Last updated on January 22nd, 2020 at 08:42 am
I was at Automobile Megamart (AML) yesterday with buddy M.
He is a car dealer and one of the hottest models is the Honda Vezel 1.5L (of course…). The current price now for Honda Vezel is around $95k from Parallel importers in 2020 (Do note that there are S and X models). Annual depreciation will be about $9,500 depending on the purchase price.
Assuming we use an average, it will cost you around $27/day.
Jan2020: Latest CEO is still around $35,000.
Fixed costs such as insurance and road tax
From the road tax calculator, road tax is around $2/day assuming it is a normal car.
Motor insurance is subjected to your age, NCD and driving history but lets assume it to be around $2-$4/day (annually $730-$1,460).
This will bring your daily fixed cost of owning a Honda Vezel at around $31-$33/day.
Variable costs such as repair
In my opinion, a brand new car should not see much repairs in the 1st year.
Wear and tear for tires (Around $600 for 4 pieces), car battery ($150) and breaking system parts comes after 1.5years i think. However, we can still conservatively consider these potential costs.
Parts such as air-con, suspension, alternator, radiator etc (which I have changed before) seem to last 3-5 years.
Of course, this is if you diligently do car maintenance which itself will costs around $120-$150 every 6months.
Factoring all these variable costs mentioned, I would suggest an estimate on a daily basis to be around $4-$6/day.
To buy or to rent
Adding the fixed and variable costs together, it would cost you between $35- $39/day if you own a brand new one.
I have pulled out the rental cost from Lion City Rentals (LCR) who seems to be dominating the rental markets currently. Their raw rental cost is $73 NETT/day. They do have discounts and rebates for different packages that could lower this daily cost slightly.
It seems much cheaper to buy then to rent
This is after considering the fixed and variable costs. However, buying a brand new Honda Vezel requires a $40,000 downpayment. According to current motor loan rules by MAS, car loan capped at 60% of the car value.
Do note that if you are keen to invest into properties, a motor loan will be counted against your qualifiable mortgage loan amounts according to the TDSR calculations. Buying a car also means you have taken on a long term liability unlike a car rental which may be as short as little as 5 weeks.
Other usage costs such as parking, fines, ERP and petrol have not been added in yet.
While it is useful to have a family car, it is important to be able to afford it comfortably.
I’ve this story on a family below that may help you understand family cost better. Hope it helps!