Date: Friday, January 10, 2025
Owning your first car is an exciting milestone, symbolizing freedom and independence. However, in Malaysia, the real cost of car ownership extends far beyond the price tag. Hidden expenses can make a significant dent in your finances if not carefully planned. Here’s a comprehensive guide to the costs every first-time buyer should know.
The Purchase Price and Loan Costs
While the car’s price is the starting point, the overall cost increases with hire purchase loans. For instance, a nine-year loan with a 4% interest rate can lead to paying thousands more than the car’s original price.
Take the popular Perodua Myvi, priced at RM55,300. Over time, this vehicle will depreciate by about 40-50% in five years, reducing its resale value to approximately RM27,000–RM33,000. Buyers must consider this long-term value loss when planning their budgets.
Monthly Loan Payments and Down Payments
Securing a car loan typically requires a 10% down payment. For a RM50,000 car, this means RM5,000 upfront. Opting for a higher down payment can lower monthly instalments and interest rates, making repayments more manageable.
However, loan obligations are significant. Before visiting a dealership, assess your financial stability to avoid being pressured into agreements that stretch your budget too thin.
Car Insurance
In Malaysia, car insurance is mandatory, and first-time buyers often face higher premiums. Factors like the car’s engine size, value, and special coverage (e.g., natural disaster protection) affect the price.
For example, insuring a new 1.5L Perodua Myvi may cost RM1,620.75 annually, even after a 25% No-Claim Discount (NCD). Comprehensive coverage is critical for protection against accidents, theft, and third-party damage.
Road Tax
The annual road tax is calculated based on engine capacity. A 1.5L engine car like the Myvi costs around RM90, but larger vehicles will incur significantly higher taxes. Combined with insurance, annual ownership fees can reach RM1,710 or more.
Maintenance Costs
Regular maintenance is essential to keep your car running smoothly. Scheduled servicing every six months or 10,000 km can cost RM200–RM600, depending on the model.
For instance, a 40,000 km service for a Myvi costs around RM558.20, covering engine oil, filters, and labour. Additional expenses for wear-and-tear items, such as tyres and batteries, add to the long-term costs.
Fuel, Parking, and Tolls
Fuel is one of the biggest recurring costs. City drivers of a Myvi might spend RM200–RM300 monthly on petrol, depending on travel distance and driving habits.
Urban residents should also budget for parking and tolls. Daily parking costs range from RM3–RM20, and toll charges can easily exceed RM100 monthly. Illegally parked vehicles may be towed, incurring fines over RM100 to reclaim them.
Additional Necessities
First-time car buyers often underestimate the cost of accessories and extras. Dash cams, for instance, are essential for safety and accident documentation, costing RM150–RM1,000 depending on features.
Window tinting is another must-have in Malaysia’s tropical climate. While some dealerships include it, others charge RM500–RM2,000 based on film quality. Regular car washes, costing RM10–RM30, and occasional detailing services also contribute to ownership expenses.
Is Owning a Car Right for You?
While car ownership provides convenience and freedom, it’s a long-term financial commitment. First-time buyers should create a detailed budget that accounts for all hidden costs. Research financing options, negotiate for the best deals, and consider alternatives like public transport or ride-sharing if expenses feel overwhelming.
Owning a car is a significant milestone, but it’s one that requires careful financial planning to ensure it’s a smooth and rewarding journey.
Source: Malay Mail