Find out here if you can afford the bike or not on your current monthly salary
Royal Enfield had recently launched the Classic 650 in India. It is the only heritage-themed motorcycle in the 650cc segment, and looks absolutely desirable. As of now, it is priced at about Rs 3,99,800 on-road Pune (price varies with city, state, and dealer).
Now that we’re in April, you may have gotten your appraisal or could be getting it soon. So, some of you might be thinking about buying a new bike in the coming weeks, particularly the just-launched Classic 650. But before you proceed further, you need to have an idea on how much you must earn so that you can comfortably pay for the bike, especially if you take out a loan.
BikeDekho Says
You should be able to afford the Royal Enfield Classic 650 on loan if your in-hand monthly salary is at least Rs 50,000. That said, we would advise you to have some extra amount set aside to spend on fuel, accessories, riding gear, and maintenance costs. More details on how we arrived at this in the forthcoming paragraphs:
Loan Amount
Let us calculate how much loan you can take based on the monthly salary categorised to Rs 20,000, Rs 50,000, and Rs 1,00,000. A golden rule to keep in mind when making big purchases is that the EMI should not be more than 15% of your monthly salary. Let us consider the most common rate of interest for a vehicle loan, which is 9% per annum, and a loan tenure of five years (60 months).
Down Payment
As mentioned earlier, the on-road price in Pune for the Classic 650 is Rs 3,99,800 after adding insurance and RTO registration charges to the ex-showroom price of the motorcycle. The down payment at 10% value of the total on-road cost for the bike comes to Rs 39,980.
EMI Calculation Formula
P x R x (1+R)^N / [(1+R)^N-1] where:
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P = Principal loan amount
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N = Loan tenure in months
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R = Monthly interest rate
Folks who are not fans of math, do not worry, as we have an EMI calculator – where you can simply enter the various parameters and get the final amount. The total cost of the bike after the five-year loan adds up to about Rs 4,89,980.
Rs 20,000
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For Rs 20,000 monthly salary, the maximum EMI possible is Rs 3,000 (15% of income).
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Based on the EMI formula, the loan amount that can be borrowed comes to Rs 1,87,000.
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Including the down payment, it will be Rs 2,26,980.
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This amount is quite low in comparison to the cost of the bike.
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So, this income level is not enough to pay for the motorcycle.
Rs 50,000
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For a monthly income of Rs 50,000 – the EMI that can be taken is Rs 7,500 (15% of salary).
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Based on this EMI level, the maximum loan that can be taken is Rs 3,61,300.
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If the Rs 39,980 downpayment is also added, the loan amount adds up to Rs 4,01,280.
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This amount is almost exactly what you need to buy the bike – actually Rs 1,300 more than you need.
Rs 1,00,000
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For a Rs 1,00,000 monthly salary, the highest EMI you can take is Rs 15,000 (15% of salary).
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And, the highest loan amount that can be managed is Rs 7,22,620.
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Adding the down payment to this – the total would come to Rs 7,62,600 – more than enough to fund the entire cost of the Classic.
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A loan would not be required with this monthly income, to be honest.
|
Monthly Income |
EMI (15% of income) |
Loan Amount You Can Afford (5 years, 9% interest) |
Total Loan + Downpayment |
Is It Enough for a Royal Enfield Classic 650? |
|
Rs 20,000 |
Rs 3,000 |
Rs 1,87,000 |
Rs 39,980 + Rs 1,87,000 = Rs 2,26,980 |
Not enough |
|
Rs 50,000 |
Rs 7,500 |
Rs 3,61,300 |
Rs 39,980 + Rs 3,61,300 = Rs 4,01,280 |
Just enough |
|
Rs 1,00,000 |
Rs 15,000 |
Rs 7,22,620 |
Rs 39,980 + Rs 7,22,620 = Rs 7,62,600 |
More than enough |
Important Note
Before getting a loan, always make sure that you can afford the repayment without financial strain. Also, be sure that your source of income is stable for as long as the duration of the loan is, at the very least.
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