Monday, September 21, 2009

Buying a Car : The Hidden Costs

Buying a car is like cutting a hole in your wallet. The upfront downpayment for the car and the cost of monthly maintenance is seriously high.

Let's not talk about the monthly installments that one has to pay for the car loan. Let's just explore the cost of maintenance alone:

Road Tax ($700 to $1000)
Road tax that you pay depends on the type of car you are driving. In Singapore, expect to pay around $700 per year for a 1.6L car.
Carparking ($2400 - estimated $200 per month)


At the cheapest, car parking will cost you easily $200 per month. This includes parking for both work and home. If you work in town and drive there, the costs will be much more.

Motor Insurance ($500 to $1600)

This depends on a whole host of factors such as the age of driver, model of car and whether you have been involved in an accident before. One should expect to pay in the region of $800 to $1200 if you have never been involved in an accident. (See how you can save money on insurance)
Petrol ($3600 - estimated $300 per month)
This depends on how much you drive per week. But you can roughly expect to be filling up at the station every week. Depending on the grade of petrol that you pump, you can expect to pay $70 to $100 for a full tank.

Car Washing ($100)

Let's say you only wash your car like once a month, it will still cost you easily $100 per year.

Maintenace ($500)

Changing tyres, aircon filters, etc , etc.. Everything seems to need replacing after a few years. Expect to be paying up to $200 to $300 for each servicing trip you make.


THE HIDDEN COSTS

Adding up all these hidden costs, you will see that owning a car involves paying up to $8000 per year. This does not include your monthly installment payments and also other charges like ERP. That is close to 2 months salary for most people!!!

Good luck if you intend to buy a car anytime soon.

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