How Much Car Can I Afford?

One of the most common mistakes Indian car buyers make is picking a car they like and then figuring out how to pay for it. The smarter approach is to determine your budget first, then find the best car within it.

The 18% EMI Rule

Financial advisors in India recommend that your total car-related EMI should not exceed 15–18% of your monthly take-home income. This leaves enough room for savings, emergencies, and other investments.

Step-by-Step Budget Calculation

1. Calculate your net monthly income after taxes and deductions
2. Subtract existing EMIs (home loan, personal loan, etc.)
3. Subtract monthly fixed expenses (rent, utilities, groceries)
4. Apply the 18% rule to your gross income for max car EMI
5. Use the Car Affordability Calculator to reverse-engineer the car price

Don't Forget Running Costs

Car ownership in India costs significantly more than just the EMI. Budget for:

• Fuel: ₹3,000–12,000/month depending on usage
• Annual insurance: ₹10,000–50,000
• Maintenance & service: ₹1,000–3,000/month average
• Parking and tolls: ₹1,000–5,000/month in metro cities