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Here's How Much Your Salary Should Be If You Want To Buy A New Car

Time to assess your current financial situation.
buying a new car

The past year has been challenging: Lives were lost, companies shut down, and unemployment went up. Most people have tightened their purse strings during this time of uncertainty, but even those willing to make big-ticket purchases like cars now find new roadblocks on their way. In September last year, during a virtual press conference, Kia Philippines' president shared that banks are clamping down on auto-loan approvals.

Top Gear Philippines reached out to the Bank of the Philippine Islands (BPI) to ask about car loans during the time of the pandemic. Dennis Fronda, head of BPI Retail Loans, shares that while the basic requirements have not changed, "We have aligned our loan evaluation processes based on the current environment. We took into consideration the jobs, businesses, and industries that were greatly impacted by the pandemic."

Coins and a toy car

The COVID-19 pandemic has taught us to take care not only of our physical health, but also of our financial well-being. So, with the majority of the country still under some form of quarantine, and with mass transportation still limited, it seems like a good time for the average Filipino to consider getting a car, right? But how much should you *actually* be earning in order to afford a brand-new one?

"A gross monthly income of around P40,000 will be enough to sustain the amortization payments on a starter car," says Dennis. "Buyers must note that the stability and reliability of their income sources are just as important as the amount when they're assessing their readiness to buy a car."

So, if you are nowhere near that bracket, step back and assess your finances. Maybe wait 'til the economic situation is better or until your financial health improves. Perhaps you can consider purchasing an alternative mode of transport like city bikes that cost less than P10,000 or even electric kick scooters. You wouldn't want your brand-new car towed by the bank if you end up defaulting on your loan, right?

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