How much does it cost to own a car?

Singapore government makes owning a car extremely expensive as a move to encourage citizens to travel using their well-maintained public transportation. However, this is almost impossible in Malaysia as many places are inaccessible through public transport. Hence, it becomes a “necessity” for Malaysians to own at least a car for each household. With discounts during festive seasons and cheaper alternatives like Perodua and Proton, most Malaysians start driving at a tender age of 18.

Besides, it is very simple to own a car in Malaysia. All we need is some basic documentation, a low down payment, a hire purchase loan and we are a proud owner! However, it also means that you have also stepped onto a recurring financial treadmill of instalment repayments, fuel, insurance and maintenance. In today’s article, we will be discussing on the cost of owning a car.

 

Monthly Repayment

If you buy a RM 100,000 car, pay a 10% down payment and take a 7-years hire purchase loan, this is the math for your monthly repayment:

Source: Car Loan Calculator

Car Fuel

Fuel is another high monthly recurring expense next to monthly repayment. However, the cost of fuel incurred is very subjective as it is highly dependable on the frequency of driving. We may incur as low as RM200 a month for those who only drive between home and workplace. As for those who drive frequently and even outstation travels, monthly fuel expenses can range between RM500 – RM1,000 a month.

 

Car Insurance and Road Tax

Most cars on the road are within the range of 1400cc to 1800cc. The road tax for specified CC ranges from RM70 – RM280. Here’s a calculator that calculates the cost of your road tax according to your car’s CC. Road tax are relatively cheap. It is the car insurance premium that will cost you. 

Car insurance premium vary according to the market value of your car. For an example, if your car is valued at 100K, you car insurance premium will cost you roughly RM 3,000 (with 0% NCD). Hence, the total cost for insurance and road tax will be approximately be RM3,300 for a year. There’s a silver lining here, if you keep your car for a few more years, this cost will reduce over the years.

 

Car Service

These expenses are unavoidable for all of us as it is crucial to service our car every 6 months or 10,000km, whichever comes first. Therefore, do expect to service your car at least twice a year. However, for those who drives frequently, car experts will recommend to service your car every 3 months or 5,000km, whichever comes first. Hence, the cost of car service will vary depending on your driving frequency.

For local or Japan made car, a normal service will averagely cost you around RM180 – RM250 while a major service will cost in between RM380 – RM560. As for continental cars, a normal service will cost from RM700 to RM1,300 while major services can range from RM2,000 to RM 4,000.

 

Car Maintenance

Another common recurring expenses would be changing of brake pads. As long as you are driving in the city, you will notice that your brake pads wear off very quickly. Although this is not an annual recurring cost averagely, we will need to change our brake pads every 2 years or so, depending on the mileage you clock. To give you a better understanding of the timeline, you’ll need to replace your brake pads every 40,000km to 50,000km. Cost of replacing the brake pads are in the range of RM250 – RM600.

An even more hefty recurring expenses that you will incur is the tyres! When it comes to tyres, it is definitely advisable to get a good quality one to ensure you & your family’s safety while on the road. Tyres are usually required to be replaced after clocking in 40,000km or every 2 years. The cost varies tremendously depending on the size and type of tyres. Let’s take a a more common size which is 15inch rims with a 185/60 profile for example. The cost ranges from RM200 – RM300 per tyre depending on the brand. Hence, changing all 4 tyres will cost you around RM800 – RM1200.

Other car maintenance may vary depending on the wear & tear condition of the car engine, as well as how well you take care of your car. Do expect additional expenses for repair or replacement of engine parts.

 

Car Wash and Polish

Most malaysians will bring our car for a wash at the carwash centre or petrol station for convenience at least once a week. That will cost you at about RM10 – RM12 per week, so that will add up to RM520 – RM624 every year. This cost will be much higher if you send your car to a premium car wash in which will cost you at about RM30 – RM40 per wash. Hence, it will cost you a whopping RM1,440 – RM1,560 per year!

On top of that, in maintaining the glossy paint look of our car, it is advisable for us to polish our car once every year or two. Depending on where we sent our car to, the cost varies from RM300 – RM2,500. Having hands-on experience on the lower and higher range of car polish, I will say the higher priced treatment definitely justifies for its high quality. 

 

Emergency Expenses

It is always wise to apportion a budget for emergency or unexpected expenses such as car accidents, repairs due to wear & tear, flat tyre and etc. Sometimes, these emergency expenses may cost a bomb and therefore, it is always better to be prepared!

 

The above mentioned are the 7 most common recurring cost of owning a car. Do your math and analyse your financial position before committing into a car. Here’s a link to check if you are financially healthy which you can forecast if you are able to commit a new car on top of your current commitments and expenses.