General, Research, Technology

How much salary should a car cost?

While coronavirus wanders the planet, mostpeople (I hope so) are sitting at home. And although the economy should work while half of the people oppose preventive measures, the question of removing self-isolation measures is still a blurry distance. Recently, I often see information that automobile concerns suffer billions in losses due to lack of sales. It’s possible that few people rush to buy cars after a pandemic, but let's figure out how much a new car should cost from an economic point of view, and what you can afford in new reality.

From small to large. Let's count

Since I like to compare numbers and analyze data, this is what we will do today. 2 articles haunt me, so I’ll probably start with them. According to auto expert Dmitry Popov:

I guess a B-class sedan should cost20-25 salaries. In my opinion, you need to buy a car on credit without a down payment, so that you can pay off this loan in about three years. All financiers and economists say that a credit strategy is reasonable when it is no more than a third of all human income.

And here is the opinion Head of the Federation of Car Owners of the Russian Federation Sergey Kanaev:

World practice says it's about 2-3of the year. The car is changed every three years. For this reason, the warranty periods of car dealers are the same, and everyone understands this. Three years, the car was changed. This is if the world, but we have a slightly different situation.

Should I take a car on credit?

All in all, these 2 opinions complement each other. The only thing is Kanaev is against loans and says that the necessary amount for a car just needs to be postponed from the salary: 20,000 to 30,000 rubles each to buy a new Chinese SUV or a simple foreign car.

SUVs - These are modern off-road cars for city driving, gaining popularity.

It seems to be folding, but I did not understand a bit who their schemes were designed for. To the middle class? In my opinion, that middle class, which is imagined by 90% of people, does not coincide with reality.

Increase income, or is something else hidden here?

In all this, I am confused by several points, ohwhich I would like to talk further. Western experts have indeed deduced several economic trends for buying a car. Most recognizable: rule 20/4/10 and rule 10 years. What do they mean: the first installment should be equal twenty%such loan is paid maximum 4 years and a maximum of 10% of total revenue should go to transport costs. The transportation costs here are loan payments, gasoline and insurance.

But the cost of gas to get to our channel in Google News is not. Just follow the link.

The minimum cost of the new Lada Vesta fluctuatesin the region of 600-650 thousand rubles. And now I consider according to the international norm: having made 120 thousand down payment, I take 480 000 on credit, let's say at 9% for 3 years. If you do not even take into account the interest, it will turn out monthly at 13,000 rubles.

Popov claimed that 20-25 salaries are 600,000rubles. That is, the salary is equal to 30,000. Kanaev said that it was necessary to save 20-30 thousand in order to accumulate the amount equivalent to the new Chinese SUV over 3 years. It turns out, there are two conclusions: either you need to earn at least 130,000 so that everyone can afford a new Vesta, or you need not to eat 20-25 months to buy a new car and fit into the framework of 3 years.

Most likely, Popov didn’t mean exactly 3years when I talked about credit, but if it comes to 10 or more years, is the game worth the candle? I don’t know how to pay for a car for 10 years, but reading cool news on our Yandex.Zen channel is always worth it.

How profitable to buy a car?

I can’t name the crowd among my friendspeople who can save 30,000 rubles after all expenses. And those who earn 24-30 thousand rubles a month do not prefer the new Lada Vesta, but the old VAZ-2107 as a garage toy and a car for every day. In general, some incomprehensible statement comes out. Add here snobbery, which is common enough, and I don’t understand at all who is buying the new Vesta. I’m not such a hater of AvtoVAZ, but somehow I like the old “Japanese” for 600,000 rubles. On an unmanned car is not enough.

If you earn only 30 thousand a month,it turns out like this: your maximum spending on transportation costs is 3,000 rubles. From here for 4 years without interest, you will need to return 144,000 rubles. Provided that 144,000 is 80% of the cost of the car, the real value of the car will be about 180,000 rubles. This is not Vesta, but rather the VAZ-2114 in good condition. In this case, the car will not be a heavy burden. Otherwise, either earn more or stretch the purchase for many years, but do not forget that in this case you face the risk of additional expenses if the machine is completely broken or dry out over time.

By the way, since we are talking about time, I’ll immediately tell you about the 10-year rule that I mentioned earlier. In a nutshell: if you want to extract maximum benefit from the car, then when buying a new car, it should serve you for at least 10 years.

Appreciate your time

I did not pursue the goal of lowering the sales of this oranother car, and showed his calculations taking into account Russian reality. And then you have to choose. You know your RFP, you have a formula. What is more important for you: a momentary luxury for which you will pay with your time, or a life of finance?