Just a couple of months ago, I blogged about my decision to make do with Grab, BlueSG and public transport. Just a couple of days back, my wife and I relented and eventually bought my first car. Unlike many others who mark it as a financial milestone , I didn’t.
It wasn’t because I couldn’t afford a car. Quite the contrary, between me and my wife’s salary, we had sufficient buffer from past savings and our monthly outflow to afford a new car if we wanted to. It was just the fact that I had to sacrifice potential additional savings that could have gone towards my investments.
But I bit the bullet and eventually decided that the daily commute and stress of making daily decisions on getting a Grab or BlueSG was not worth the trouble. It is also more convenient now especially when we have to rush that bit more in the evening to get ready to break our fast after picking up our daughter.
My consolation was that we did our homework properly. I did the numbers and it all checked out – our medium-term goals were not affected, and while our long-term goals will take a slight hit, it would remain on track. We scoured through Sgcarmart to compare models, learn more about all the various acronyms and calculations (PARF, OMV, ARF, road tax computations).
We also agreed on a second-hand COE car for the sole purpose of getting from point A to point B. It would be older but also well-within our acceptable price range. The calculations became slightly easier because there is no need to contend with the expected car body price / scrap value at the end of the COE too.
Eventually, we settled on a 12 year old Hyundai Avante. At $42,400 with 7 years 11 months left, the depreciation came up to about $5,355/year, which was going to be the biggest chunk of the cost of owning a car. But it also meant that we would have seen past the most expensive parts of car ownership when it was younger. Yes road tax, insurance and maintenance steps up with age. So we were made sure that what we were getting was still of good quality, and that’s where my father-in-law who was previously a car mechanic came in. He did all the necessary checks (and I learnt quite a bit from him too) and we were confident that the overall condition of the car was decent for its age. What was also great was that it was single-owner car. But eventually, whether it would last would depend on how much we used the car and how we treated it.
I’m still learning the ropes of car ownership even though I’ve been driving for many years now. But before we could drive away, there were still the processing fees($500), financing costs (i.e. simple interest on the loan), transfer fees ($25), and car insurance (~$1k because we haven’t built up our NCD).
Then there’s the monthly recurring fees:
- (Fixed) Repayment: $696/month over 3 years
- (Fixed) Season parking: $110/month
- (Fixed) Inspection: $70/year
- (Variable) Parking and ERP: $50/month
- (Variable) Petrol: $200/month
- (Variable) Servicing: $600/year
- (Variable) Cleaning: $200/year
That comes up to a monthly total $1,128.50, barring any unfortunate accidents or mishaps that will be result in more money being coughed up. It’ll be interesting to see how accurate I’ve been with my budgeting after a couple of months of paying for all the costs involved with car ownership. I haven’t even looked too hard into our petrol topping up routine , choice of petrol station and petrol credit card.
After thinking it all through, I’m now tempted to turn this into a potential data project to better lay out the various costs, like a ‘true’ car cost calculator of sorts. Is a market out there for this? Or if it’s already being done, then to point me to one such calculator out there?