How to save money to Buy a new Alto Car for a middle-class family 2022

It's hard for me to get a new car being a middle-class family member. I had to attend a training far off country for a day but didn't have my car. On that day, I got late to come out. However, I got a taxi after waiting for two hours. What if I had a car, I would have reached there on time, which takes only one hour. When I got there, the training was almost about to complete. 

See, nowadays, we are engaged in some jobs or businesses to earn our livelihood. But owing to low salaries, most of us cannot think of buying a new car, even having a craving need in our life. And you might have experienced that you waste your time while waiting for cabs. Usually, we work for money, but the work is not for us. What if you want to save time and do work for yourself? What if you own a car? 

Where there is a will, there is a way. 

As the saying goes, if you desire to get a new car, no one can stop you. Here are some tips and tricks to make your dream come true.

Table of Contents

1. Overview

Owning a car for a middle-class family is a hard decision but the most needed thing in the present world. Without a car, you might have experienced that you will have to wait for a cab whether you are going to your duties or somewhere else, which is the most medium of wasting time. Not only that, you need a car during emergencies, like one of your family members is to be taken to the nearest hospital. Owning a car not only saves time, but you can have more time to do your work. On top of that, it is a social status in Indian families.

When you decide to buy a new car, your brain gets stuck on many things, like how to save money, whether you can repay EMI, whether you can run home, and so forth. While trying to get a piece of financial advice, most chances are that you are not eligible to get a new car. And if your salary is below ₹15,000/month, you won't see any doors for four-wheelers. Although, if you talk with your friends, they suggest second-hand cars or a new two-wheeler.

But if you can budget your money to buy a car carefully, you can purchase a new alto car. Usually, financial advisors tell us that buying a car is a depreciating asset and not recommended to get it if there is no urgent need. Nevertheless, if we look at our safety and health status, we need a car. I think an alto car is best for middle-class families, and it has numerous benefits over congested parking areas and fuel price hikes.

2. Possible Reasons to buy a New Alto Car

Post-pandemic, buying a new car is slightly increased in Indian markets. And possible reasons to buy a new alto car are as follows: -

i. Affordability and Comfortability

Almost 50 per cent of India's population is middle class, whose annual income is between ₹ 2,00,000 and ₹ 5,00,000. And they cannot afford high-end SUV cars. But if they plan systematically, they can purchase any four-wheelers under five lakh. 

I found an alto car is the best option for a nuclear family. It can be affordable whose salary or monthly income is below ₹ 20,000. And I think they don't have to take much burden on their shoulder.

Purchasing a new car means owing a hidden expenditure. However, you will be free from monthly maintenance for at least five years. But when you go for a second-hand car, you will have to bear its monthly maintenance. And you will get a chance to feel and experience a new car in your life.

ii. Like a Property and Social Status

In Indian families, purchasing a car is not just a car but a heavy investment you will ever make, second to making a house. Despite being depreciated asset, you can sell it in any emergency case or for upgrading with a new one.

On top of that, it's a social status reflected in your friend circle and locality. I know having a car doesn't make you rich, but it symbolises your level of richness in your society. If you own a high-end four-wheeler, you are considered a rich person.

iii. Safety and Convenience

Compared to public transportation, having your car is far safer than using public transport. If you have your own, you can check numerous safety features before driving, including airbags, adaptive cruise control, collision detection, lane departure warnings, tire pressure, safety belts and blind-spot monitoring, and brake assist. You can feel much safe and more convenient.

During the pandemic, all of us have experienced the importance of owning a car. It prevents us from transmissible diseases, whereas we cannot be away from such infectious diseases in public transport.

iv. Getting from Point A to Point B

If you are an employee or businessman or person who needs to travel frequently, you must own a car. Catching cabs in the morning is a frustrating experience to find out whether it's already full or has left out. Sometimes, you'll be late for your duty.

These days, several vehicles are out there, and you get a lift, but blindly trusting unknown people may cost you a lot. So, it is not safe to travel in private vehicles.

v. Business Purpose

It's good business to run a taxi. You can buy a car and lease it on rent to Car Rental or any travel agency. If you are a driver, you can drive it as a taxi.

v. Saving Time and Peace of Mind

Sending your children to school through public transport can be stressful and time-consuming. Always stress about your bus timing. If you miss the bus, you will have another headache. For job holders, a car is needed to reach from home to duty and vice-versa. When you have emergencies like your family member is to be taken to the nearest hospital, you must own a car.

