How Much Should You Earn To Comfortably Afford Land Rover Defender [Video]
A lot of people today in India are buying the Land Rover Defender luxury SUV. It is known for its rugged and macho looks and its impressive road presence. Now, there are a lot more people who dream of buying this SUV and want to know what they need to earn to be able to afford this SUV. Today, we will bring to you the calculations which will tell you if you can “comfortably” afford a brand-new Land Rover Defender or not.
This video calculation of checking if one can afford to buy a Land Rover Defender has been shared on YouTube by Ankur Warikoo on their channel. It starts with the popular finance influencer Warikoo mentioning that a lot of people today want to buy a Land Rover Defender, so today he will let them know if they can afford one or not.
After which, he mentions that for this example, he is taking the on-road price of the Land Rover Defender as Rs 1.06 crore. He then jokingly mentions that he would definitely not buy this SUV at this price. However, for the people who want to know, he'll go ahead. After which, he then states that for buying a car, a simple rule of 20-4-10 is used.
Following this, he then elaborates that the 20 in this rule stands for 20 percent downpayment. He highlights that for the Defender, the downpayment comes to Rs 21 lakh, which should be already available with the person thinking of buying this SUV. After which, he mentions that 4 in the rule is for the number of years for which the loan is taken on the remaining Rs 85 lakh.
Warikoo adds that the loan will be taken at 9 percent interest per annum, and the EMI for this amount will come to Rs 2.45 lakh. Finally, he then mentions that the last number, which is 10 in the above-mentioned rule, is for the percent of the total income which your EMI should ideally be, which in this case is Rs 2.45 lakh. He then concludes that to buy a Land Rover Defender comfortably, one has to earn Rs 24.5 lakh (after taxes) per month. So that the Rs 2.45 lakh EMI does not cross the 10 percent monthly income barrier as per the rules.
The Land Rover Defender, as mentioned, is one of the most hyped luxury SUVs in the market. Currently, the Defender starts at Rs 98 lakh (ex-showroom) and goes all the way up to Rs 2.41 crore for the Octa variant, which is the most high-performance and exclusive variant of this SUV. The Defender is offered in three main trims: 90, which is the three-door; then there is the 110, which is the standard five-door model; and then there is the 130, which is the extended wheelbase three-row model.
Now that we know that most of us cannot afford the Land Rover Defender, should we check if we can afford the mighty Toyota Fortuner Legender, which is another one of the most popular SUVs in the country? Well, here are the calculations for the same. He starts by mentioning that the Fortuner Legender’s on-road price costs Rs 56 lakh.
So, using the 20-4-10 rule, the downpayment of this SUV comes to about Rs 11 lakh. Following which, he adds that a car loan for the remaining Rs 45 lakh will be taken at 9 percent interest for 4 years, and the EMI for which will come to Rs 1.12 lakh. And lastly, he mentions that Rs 1.12 lakh should not be more than 10 percent of total monthly income. So, by this calculation, the total monthly income required to buy a Fortuner comes to Rs 11.25 lakh per month. Most likely the Fortuner is also out of our budget as well.