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Car vs property? Well, car ownership do mean something, luxury one please.

Posted in Personal Finance

I love both properties and cars. Both are important if you ask me. One to make sure we are okay in the future (investment), when the prices of the property goes up. One is to tell people that we are doing okay; we could afford to drive since toll, petrol and parking will still cost hundreds of ringgit per month if we happened to stay in Kuala Lumpur. We have no yet included the typical maintenance yet. Anyway, I also do not think my wife fancies bringing my two kids to nursery every morning via GRAB or even the MRT. Of course if either of my two cars (my wife drives an Exora, I drive a Persona) give me problems, I will change that particular car in 48 hours. Haha. Okay, let me be frank, I cannot be changing to a new Segment D car immediately but I think a second hand one is still possible. Nope, I would not want to drive a BMW and having to eat bread every evening. My Home Minister would not approve too… (Too flashy…)

If the question is why didn’t I buy a more expensive car, well the answer is simply, ‘I could not afford loh. Well, if we really check all the cars in the market, I actually did not buy the cheapest Segment B car or the cheapest MPV lah, okay. 😛 )  However, my situation may only be applicable for Malaysian professionals. Actually, many non-managerial friends of mine already drive a Honda Civic which meant that this is not considered a ‘luxury’ car anymore. Perhaps the minimum car under the ‘luxury’ category should be a Camry? Or Teana or even Accord? Or should we put the benchmark higher? Audi / BMW / Mercedes? Applicable only to Malaysia lah because in Singapore, owning a car is a super huge thing. Even if that car is an entry-level 1.6 litre model. Let’s not even talk about the colour of the plates yet yeah. Both require substantial investments anyway even if in Singapore, even the colour of the plate would make a huge difference. Reported in channelnewsasia.com is ‘How much it really costs to own a car in Singapore’

This is one of the paragraph inside the article: “Owning a car in Singapore, even an entry-level model, is a signal that you’ve finally arrived in the world. But it also means that you’ve also stepped onto a recurring financial treadmill of instalment payments, fuel, insurance and maintenance bills.”  Based on the calculations provided inside the article, the cost to own an entry-level 1.6 litre car is around S$1,600 per month. Frankly, not that super expensive since Singaporeans are earning S$ anyway. However, the S$1,600 also meant that the buyer needed to pay 30 percent downpayment for that S$100,000 (RM296,000) entry-level car. That’s S$30,000 of cash, first. Just for comparison, the lowest variant of a Toyota Camry is S$150,000. (RM444,000) The Certificate of Entitlement (COE) which is included into the car price is currently around S$40,000 (This is considered on the low side since market is a little weak. Do read here for the full article in straitstimes.com  Why is the COE considered on the low side currently? Here’s one Full article for reference. 

For Malaysians who own cheaper cars like me, it’s okay. Our good friends would not mind anyway. As for our ‘enemies’, unless they are driving a minimum Segment D car, we can still tell them that we are almost the same lah. That extra RM30,000 that they paid, over 9 years is only extra RM300 per month lah. So it’s more of a choice rather than affordability even when your car is more expensive than mine by RM30,000.  However, one thing is very important. Regardless of the car we drive, make sure we OWN a home for us to park that car. If we own TWO cars, it would be better to own MORE than two homes. 🙂  We must also be savvy to the fact that regardless of the car brand that we own, it depreciates every year. Meanwhile, as long as our property is not something ‘extraordinary’, it usually appreciates in value every year. Nope, not because it looks awesome but usually because everything else is going up. Cost of land, labour, machines and even building materials. Happy comparing and driving the car you love and parking it in a house you bought and not rented.

written on 21 April 2018

Next suggested article:  Interest rates still high and EPF is needed to buy property

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