Are you financially ready?

Are you financially ready?

Owning a car in Singapore can give you a life of status and comfort. Wait a minute, do you really know the true cost of owning a car? Let’s say, you have already saved up $36,000/- and ready to book a base model like a Toyota Corolla Altis. The down payment is 30% of the selling price of $114,888/- which will be $34,466/- and your installment is $1,110/- for a tenor of 7 years. Assuming you are first time owner, so your insurance will be estimated somewhere in the region of $1500/- (assuming this is paid by your credit card and on a 12 month installment basis). By this time, your savings of $36,000/- will have been wiped out when you wheel out your new car. This is when the tab starts ticking monthly;

Installment           : $1,110/- 
Insurance             : $125/- 
Road Tax ($742/Year)  : $62/- 
Petrol                : $280/- (Provided not doing sales, just to and fro from home. And some weekend outing)
Parking at HDB        : $85/-
Parking at Office     : $140/-(Provided office not in CBD area)
ERP Charges           : $50/- (Provided office not in CBD area)
Servicing             : $20/- (New car so under warranty, probably needs to pay for 2 change of oil say $240/-)
Maintenance           : $35/- (Say you change tyres yearly)
Total                 : $1,907/-

This is just the minimal cost per month if you have bought a new Japanese car which requires little maintenance unlike buying a continental car which will be higher.

A recent news says a married executive with 2 kids earning $3,000/- that was attracted to a life of status and comfort owing a car could end up losing most of his $36,000/- down payment eventually when he needs to sell of this car. He would probably end up very miserable just by trying to meet ends meet. He might even end up in debt as he still have to pay for his HDB flat’s installment and maintenance,children’s needs like food and studies, and the family’s necessities.

Credit Counseling Singapore (CCS) advises people who wants to buy a car to calculate the true cost of owing one before making a decision to buy one. A number had turned to CCS for help just by owning a car. So,you better do your finances before making that purchase or end up regretting later.
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