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How to save a lot of money? Over RM200,000 every 21 years without much effort?

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One word. Car. How to save RM200,000 every 20 years?

Need that first car for the first 7 years?

We have just started working not too long ago and now we need a car just to drive to office because we do not want to take the public transport. Well, a Proton Persona 1.6 (RM45,000) can do that quite well. Drives better than the next car after this too. Below image is from Proton and true as at 5th June 2021.

If Proton is not your cup of tea and Perodua is, then this car can save more on fuel cost every month. Perodua Axia 1.0 (RM32,000) will enable you to drive 15km per litre of fuel. Below image is from Perodua and true as at 5th June 2021.

If we do not mind a second-hand car, a second hand Proton Persona Elegance of 8 years could be that choice. I drive the same model and mine is 11th year this year. By the way, my power-window is still an original set. Image is from Mudah.my and is true as at 5th June 2021.

Not everyone likes national brands or even a secondhand car model. They may prefer a Japanese branded one because this gives that extra feeling of success especially versus the peers who were still driving a national brand or even a secondhand model. The two most successful and popular new car models include Toyota Vios (base model is RM75,000) and Honda City (RM74,000) and to a lesser extent, the new Turbo engined Nissan Almera (RM80,000). (This is the model I like most out of the three)

What happened after 7 years? What was the savings in the first 7 years?

Assuming we bought a RM75,000 car versus a RM33,000 one, we have saved RM42,000 just from the price alone. We skip all the interest we need to pay even if we know this will be higher for a higher priced car. If we decided to buy a secondhand car instead, then the savings could have been RM55,000. The secondhand car can be even cheaper than the Persona which was RM19,800 but if we just use this as a guide, then RM75,000 minus RM19,800 is around RM55,000.

What happens if we change our car after 7 years?

After working for 7 years, surely our income would have grown and surely we would prefer to get a Segment C car instead. Segment C cars would be cars like Toyota Altis 1.8 (RM129,000) or Honda Civic 1.8 (RM109,000). There are no longer any Segment C cars from Proton and Perodua does not offer any Segment C car. We could of course also opt for a Segment B SUV such as Proton X50 1.5 turbo (RM79,000) or a Segment B SUV such as Perodua Aruz 1.5 litre (RM68,000). No rewards for guessing which of these two SUVs are more powerful yeah.

For someone who did not change their car and continued to drive, they would have saved RM68,000 for a new Aruz all the way to RM109,000 for a Japanese Segment C car. However, if they prefer to buy a new Perodua Aruz and not a Toyota Altis, then they have saved RM61,000 just for the car price alone. New cheaper car versus new more expensive car.

What happens after the second set of 7 years?

We have now worked for 14 years and we are now thinking about our 3rd car. Surely we are now at the Segment D / Luxury car level? For example, Honda Accord 1.5 Turbo (RM189,000) or a Toyota Camry 2.5 (RM189,000). Alternatively, a Segment C SUV such as Proton X70 (RM90,000) or a Honda CRV 2.0 (RM139,000).

If at this point, instead of national brands, we decided to buy a Segment B Japanese model (Vios / City) instead, then the price is around RM75,000. Compared to a Honda Accord or a Toyota Camry, one has just saved RM114,000. If compared to a Honda CRV 2.0, then the savings is smaller, RM64,000.

What has really happened after 21 years?

If we bought 2 national cars; cheapest Axia first and then a slightly better Persona followed by Nissan Almera we would have spent the following: RM32,000 + RM45,000 + RM79,000 = RM156,000.

If we had bought a Japanese Segment B car, followed by Segment C car and then followed by Segment D car, we have spent RM75,000 + RM109,000 + RM189,000 = RM373,000.

Total savings with these three cars over a period of 21 years? RM373,000 – RM156,000 = RM217,000.

If we purchased just 2 national cars over this period of 21 years and drove both cars for 11 years instead, then the savings would have exceeded RM300,000.

What’s so significant about the savings anyway?

The savings could have been invested into other investments. This would have given us even more returns. It could have been down-payment for properties. Perhaps we could have upgraded the place we stay and then rent out the first property. It could have been capital for starting a business. In fact it could have been many other things and even include expenses such as travelling… or buy gifts for your loved ones and more. This is why just looking at what car to drive would have allowed us to decide what could have happened in the future. To be exact, 21 years later.

How much did I actually save from my own car experience?

I am a very lucky man. If we look at the first 21 years of my working life, for the first 10 years, I drove the Nissan Sunny from my father. I drove it until 450,000 km. After this Nissan Sunny was sold, for the next 11 years (including this year and until currently), I have been driving that Proton Persona Elegance 1.6 MANUAL which I can safely tell you I like it very much versus any automatic car. Was I tempted to buy a quieter, more comfortable, bigger and more powerful car? Of course! I am a man who loves cars. However, I do not have the funds to do so as I have invested all those into something else… including 31 pairs of shoes too.

So, in total, I have just spent RM50,000 for one car for 21 years. In other words, I have saved even more than all the numbers mentioned above. This was how I could accumulate the necessary downpayment for properties. This also helped me to travel to countries such as Japan (many cities beyond just Tokyo), Australia (many cities beyond just Perth), Hong Kong and many more many times. The downside is that I am still driving an old car. Sigh…. and Smile. 🙂 Happy deciding. This is not to tell you to follow me. This is just to show you the numbers. Cheers.

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