Tata Motors’ legendary SUV Sierra has finally been launched in India and tremendous enthusiasm is being seen among the millions of customers waiting for it. With modern design, powerful features and strong presence in the SUV segment, this car is also challenging people’s budget and planning. In such a situation, the big question is that what should be your salary to buy Tata Sierra? The answer to this comes from the famous 20/4/10 rule for buying a car, following which financial experts recommend buying a car.
Tata Sierra Price and On-Road Cost
The ex-showroom price of Tata Sierra is Rs 11,49,000. If you add registration, insurance and other charges, its on-road price in Delhi comes to around Rs 13,44,199. That means a family SUV with a direct impact on the budget.
What does the 20/4/10 rule say?
The 20/4/10 rule for buying a car states that down payment of 20%, loan tenure of 4 years and EMI should not exceed 10% of your salary. Based on this rule, let us understand what your pocket says for Tata Sierra.
How much down payment will have to be given?
There will be a 20% down payment on the on-road price of the Sierra, which means you should have at least Rs 2,70,000 before bringing the car home. After downpayment, your loan amount will be Rs 10,74,199. We assume that you will get a loan from the bank at an interest rate of 9.5%. So accordingly, you will have to pay approximately Rs 26,987 per month on this loan for 4 years.
So what should be the salary?
According to the 20/4/10 rule, your EMI should not exceed 10% of your monthly salary. If the EMI is Rs 26,987, then your salary should be around ₹ 2.5 lakh per month. EMIs on salaries lower than this can put a huge strain on your financial budget.
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