Looking to buy a car of your dream but do not have the requisite funds to do the same. Start saving money so that you would have sufficient bank balance to buy your dream car. The savings could take a lot of time to accumulate. You are required to be careful about your budget so that you can make monthly repayments accruing on car loan on time. You can opt for loan from various banks and financial institutions to buy the car. But before availing any of the options, one must follow the cardinals mentioned below.
Assess your requirements
Most of the people’s budget are hit hard during the time of buying a new car as they are mostly unaware of their actual requirements. Therefore, it is vital to assess your requirements so that you would be in a perfect position to buy the new car. People normally consider the purchase price only and tend to forget other costs that they have to pay while buying the car. Some of the upfront costs that you have to pay include delivery charge of dealers, government stamp duty, and luxury car tax that may apply if the cost of the vehicle exceeds a certain amount. Also you need to consider costs for registration, future repairs, maintenance and services, etc. So just figure out your requirements and start saving accordingly to buy your desired car.
Calculation of income and expenses vital
Making proper calculation of income and expenses will help you know your financial standings. This will also enable you to assess how much you can afford for car loan. Deduct the expenses from your monthly earnings and see how much savings you are able to make. You have to consider a list of expenditures including rent, electricity bills, school fees, spending on grocery items, life and health insurance premiums, etc.
Since buying a car can put some pressure on your pocket, it is vital you do some extra savings to fulfill your dream. You can open a recurring deposit (RD) account, fixed deposit (FD) account, do part time jobs like freelancing, invest in life insurance schemes, etc. Suppose if you earn a monthly slary of say Rs 30,000, you can part Rs 3,000-4000 out of the amount to either RD and earn interest arising out of the same. Recurring deposits are made on a monthly basis. At the same time, you can open FD account with an amount of Rs 10,000-50,000 for a period of one year to make substantial savings. Fixed deposit as the name suggests is a one-time payment that you make for a period you wish to. Like RD, this investment module also gives you the opportunity to earn interest. Investing in both the deposit schemes will boost your savings substantially. In this age of increasing expenditure, you can’t discount the importance of life insurance as it can help you build reasonable savings to ensure you get the possession of the car.
Take out some of your leisure time and do some freelancing work to earn extra.
Freelancing can be either on a part-time or a full-time basis depending upon the magnitude of the task. There are a large number of companies that offer freelance jobs to people in India. Firms involved in market research, management consulting, content writing agency, web development, language translation consulting are increasingly offering freelance jobs on part-time as well as full-time basis. This will eventually help you increase your earning and hence put you in the right position to buy the car.
Online Writing Job
Writing aficionados can earn money online by showcasing their writing expertise for many websites that seek content on a regular basis. If you are a prolific writer, you stand to gain the most from online. You would be assigned the tasks to write short and long articles, blogs, journals, online communication, etc. Writers can earn on article or word basis. Different companies have different pay structure for writing assignments.
People can easily create free as well as paid blogs and post things they know on them. You need to put ads of the ad networks, such as Google AdSense, on your blog. And you can make money from each click on the ads placed on your blog.
Saving options, which are intended to reduce costs and boost savings, can be briefly summarized in the following points.
- Recurring Deposit
- Fixed Deposit
- Life Insurance Schemes
Cut down on unnecessary expenditure
When you are set to do as big as buying a car, then you must prepare to cut down on unnecessary expenditures. You can do away with restaurant expenses, luxury holidays, frequent shopping for clothes to add extra to your kitty. It is understand that different people deal with varied situations. But avoiding such expenditures will put you in the right stead to enjoy the privilege of being a car holder.
Think out of the box
Second Article Don’t go by the illusion that only buying a car is the lone option available. Think deeper and lease the new car as it can be financially more viable. This option will help you refinance and upgrade to a new model when the lease period is about to be expired.
Car lease is a process in which you can get the possession of a new or used car by paying a portion of the actual cost of the vehicle and not to pay the entire cost which you have to do when you buy the new car. You can use the car for the time period stipulated in the lease agreement.
Overview on car loan from banks
You can choose from a number of public and private sector banks to avail car loan. Read entire details ranging from EMIs to prepayment options to assess your purchasing power. Car loan can be availed from 85-100 per cent of the ex-showroom price of the vehicle for 1-7 years. Car loan is available to a wider category of professionals including salaried, self-employed professional, self-employed non-professional. There is a list of documents sought by banks to extend car loan. Details regarding the documents are enumerated in the table below.
|Documents Required||Salaried||Self-employed professional||Self-employed non-professional|
|Latest salary slip/Form 16||Yes|
|Income tax returns of two previous financial years||N.A.||Yes||Yes|
|Business Stability Proof||N.A.||Yes||Yes|
|Partnership deed and letter signed by all partners||N.A.||N.A.||Yes|
|Resolution by board of directors and memorandum and articles of association||N.A.||N.A.||Yes|