Rs 3.2 lakh monthly income, no home yet: Is a Rs 32 lakh car too much?

Time of India

a day ago

Young Couple Weighs Dream Car Against Future Goals
Hidden Costs and Practical Considerations
As rising incomes reshape the lifestyle aspirations of young professionals in India, big-ticket purchases like high-end cars are increasingly seen as attainable. However, these decisions often raise difficult questions about long-term planning and financial prudence. Is it wise to splurge on a luxury car before owning a home or securing other essentials? This dilemma recently took centre stage on Reddit, where a financially stable couple questioned whether purchasing a Rs 32 lakh car would be a sound decision at their stage in life.In the post, a 30-year-old man shared that he and his wife, both working in the IT consulting sector, bring home a combined Rs 3.2 lakh per month. Their monthly expenses, which include vacations, family support, and daily needs, average around Rs 1.7 lakh. Financially, they appear well-prepared, with Rs 15 lakh in savings, Rs 22 lakh in mutual funds, and Rs 45 lakh in provident funds. They also maintain a Rs 30 lakh health insurance policy.Although they currently rent and do not own property, they hope to buy a home within the next decade. With no children yet, but plans to start a family next year, the poster explained that he was drawn to a car priced at Rs 31–32 lakh on-road, and is considering making the purchase next year after accumulating more savings for a higher down payment.The response from Reddit users was largely cautious. Many highlighted the risk of investing in a depreciating asset like a car over appreciating assets like real estate. Some urged the user to prioritise home ownership, pointing out that a property not only builds equity but also gains value over time. One commenter even stated plainly that buying a Rs 32 lakh car without a house should be ruled out entirely.Others offered practical benchmarks, suggesting that car purchases should ideally not exceed six months' worth of take-home salary—in this case, approximately Rs 19–20 lakh. Anything significantly beyond that was seen as financially risky, especially considering job market uncertainties and future obligations like raising a child.Several users weighed in on the question of whether to buy the car outright or through a loan. Some argued in favour of financing, saying that with vehicle loan interest rates generally ranging from 7–12%, the remaining funds could be invested in mutual funds, which historically offer better long-term returns. However, others pushed back, cautioning that salaried individuals don't benefit from the same tax deductions on vehicle loan interest as businesses do, and investment gains are still taxable.Beyond the purchase price, commenters also brought attention to the ongoing costs of owning a premium vehicle. Higher insurance premiums, servicing charges, and repair expenses were flagged as important considerations. Several users also pointed out the poor road conditions in many Indian cities and the potential for frequent vehicle wear and tear—factors that could further diminish the value of an expensive car.Some respondents suggested buying a smaller, more affordable car under Rs 10–12 lakh and investing the remaining money into long-term goals such as a child's higher education or eventual home interiors.