How Much Does It Cost To Own A Car?

Malaysians often complain about the high prices of cars in the country due to excise duties. KL has been reported to be the fifth most expensive city to buy a new mid-size car compared to 54 other cities in the world.

However, according to the same report, we come in as the fourth cheapest when it comes to gasoline prices. Despite the high cost of the car, Malaysians seem to be on a good streak when it comes to owning a car, as the number of Malaysians using vehicles is expected to increase 1.4 times to 31 million by 2030 .

If you are looking to buy a car soon, it would be wise to do your research on the exact price of a car. The cost of owning a car is not as simple as paying your car loan, but it also involves the cost of daily operation of your car.

The total cost goes beyond its purchase price if you consider personal expenses such as gasoline and insurance, plus the loss in value of the car over time (depreciation).

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Consider the true cost of ownership of a Proton Persona 1.6 CVT Executive at RM54,600 for five years.

1. Financing

Unless you started saving the day of your birth just to buy a brand new Proton Persona, you will likely need to get a rental loan to buy a car in Malaysia.

If you follow the usual route, you will have to pay 10% of the car price and the rest of the 90% will be funded. Here’s how much you’ll have to pay in interest over a five-year period:

Interest rate: 3%

Duration of mandate: 5 years

Monthly payment: RM941.85

Total interest over the life of the loan: RM7371.00

* The calculation is based on the Proton car loan calculator

With a maximum loan term of nine years, car buyers who choose the longest loan term will have to spend more on financing over time. Find out how much you will pay in interest over a longer loan term.

2. Depreciation

Depreciation is one of the highest costs associated with owning a car. This is how much the vehicle retains its value over time. This is especially important if you keep the car for less than five years, since the depreciation rate is always higher during the first years of possession.

By the time you receive the keys from the car dealership, you’ve already lost thousands of ringgit, and this crazy phenomenon is known as depreciation.

To illustrate how much depreciation will cost you for a five-year Proton Persona:

Calculation of the depreciation of a Proton Persona

Price of a new car: RM54,600

Depreciation rate: 60%

Amortization value: RM32 760

Value of a Protona Persona aged 5 years: 21 2140 RM

Factors that can accelerate a car’s depreciation rate are mileage, make and reliability history, degree of wear, modifications, and who you sell your car to (selling your car to a car dealership will lower your selling price even further).

3. Fuel consumption

Surprisingly, gasoline is the second highest cost of owning a vehicle.

Choosing a car with good nominal economy can help you reduce this cost. A Persona 1.6 CVT has a fuel consumption of 6.1 liters per 100 km. Assuming an average of 1,000 km per month, this is how much you are expected to pay for gasoline over five years.

Fuel consumption over five years

RON95 gasoline price: RM1.59 / liter *

Total mileage: 1000 km x 12 months x 5 years = 60,000 km

Total fuel consumption: 60,000 km รท 100 km x 6.1 liters = 3,660 liters = 5,819.40 RM

* The calculation is based on the current price of gasoline and will vary depending on the price of gasoline.

4. Maintenance and repair

The key to keeping vehicles in good working order and low cost repair on the road from owning a car is to do routine maintenance.

Although many new cars now have a five-year warranty, the manufacturer’s warranty does not usually cover service charges. The general maintenance program for a Proton Persona is as follows:

Distance and timeMaintenance cost
1000 km / 1 monthRM121.09
10,000 km / 6 monthsRM121.09
20,000 km / 12 monthsRM136.86
30,000 km / 18 monthsRM319.31
40,000 km / 24 monthsRM267.52
50,000 km / 30 monthsRM191.05
60,000 km / 36 monthsRM743.41
70,000 km / 42 monthsRM191.05
80,000 km / 48 monthsRM267.52
90,000 km / 54 monthsRM383.40
100,000 km / 60 monthsRM307.61
TOTALRM3049.91

Part of the routine maintenance routine involves engine oil, engine oil filter, drain plug gasket, spark plugs and air filter, while the rarest involve the fuel filter, transmission oil and FEAD belt.

Since the Proton Persona comes with a five-year warranty, you can save money on repairs, assuming the warranty covers the repairs you need. However, to be careful, the general rule is to allocate 1% of the value of your car for maintenance purposes each year and to have an emergency fund of 10% of the value of your car for expenses. unplanned maintenance.

5. Road tax

Depending on where the car was purchased (peninsula or eastern Malaysia), the type of ownership of the vehicle (private or business) and the capacity of the engine, the road tax is a mandatory cost which you cannot escape .

For a 1.6 cc Persona in Peninsular Malaysia, the rate of the road tax is RM 90.00 per year. This is equivalent to RM450 over five years.

6. Insurance

Another annual cost of owning a car is the auto insurance premium. This can be considerably higher than the cost of your road tax as it depends on the value of your car. You can use our car insurance calculator to find out your car insurance premium.

Here is the estimate of the annual automobile insurance premium for a Persona CVT:

YearValue of the carPremium
1RM54,600RM1,699.10
2RM44,226RM1 429.38
3RM31,668RM1 102.87
4RM26,754RM975.10
5RM21,840RM847.34
Total premium paidRM 6,053.79

* The above calculation is based on full auto insurance coverage, excluding windshield coverage or loss free discount (NCD).

Those staying or commuting to flood prone areas can also opt for flood cover.

7. Parking and toll

Unfortunately, the cost of owning a vehicle does not end there. There are still other miscellaneous costs which may seem insignificant, but which can represent a considerable sum. Here are some hidden costs that you may have overlooked.

If you are unlucky enough to work in the city center, be prepared to pay at least RM 200 per month for a parking space. This does not include the various parking fees we pay when we go for meetings and purchases.

Suppose that a city driver spends about RM 230 per month to park alone.

There are still toll payments to consider. Almost all of the main roads in the Klang Valley have a toll booth. You can easily pay at least RM80 per month in toll, if you drive by a toll road to go to work every day.

In five years? This will amount to RM13,800 in parking fees and RM4,800 in tolls! It’s a great RM18,600 out of your pocket in five years.

Keep in mind that parking and toll charges can vary considerably depending on where you are and your driving habits. Someone who does not go downtown and is fortunate enough to get free parking at work can see a very low cost in this category.

How much would you pay?

Purchase priceRM54,600.00
Loan / financing interestRM7371.00
Fuel costs5,819.40 RM
InterviewRM3 049.91
Road taxRM450.00
InsuranceRM 6,053.79
Parking and tollRM18,600.00
TotalRM95,944.10

This means that a car costs RM95,944.10 be over five!

While it is easy to own a car in Malaysia, it is a much larger investment than people expect. Although it offers great freedom of transportation, it could translate into a significant drop in costs for those who are not prepared to shoulder the burden – and we haven’t even started to talk about breakdowns.

With the arrival of the MRT and other LRT lines, let’s hope that having a car becomes less of a necessity for Malaysians.

Find out how you can save money on gas by completing this simple questionnaire.

This article was first published in January 2014 and has been updated for freshness, accuracy and completeness.

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Jothi Venkat

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