Malaysians often complain of high car prices in the country, due to the taxes levied. It is reported that KL is the fifth most expensive city to buy a new medium -sized car compared to 54 other cities around the world.
However, according to the same report we came in as the fourth cheapest when it comes to petrol prices. Despite the high cost of cars, Malaysians seem to continue to move in terms of car ownership as the number of Malaysians using vehicles is projected to increase 1.4 -fold to 31 million by 2030.
If you want to buy a car soon, it's a good idea to do some research on how much a car actually costs. The cost of owning a car is not as easy as paying off your car loan, but it also involves the cost of running your car from day to day.
The total cost exceeds its purchase price when you consider out -of -pocket expenses such as petrol and insurance, plus the loss of value of the car over time (depreciation).
Let's examine the actual cost of owning a Proton Persona 1.6 CVT Executive at a price of RM54,600 for five years.
1. Financing
Unless you start saving the day you were born just to buy a new Proton Persona, chances are you will need to get a hire purchase loan to buy a car in Malaysia.
If you go through the regular route, you will have to deduct 10% of the price of the car, and the remaining 90% will be financed. Here is the amount of interest you have to pay over five years:
Interest rate: 3.5%
Duration: 5 years
Monthly Installment: RM962.33
Total interest during the loan period: RM8,599.00
* Calculation is made based on Proton car loan calculator
With a maximum hire purchase loan term at nine years, car buyers who opt for a longer loan term will have to pay more for financing over time. Find out how much interest you pay for a longer loan term.
2. Depreciation
Depreciation is one of the highest costs of owning a car. How well the vehicle keeps its value over time. This is especially important if you keep the car for less than five years because the depreciation rate is always higher in the early years of ownership.
Once you receive a key from a car dealer, you’ve already lost thousands of dollars, and this crazy phenomenon is known as depreciation.
To illustrate how much depreciation will be charged for a five -year -old Proton Persona:
Proton Persona depreciation calculation
Price of a new car: RM54,600
Depreciation rate: 60%
Depreciation value: RM32,760
Value of 5 -year -old Proton Persona: RM21,840
Factors that can accelerate a car’s depreciation rate are mileage, brand, and reliability history, level of wear, changes and to whom you sell your car (selling your car to a car dealer will lower your selling price even further).
3. Consumption of gasoline
Surprisingly, gasoline is the second highest cost of vehicle ownership.
Choosing a car with an affordable economy may be able to help you lower these costs. The Persona 1.6 CVT offers a fuel consumption of 6.1 liters per 100 km. Assuming an average of 1,000 km per month, here is your estimate of paying for gasoline for five years.
Gasoline consumption for five years
RON95 petrol price: RM2.05 / liter *
Total mileage: 1,000km x 12 months x 5 years = 60,000km
Total petrol consumption: 60,000km ÷ 100km x 6.1 liters = 3,660 liters = RM7,503
* Calculation is made based on petrol price on 25 March 2021.
4. Maintenance and repair
The key to keeping a vehicle running smoothly, and low repair costs on the road of car ownership is to do routine maintenance.
While many new cars today come with a five -year warranty, the manufacturer’s warranty usually does not cover service costs. The general service maintenance schedule for the Proton Persona is as follows:
Distance and time Maintenance costs
1,000km / 1 month RM121.09
10,000km / 6 months RM121.09
20,000km / 12 months RM136.86
30,000km / 18 months RM319.31
40,000km / 24 months RM267.52
50,000km / 30 months RM191.05
60,000km / 36 months RM743.41
70,000km / 42 months RM191.05
80,000km / 48 months RM267.52
90,000km / 54 months RM383.40
100,000km / 60 months RM307.61
TOTAL RM3049.91
Some common maintenance routines involve engine oil, engine oil filters, exhaust plug gaskets, spark plugs, and temporary air filters that are not uncommon involving fuel filters, transmission oil and FEAD Belts.
Since the Proton Persona comes with a five -year warranty, you can save a certain amount of money on repairs, assuming that the warranty covers the repairs you need. However, to ensure that is safe, allocate 1% of the value of your car each year for maintenance purposes, and have an emergency fund of 10% of the value of your car for unexpected service costs.
5. Road Tax
Depending on where the car was purchased (Peninsula or East Malaysia), the type of vehicle ownership (private or company) and engine capacity, road tax is a mandatory cost that you cannot miss.
For a 1.6cc Persona in Peninsular Malaysia, the road tax rate is RM90.00 per year. That amounts to RM450 in five years.
6. Insurance
Another annual cost of owning a car is the motor insurance premium. This is much 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 an estimate of the annual motor insurance premium for a car if you have had it for five years.
Period of insurance (no claim made) Value of car Insurance premium
First year RM56,469 (new) RM1,261 (first year)
Second to fifth year RM35,744-RM21,490 (est) RM2,573 (2nd to 5th year)
Those living or commuting in flood-prone areas may also want to choose flood coverage.
7. Parking and tolls
Unfortunately, the cost of vehicle ownership does not end here. There are still other costs that may seem insignificant, but can add to the amount. Here are some hidden costs you might overlook.
If you’re unlucky enough to work downtown, be prepared to shell out at least RM200 a month for parking. This does not include the various parking fees we pay when going to meetings and shopping.
Suppose a city driver spends around RM230 a month to park alone.
There are still toll payments to consider. Almost every major highway in the Klang Valley has a toll room. You can easily pay a toll of at least RM80 a month, if you have to take the toll road to work every day.
In five years? The amount will be charged a parking fee of RM13,800 and a toll of RM4,800! This is a great RM18,600 out of your pocket in five years.
Keep in mind that parking and toll costs can vary depending on where you are and your driving habits. Someone who doesn’t commute to the city center, and is lucky enough to get free parking at work, might see very low costs in this category.
How much will you pay?
The purchase price is RM54,600.00
Loan / financing interest RM8,599.00
Petrol costs RM7,503.00
Maintenance RM3,049.91
Road tax RM450.00
Insurance RM6,053.79
Parking and toll RM18,600.00
Total RM98,855.70
This means a car worth RM98,855.70 to own for more than five years!
While it is easy to be a car owner in Malaysia, this is a much bigger investment than people expected. While it offers a lot of transportation freedom, this can be a huge cost reduction for those who aren’t ready to shoulder the burden - and we haven’t even started talking about things declining.
With the MRT and more LRT lines, let's have cars become a smaller need for Malaysians.
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