Knowing Your Budget !

How much should you spend on your car purchase ? Knowing your budget, is a good start to have your buying journey as smooth as possible.

As your budget is the key, which leads you to take right decisions on what car you should be targeting for.

There may be a small flexibility possible on your budget, however, if your budget is set right you will find it much easier to focus on your desired car.

How to estimate my car budget ?

Here is a simple calculation for you.

π˜πŽπ”π‘ 𝐁𝐔𝐃𝐆𝐄𝐓 = πƒπŽπ–π ππ€π˜πŒπ„ππ“ + 𝐓𝐑𝐀𝐃𝐄-𝐈𝐍 𝐂𝐀𝐑 𝐕𝐀𝐋𝐔𝐄 + 𝐏𝐋𝐀𝐍𝐍𝐄𝐃 πŒπŽππ“π‡π‹π˜ πˆππ’π“π€π‹π‹πŒπ„ππ“π’ (π„πŒπˆ) + πŽπ“π‡π„π‘ πŒπˆπ’π‚π„π‹π‹π€ππ„πŽπ”π’ 𝐄𝐗𝐏𝐄𝐍𝐒𝐄𝐒

To better understand this let us take 2 buyers and arrive at their budgets as shown in the attached sheet.

Firstly, the total cost of your vehicle is not only the tag price alone.

You should also need to account for VAT, Insurance premium, registration fees.

Moreover, you need to keep provisions for any other optional items, like extended warranties, accessories or add-ons. These should be accounted for as other miscellaneous expensesΒ while arriving at your budget.

If you are uncertain on these unexpected other expenses, it is advisable to keep some provisions at this stage.

Budget Plan Car Purchase

What gets evident from the budget calculation sheet is that the buyer A should focus on various car options within a budget of AED 37,000.Β 

On the other hand, buyer B has a much more flexibility of around AED 138,000.

Therefore, it is futile to get attracted to a car which is out of your reach. You will be able to save on your time and energy by staying around your budget.

Alternatively, if you are on a tight budget, you may even consider buying a used car too.

Hope this article helps you to arrive at the budget for your dream car. If you have a different method to calculate this figure, You are most welcome to share your suggestions or advice for helping fellow buyers to estimate their budgets.

An article by Omar Shariff, Deputy Middle East Editor in Gulf News explains options to buy 5 most reliable cars for Dh 10,000 in UAE.

Calculate Your Car Budget by filling in your variables here !

Budget Calculator
Budget Calculator


Down Payment – The initial payment you plan to make for a finance deal – preferably it should be around 20% of the total cost of the car.

Trade In Car Value – The value of your previously owned vehicle, if you plan to either Trade In with the same dealer or plan to sell yourself elsewhere.

EMI – Your monthly planned installments you are comfortable with, preferably should be around 10% of your gross income.

Tenure – No of months you are planning to pay back your loan, preferably up to 48 months, to save on interest. Lower the better.

Miscellaneous Expenses – Consider any other possible outflow of money in the form of VAT, Bank Interest, Registration Fees, Insurance, Accessory Fitments, Body Paint protection, Glass Tinting etc.


So Now you know your car Budget.

Shall we then move on to the next step and identify your mobility needs…………

Still having some doubts. No worries…. leave your comments in the Comment Section and let’s try addressing them too…..

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