How to Afford and Maintain a Car on a Monthly Income of 15 Million VND
The saying “a car is just a luxury item” has become outdated, especially for those who use it to make money or for business purposes. In today’s car market, there are plenty of options to consider, with flexible prices that cater to every need and usage preference.
Financial leverage, such as credit card installment plans or car loans from financial institutions, has made it easier than ever for consumers to own a car. This means that even someone with a monthly income of 15 million VND can afford and sustain a car.
Making a Saving Plan
In 2019, Mr. Nguyen Huy Trung, a resident of Thanh Xuan, began saving money from his income with the intention of buying a car. By saving around 4 million VND per month and receiving year-end bonuses, he managed to accumulate approximately 160 million VND by 2023. Additionally, he borrowed an interest-free sum of 40 million VND from a family member and obtained a car loan of 100 million VND from a bank.
With a budget of 300 million VND, Mr. Trung opted for a used car – a 2018 Honda City with four seats. The new model was priced at 620 million VND in 2018, but this specific financial plan and the chosen car suited Mr. Trung’s personal needs and financial situation.
To manage his debt of 100 million VND, including interest, Mr. Trung developed a clear repayment plan. He continued saving 4 million VND per month, like in previous years, while also using the car for ride-hailing services during evenings and weekends. These additional earnings helped offset the interest payments and other expenses associated with using a car, such as insurance, car maintenance, and vehicle inspections.
According to Mr. Trung, maintaining a car requires an additional monthly expense of at least 3 to 4 million VND, along with a relatively small debt compared to his income. However, the car serves as a motivator for him to increase his income and explore side job opportunities.
Financing Options
Ms. Nguyen Thanh Huong, a bank employee, suggests that those interested in purchasing a car through installment plans should thoroughly research and compare interest rates offered by different credit institutions and car manufacturers. It’s important to consider four key financial factors: stable monthly income, living expenses, loan repayment capacity, and overall monthly car-related expenses. By taking these factors into account, individuals can make informed decisions regarding the type of car and its price range. This approach helps prevent financial burdens that might arise from purchasing a car.
Furthermore, Mr. Pham Xuan Thang, the owner of a used car dealership in Cau Giay district, Hanoi, explains that cars are prone to depreciation. Within two years, the price of a new car can decrease by one-third to half its original value. Additionally, car manufacturers often offer discounts and promotions at the end of the year or the beginning of the new year. Both used and new cars have their own advantages and disadvantages. When purchasing a used car, it is essential to thoroughly research its history and condition. Seeking advice and getting a professional inspection before buying is highly recommended. Apart from personal financial circumstances, the purpose of using the car should also be considered. Therefore, it is crucial to become an informed consumer, especially since, for many people, a car is the second most significant asset after real estate.
Looking ahead, Mr. Trung plans to pay off his car loan within three years, all while maintaining his additional employment as a ride-hailing driver. By implementing this strategy, he will be debt-free and ready to explore new opportunities to increase his income.