What Salary Should You Have Before Buying a Car?

Mr. Ba, the familiar motorbike taxi driver at the end of my alley on Tay Son Street, often shares his dream of owning a car. “Driving a motorbike taxi in the sun and rain, having a car to protect my wife and children from the weather would be wonderful,” he says with a gentle smile. Mr. Ba’s story reflects the concerns of many: What salary is sufficient to buy a car?

In this article, Xe Tai Ha Noi will help answer this question and guide you toward the most suitable decision for yourself and your family.

What Salary Should You Have Before Buying a Car?

Buying a car depends on many factors, not just income. However, income is the most crucial factor to consider. So, what income level is “safe” to bring your dream car home?

Factors to Consider

• Total Income: This includes your and your spouse’s income (if applicable) after deducting taxes and insurance.
• Monthly Fixed Expenses: Rent, utilities, internet, tuition, food expenses, etc.
• Disposable Income: The difference between your total income and monthly fixed expenses.
• Financial Goals: Do you plan to buy a house, invest, or save for your children’s education?
• Car Value: Are you planning to buy a new or used car? Will you buy it with a loan or pay in full?

The “Golden” Rule

According to financial experts, the Schuldendienst-Kennzahl (DSK) – an indicator measuring a person’s debt repayment ability – should ideally be around 25%. Applying this to car purchases, you should ensure that the total monthly cost of car ownership does not exceed 25% of your disposable income.

Example:

• Mr. Nam’s family has a monthly income of 30 million VND and fixed expenses of 15 million VND. His disposable income is 15 million VND.
• Applying the formula, Mr. Nam can spend a maximum of 3.75 million VND per month on car ownership (15 million VND x 25% = 3.75 million VND).

Note:

• This formula is for reference only.
• The cost of car ownership includes loan payments (if any), insurance, road fees, fuel, maintenance, and repairs.

Advice from an Expert

Mr. Nguyen Van A, a financial expert at the Institute of Economic Research, shared: “Buying a car should not be based solely on income but requires a clear financial plan. Prioritize buying a car that suits your needs and financial capabilities, avoid following trends to avoid falling into a ‘debt trap’.” (Hypothetical quote)

Car Price List for Reference

Car price list in Vietnam

Note: This price list is for reference only. Car prices may vary depending on the time, version, and dealer.