Cost of a Car
Thinking of buying that sleak, sexy, saucy red car? Cheap COEs, cashbacks, lower interests and money sitting in the bank earning peanuts. Those sure are good reasons for the buy or are they?
(This is Cost #1 in the The Cost of your Life! series)
Initial Cost of a car in Singapore
BUDGET: Chery QQ (Off Peak Car) approx. SGD$7,999
DESIRABLE: Toyota Corolla Altis approx. SGD$56,988
EXTRAVAGANT: Audi R8 approx. SGD$495,000
There are of course many other cars at various price points, but the examples are to show a clear distinction of the kinds of cars people buy today.
The above is also just the start, let us get down to the details/fine print/scary stuff…
1) Car Loans
Car loans work different from most loans in that the interest charged is always on the original amount loaned. For other loans like mortgages, interest is charged on the outstanding amount owed.
For example, a loan of $50,000 over ten years @ 3.5% interest, the interest is calculated as such, 0.035 x 50000 x 10 = $17,500.
Advice: Take a lesser loan($20-30k), with a lesser interest(<3%) and a lesser period(5-7 years) as much as possible unless you have a business or means to make way better returns than 3%. This will reduce losses when you decide to change a car or when the car is considered a total loss after an accident.
2) Auto Insurance
There are as many as 20 insurance companies that offer car/auto insurance, it is often difficult to get quotes from all of them as dealers and agents have economic reasons for recommending some.
Advice: Check out Regoo where you can request for quotes and compare for yourself which quote is best and save from $100 to $1,000. For me to service you, just key in T09913 in the network agent code at the bottom left of the Get Quotation screen.
3) Parking and ERP
Average cost of this will be $200-$400 a month.
Advice: Try Season Parking and Plan your routes using gothere.
4) Maintenance
Servicing - From simple engine oil changes to brake pad changes, this can cost from $300 to $500.
Petrol - The average cost of this will be approximately $300-500 a month for most drivers in Singapore
Road Tax - This can cost from $700 to $1000+ for most cars depending on Engine Capacity.
Car Wash/Wax - One time charges are $6 to $30 to $80. Packages can range from a few hundred to a few thousand for performance cars.
Tyre Change - Bigger tyres cost more, continental tyres cost more. From my experience, Hankook, Toyo, Goodyear are cheaper. Pirelli, Bridgestone and Michelin are expensive. They can cost from $100 a tyre to $400 for one. Usually when one is punctured, you will have to change 2.
Advice: For information on petrol prices and the best credit cards to use for petrol payments check out Petrolwatch Singapore. Always bargain.
There are many more miscellaneous costs. Sound System, Sound Proofing, V-Kool, GPS and other accessories.
Average yearly costs can run up to:
Car Insurance $1,000 to $3,000
Parking and ERP $2,400 o $4,800
Servicing $300 to $500
Petrol $3,600 to $6,000
Road Tax $700 to $1,000
Total: $8000 to $15,300 excludes yearly interest of $1,750 and depreciation.
Some interesting figures,
Using $15,300 a year @ 3% p.a returns over 10 years, you will yield $180,659 from $153,000 vested. A return of $27,659.27.
So guys and gals, you make the choice. Or if you already have, reduce the damage.
For more information on motoring check out these other links,
sgcarmart - New Cars, Used Cars, Workshops, Services…
one.motoring - LTA Services, Fines, Taxes…
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