How much should you earn to buy a car in the Philippines?

The past year has been difficult: lives have been lost, businesses have closed, unemployment has risen. Most people have tightened their purse strings during this uncertain time, but even those willing to make expensive purchases like cars are now finding new obstacles in their way. In September last year, during a virtual press conference, the president of Kia Philippines said that banks were restricting automatic loan approvals.

We reached out to Bank of the Philippine Islands (BPI) to ask about auto loans during the pandemic period. Dennis fronda, Head of BPI Retail Loans, shares that while the basic requirements have not changed, “we have aligned our loan appraisal processes with the current environment. We have taken into consideration the jobs, businesses and industries that have been severely affected by the pandemic. “

The COVID-19 pandemic has taught us to take care not only of our health, but also of our financial health. So, with the majority of the country still in a form of quarantine, and with public transportation still limited, it seems like now is the time for the average Filipino worker to consider purchasing a vehicle, right? But how much should you earn to afford a brand new vehicle?

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Continue reading below ↓

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“A gross monthly income of about 40,000 P will be enough to support depreciation payments on a starter car, ”says Fronda. “Buyers should note that the stability and reliability of their revenue stream is just as important as the amount when assessing their willingness to buy a car. “

So if you are far from that range, take a step back and assess your financial situation and maybe wait until the economy improves or your financial health improves. Or maybe try to consider purchasing an alternative mode of transportation like city bikes that cost less than P 10,000 or even electric scooters. You wouldn’t want your brand new car to be towed by the bank if you end up defaulting on your loan, right?

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