Buy a car, lose a potential property?! How is this possible?

Buy a car, lose a potential property?! How is this possible?

Let’s start by looking at the differences in downpayment and also the monthly repayment for different cars. Then, we can see why a car could mean losing a potential property too. We assume everyone below are earning similar incomes and perhaps 10 years after they have started working, they may want to buy a house. In other words, downpayment of 10 percent is needed.

6-figure car shows status and achievements

All the calculations come from carbase.my

RM100,000 is a lot of money and it represents a certain level; status and achivement. It’s the 6-figure level. So, those who have reached this level are people who already earned enough money for the bank to approve their want for a car which not everyone could afford.

Repayment is RM1,300 so the person should preferable be earning a net income of RM4,000. This should be minimum and the person should have any other debts. Else, maybe the bank will not approve this loan application. Banks are worried and they also know that if they take back your car to auction, it will not give them enough to cover their loan. By spending a lot more on car, the amount of savings which this person could save will be minimum unless they rent a very cheap place…

Cheapest foreign branded car still mean something, right?

Sometimes we may feel the pinch if it’s a 6-figure car. So, maybe not the 6-figure but a foreign branded car instead. When I say foreign branded car, I am thinking Japanese brands yeah. They are the cheapest available foreign brand which will not kill anyone when it comes to maintenance. So, if one buys this level of car, they can feel that they are ahead of their peers. After all their peers could only be driving a local brand.

Grass is always greener one the other side you see. Japanese have made cars for such a long time, surely they are better. Surely paying extra should mean something? If we buy at this level and we compare to the 6-figure car buyer with the same salary as us, we could save RM260 per month or RM3,100 per year or RM31,000 per 10 years. Oh… enough downpayment for a RM300,000 home! 10 years later. Not bad. Can aim for affordable home 10 years later.

I no need fame, no need ‘face’, just need a NEW car to get me from A to B

Some stingy guy may say, no need face lah. My money is mind, I do not spend to show off to others. My good friends won’t mind the car I drive anyway. If we are able to think at this level, in 10 years, it is very highly likely that the property we stay in would be bigger and better than the ones who earn the same amount of money but bought a much more expensive car instead.

With this amount, one could buy a Proton Saga and well, it’s a new car but it’s a local brand. So, the prestige of 6-figure car, the branding of a foreign branded car would all be non-existent. Losing face could be the consequence. Sad now? If sad, move back up to the above two choices. Else, continue reading. The only thing we can still lay claim to is that this is a NEW car and I am not driving a second-hand car… Haha.

Monthly wise, driving this car saves up to RM794 per month or RM9,528 per year or RM95,000 in 10 years. This is enough as downpayment for a RM950,000 home if one wishes or a cheaper home but more expensive than the RM350,000 affordable home category. Issue is… people may not see since they may not visit your RM950,000 home lah. Haha. Remember, the one who should enjoy is you! Not anyone else.

We must respect everyone’s choice, that’s what makes the world so vibrant

If everyone buys a Saga, it’s such a boring world. Then, all car companies would just produce affordably priced cars. Very boring lah. If everyone saves for a property in 10 years, demand will be too high and prices could rise faster. Better not lah. If people needs the respect from the car model they drive, we must respect their thinking too. After all, we could be thinking the same too!

How many of us think someone who drives a Proton Saga could be earning the SAME PAY as someone driving a 6-figure car? Actually, we would think people are driving a Proton Saga because they could only afford a Saga… If they earn a higher salary why just drive a cheap car? So, if this is how we think, then why blame people for spending more money to make us think highly of them? Haha.

Oh… this is why we lose that potential property opportunity

This is why if we bought a very expensive car, we may not save enough for a home downpayment and of course we would lose the potential to buy a property in the future. Thoughts to ponder. Happy deciding and I have friends who have different financial sense from me. They still think highly of me and I still think highly of them. The above is merely a statistical sharing. Nothing more. Cheers.

Oh yeah, do you want to buy a SUPER CHEAP EV instead? Here’s that chance too. Read here.

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