple example of how the dream car calculator is used.

Mr. X enters the cost of his dream car. Likewise, you can enter the details in the calculator and find the amount you need to save.

First, enter the cost of your dream car. Here he enters Rs. 10 lacs.
cost of your dream car Here he has to save Rs.33,333 per month (for 12 months) to arrange for the downpayment. This is how you will find how much to save monthly, just enter these details in the dream car calculator and find how much you need to save monthly.

Points to note:

  • It is good to check a second-hand car with the help of a mechanic, so you get to know the condition of the car. You can also decide whether to buy it or not and if you plan to purchase it, you can negotiate the price according to the condition of the car.
  • Insurance premiums increase with the value of the car. Hence buying an expensive car can increase your annual insurance premiums.

Conclusion

Now you would have known the simple ways in which you can purchase your dream car. You can follow these simple steps and you will reach your car goal in no time. Do thorough research and don’t forget about the additional costs when you buy a car. Avoid taking loans and try to get a car within your budget and also the car of your dreams.

If you have any comments or questions, write them in the comment box below.

Or are you interested in creating a Comprehensive Financial Plan for your financial goals?

Skip the queue by registering for your 30 Minute FREE Financial Plan Consultation. Click the ‘‘BOOK YOUR SLOT NOW!’’ button below. 

Reader Interactions

Previous article: Should You Invest In US-Focused Fund?—Here’s How to Take Advantage of Rupee Depreciation
Next article: What should you look for when investing in an IPO?

Comments

  1. RK Tiwari says

    January 30, 2021 at 8:50 am

    Very nice

    Reply
    • Holistic says

      July 14, 2021 at 1:40 pm

      Thank you

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Client Login

Recent Posts

  • ABSLI Child’s Future Assured Plan Review: Good or Bad
  • Max Life Smart Wealth Income Plan Review: Is It Worth Investing?
  • ABSLI Vision Star Plan Review: Is It Worth Buying or Not?
  • Bajaj Allianz Life Flexi Income Goal Plan Review – Is It Good or Bad?
  • Tata AIA Life Insurance Wealth Pro Plan Review: Good or Bad?
Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Google Reviews

Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Footer

  • Articles
  • Gallery
  • Ideal Client
  • Jobs(Full Time)
  • Podcast
  • Services
  • Testimonials

Connect With Us

Holisticinvestment.in
10/15, Second Cross Street,
Seethammal Extn.,
Teynampet,
Chennai – 600 018,
INDIA.

Copyright © 2022. Holisticinvestment.in | All rights reserved.    Cared with ❤ by T-Square Cloud

×