🎵 “Chromed out mirror, I don’t need a windshield. Banana seat, a canopy on two wheels. Eight hundred cash, that’s a hell of a deal!”🎵
We know Macklemore isn’t referring to buying a car but sometimes buying one is just as exciting, especially if the figures on the price tag matches your budget. It started off with surveying new cars from different showrooms and browsing through the vast selection of pre-owned cars from the dealerships. Finally, you found a really decent hatchback for a good price and decide to purchase it.
Just when it seems like everything is done after saying “Yes I’ll take this”, it only marks the beginning of the process of car ownership. Financing a vehicle is a continuous process. As long as you own the car, the things to consider would include insurance, road tax, interval service and maintenance, depreciation of value, and an endless list of things you never thought you need to pay for.
“Sir, you wanna apply your loan from X Bank or Y Bank ah?”
At this point, you will need to make a decision to sell your soul pick either bank with a lower interest rate. In general, interest rates differ when applying a loan for a new car (approximately 2.77%) or a pre-owned car (almost 4%), depending on the tenure period. So if you want to finance your vehicle without forking out a huge portion of your income, you can opt for a longer tenure (up to 9 years) but the interest rate imposed would be higher compared to a tenure of 3 or 5 years. The rates would be quite competitive between banks and you will be spoiled for choices but ultimately, your credit score decides whether you will be given a loan. Think you’re ready to apply for a loan? Make sure you’ve got your most recent payslips in 3 months, a E-KWSP statement (you can request from your bank or print it yourself at self-printing kiosks) and bank account statement as part of your supporting documents before heading to the bank.
Having a credit card of the bank you are applying a loan at would help as it allows them to gauge your financial standing! You’re welcome.
“What is this thing that adds up to 4 figures? Can I skip this part? Is this optional? But I have a personal insurance policy my parents bought when I was a kid.”
No, you can’t skip and neither it is optional. This is the most important purchase that comes in a package with your car and it protects you from any monetary liability, such as accidental injury caused to a third party while operating your vehicle. Assuming that the car you’re going to get is a 1.5 litre compact sedan that has an insured value of RM58,000, the insurance would add up to at least RM1,800 along with your upfront payment. The good news is, the amount of insurance premium decreases along the years and insurance companies reward policy holders if they have not made any insurance claims, which is known as a No-Claims Discount (“NCD”) where premiums are discounted up to 55%.
To help you further plan your budget for your next car, you may check out the insurance premium calculator available at CarBase.my.
“Oil change and a couple of other stuff. That will be $500, sir.”
Interval service and maintenance may cause a little discomfort as you see your credit card getting swiped at the service center every time your car clocks 10,000km on the odometer, but it does help you save more in the long run. Certain cars attract unnecessary and expensive issues but getting your car checked on time may allow mechanics to detect a potential problem and rectifying it before your car completely gives way.
To give you a rough idea, the maintenance cost for a compact sedan would typically range from RM300 to RM700, depending whether it is a minor or major service.
The car isn’t gonna run on H2O
With fuel prices going up more than it decreases, there are many cars in the market that boasts insanely economical fuel consumption. For example, the locally made Perodua Axia boasts a 21.5km/l if you behave yourself by being kind on the accelerator or the Mitsubishi Attrage that boasts a 21km/l fuel efficiency. Since fuel is the second highest cost of car ownership, it would be a smart move to pick a car that is aptly powered and of a lower engine displacement.
“Ok I’m having second thoughts now.”
If owning a car isn’t your priority, there are other alternatives to moving around such as carpooling, public transportation, or ride sharing. While car ownership is the common way to go, car-sharing is an upcoming trend in Malaysia that gives you access to a car without owning one. In short, you pay for what you use. GoCar is a leading car sharing service in Malaysia and renting by the hour costs only RM14.90 with insurance and fuel included. Expanding its services to different part of Klang Valley and Langkawi, you may pick up a car at the city center, Bangsar, Mont Kiara, Kuala Lumpur International Airport, Cyberjaya, Petaling Jaya and Kuah Town.
For more information on how you can drive a car without owning one, follow us on Facebook and Instagram, or simply drop us a message at firstname.lastname@example.org and we can’t wait to be in touch with you.
Till next time!
Edmund C. (@edmundevansc)