Who Can Afford a MyVi?

I've been an owner of Peroua MyVi for more than 2 years now. What I'm going to analyze is the costs associated with owning a car particularly MyVi.

Car price = RM47,708.60
Deposit = RM5,015.80
Insurance = RM1457.20
Vehicle registration = RM150
Loan Amount = RM44,300
Interest (4.10% for 7 years) = RM12,714.10
Total loan by bank = RM57,014.10
Monthly installment = RM679 for 84 months

1st service @ 1,000km = RM214.15
2nd service @ 5,000km = RM105.95
3rd service @ 10,000km = RM108.25
4th service @ 17,000km = RM210.95
2nd year insurance premium = RM1,022.04
5th service @ 23,000km = RM368.85
6th service @ 30,000km = RM112.95
7th service @ 37,000km = RM126.80
3rd year insurance premium = RM749.65
8th service @ 44,000km = RM118.10
Total basic costs incurred for 2 years (24 months) = RM3,137.69
Cost per month = RM130.74

Average monthly petrol consumption = RM300

Total monthly spending for a MyVi = RM1109.74

As a rule of thumb, the monthly installment must 33% or lower of the borrower's gross income to qualify him/her for the car loan. So, in this instance, the borrower gross income should be at least RM3363.

The costs given above are the most basic ones. This does not even include the normal costs of owning a car such as parking fees, tolls, car wash, tyre balancing etc. This does make me wonder why on earth people do own cars, in my terms "they can't really afford"?

Whenever you plan to buy a car or change your old ones, do bare in mind the associated costs involved. I suggest as a rule of thumb, on top of your monthly payment, do factor in another 63% for the associated costs as per the example above. With that, you should know what kind of cars you can afford.

This might sound unfair to car enthusiasts. But I do think spending too much on feel good items such as cars is just a waste of money. It is not even an asset. It will always drain money out of your pocket. So why bother invest in such an item that will depreciate in value as soon as you own it? Always consider practical factors such as your affordability, safety, size and fuel consumption when deciding on a car.

Choose wisely