When you own a car, you can have peace of mind and time for more productive work.

vi. Other reasons

During vacations, you can travel with your family members if you own a car. And you can also go for a long drive. In addition, you can spend time in the car and go shopping for heavy items. It is easier for short errands in the case of elderly persons. 

3. Budgeting Ideas for a New Alto Car

Planning to buy a new alto car for a middle-class family might be tough to achieve. But if you have a strong hardcore desire to buy a car, you can achieve it with your low monthly salaries. Here goes the idea: -

i. Decide a model for Alto Cars

When you decide on your alto car model, you can have an idea for a budget, which is to be accumulated by you within a specific time frame.

ii. Amount to be required for a downpayment

Let's assume a model. We want to buy an alto 800 VXI plus car. It may cost us around 5.5 lacs. So, at minimum, we need to do a downpayment of 1.5 lacs. 

Now, you will have to apply for the 50:30:20 financial formula. Suppose your monthly salary is ₹ 15,000 only. You can divide your salary into three portions; ₹ 7,500/- (50%) for basic needs, ₹ 4,500/- (30%) for wants, and ₹ 3,000/- (20) for saving. So, here you will have to compromise that you can put the money allocated for wants into a budgeting plan with the savings. Altogether, you will get ₹ 7,500/- for your car budget. If your downpayment is 1.5 lacs, you require at least ₹ two lacs at the time of your car downpayment. You may need ₹ 50,000 as an add-on to your new car. So, it takes almost 27 months to collect this downpayment. But you cannot make a living with this ₹ 7,500/-, which is extremely tough.

Therefore, you will have to increase your salary by at least twenty to twenty-five thousand per month by working overtime or part-time jobs. If you are a teacher, you can take tuition. You can run a small xerox and printing shop if your home is nearby a school, office or public gathering place. If you have skills like writing, graphic designing, coding, video editing, voice-over, etc., you can work as a freelancer online. There are many websites, e.g., Fiverr, People per hour, Upwork, etc.

You may also like this: Start a YouTube Channel and make money online 2021

iii. How to save money for a new car

Once you fix your salary by working extra time, you can save money in two ways; a) Open a recurring account, b) save money onto Fixed Deposit (FD) every month.

Firstly, you need to calculate the duration. Suppose you want to accumulate two lakhs by saving ₹ 10,000/- it takes you 20 months. For example, if you start saving money in January 2023, your end month is August 2024. Set a date for the maturity of your saving, like August 31, 2024.

For recurring accounts, you have a date set at once, but for FD, you need to adjust the same maturity date often whenever you open a new FD.

When you receive your salary, you must deposit the required amount for your new car before making other expenditures.

You may also like this: How much should I save each month for an emergency fund?

iv. For EMI or Car Loan

After making the downpayment, you can take a car loan or EMI, but your EMI should be four years or less. And if you live in a city, you can earn money by driving your car in the morning and evening, which can help you repay the loan on time.

4. Important Tips Before Buying a New Car

You can be excited to have a new car at your home and drive your family members. What if you don't plan properly, it turns into your nightmare, and whole things mess up. Here goes a few things: -

  • Fix your budget so that you never have to run out of cash to run home.
  • Choose a car model of Alto 800 that your budget can afford it. Don't go if your budget doesn't allow you to buy a top-model Alto 800 car. You can travel on the STD model of the Alto 800 car, which costs you around 3.5 lacs. And you can also opt for a diesel or petrol engine or CNG.
  • Perform thorough research — you can save money and use it for additional maintenance.
  • Secure your finance beforehand so that you won't be overcharged for it by the car dealers. Using a banking portal such as BankBazaar, you compare and check the current interest rates offered by banks and other non-banking financing companies.
  • Go for a test drive before buying it.
  • Negotiate the prices and terms
  • Avoid additional charges and focus on the total price instead of monthly payments.
  • Avoid purchasing any add-ons. 
  • Do not buy an extended warranty with your car because such a warranty does not cover mechanical failures.
  • Do extensive research on the car in the markets, and never make an impulse buy so that you don't regret your decision later.
  • Don't buy a car if you are already paying a loan because it is hard to manage and seriously impacts your monthly income and savings.

5. Conclusion

In conclusion, you can own a car, but you must do extensive research before purchasing it. Take time and make a concrete decision which doesn't lead you to a nightmare of your life. If you follow the steps above, you can buy a car even if you are a salaried person below ₹ 15,000/- per month.

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