Can you afford a car based on your current salary?

As the years go by, the problem of increasing traffic in Metro Manila grows steadily with no comprehensive solution yet discovered. As such, many commuters have opted to buy their own car or motorcycle rather than fight for public transport places on their way to work or their return trip home. However, the question remains: can you afford a car based on your current salary? Having a car can free you from the hustle and bustle of public transportation, such as lining up at pickup stations while carrying your weekly groceries or standing in the crowded aisle of a bus. Cars allow you to carry more passengers and luggage, and can protect you from the harsh rain. However, this freedom comes at a price. Have a look below to find out what kind of car you can afford.

Getting your first car

While most prospective car buyers are deterred by emotional factors (such as the shift of driving a car instead of hiring a taxi cab), Carmudi PH has delved  into the numbers and found out that it does not cost a fortune to get your first car. We have taken one of the cheapest cars in the Philippines- the Hyundai Eon, whose brand new base variant costs P438,000. This mini hatchback is not only affordable, but it is already equipped with decent features such as front power windows, a driver airbag and keyless entry. During its July 2014 promo, Hyundai offered customers a low P57,000 all-in down payment with a monthly payment of just P8,671 for 5 years. It was also offered via a STRETCH program where the down payment could be paid in a 10 month instalment plan at P6,384 per month.

Could you own a more expensive car?

If you happen to be earning more than the payment requirements of the Eon, you could also opt to purchase a more expensive car. For this, we used the Car Purchasing Tool from SMEtoolkit.org. Say I saved P70,000 for my down payment and could shave away P10,000 monthly for my car payments (via loan or my personal money)- the tool suggests that I could have a car with a price range of P492,000 (if I opted to use financing options from the car dealer) to almost P600,000 (without loans). Note that these calculations are based on the average 9% interest of car dealer loans and a 12% sales tax in the Philippines.

What car could I buy?

Given the figures above, we ran through our  listings using the amount filter and found these results: Although the search revealed some used or second hand cars, most of the cars are less than five years old, which means they are most likely still in good shape. Depending on your preference, owning a car need not be expensive.