The Financials Of Having A Car

Hello friends,

Hope it's not too late for me to wish you happy new year! It's 2020 and it's that time again where everyone is at their peak of motivation and devising their new year's resolution. Hope 2019 has taught you more about yourself so that you could improve in 2020.

So for my very first post in 2020, I want to write about the financials attributed to owning a vehicle. It's not going to be a comprehensive coverage on all of its cost but I hope this could give you a good idea on at least the maintenance aspect of it.

Disclaimer: I don't technically own this car. It's my parent's car but everyone in the family drives it. So that means we have a shared responsibility over this car. However, all the cost regarding the maintenance was borne by my parents so I'm just the one who execute the activities of bringing it to the auto shop.

So without further ado, here's a table that I keep track on the cost of maintenance of the car.

Click the photo to enlarge

So as from the table, the total cost of maintenance that I've made over the course of October 2018 to January 2020 is RM3,216.85. If I break it down into annual expenditure, it would be:

• 2018 - RM1300.65
• 2019 - RM1510.30
• 2020 - RM405.00

After being "responsible" for owning a car, I have experienced firsthand on the upkeep that I have to do revolving the car which includes maintenance, insurance & roadtax and cleanliness. In short, I have concluded that owning a car is absurdly expensive. I would not recommend for those with tight financials to own a car because it's a triple whammy for your financials. A car depreciates in value, you have to pay interest on it (if you purchase through a loan) and it has high operational & maintenance cost. 

After being "responsible" for this car for a little over a year, it has been the major consumer on my budget plans. Thank god I don't have to pay its monthly installments because that would render me broke. 

Nevertheless, I've learned a lot throughout this experience and here are a few take aways!

1. Always buy a secondhand car, preferentially that's 2 to 4 years old. By doing so, at least you've purchased the car where it has run down most of it's depreciating period. 
2. Buy a car without interest. So the idea here is to reduce the affect of the triple whammy I mentioned earlier. If the first point tries to hedge over the depreciating aspect of it, this second point tries to hedge over paying interest on the car. So that means, buy it cash. Or if you want to go next level financially savvy, pay for the car using a credit card and immediately pay off your credit card. This is a perfect way for you to rack up those credit card points, especially if you're chasing after the signup bonus' minimum spending requirement.
3. Always go for general auto shops, only after the end of your warranty period. When I first got the responsibility of taking care of the car, I figured that it's for the best if I could send it for repairs at its authorized service center. So that's what I did throughout 2019. It took me a whole year to finally realize that the cost of their repairs were absurd. I finally got a wake up call after the engine mounting of the car was severely worn out that it shook the car vigorously to the point that I couldn't even hear my car radio properly due to the noisy vibrations. When I asked for the cost of the repairs, the authorized service center quoted me RM1400 which was ridiculous! After that incident, I quickly made a quick Google search for other auto shops and give them a call. After several calls, I finally found the cheapest auto shop and quickly jump on the opportunity. I came, asked for them to change the engine mounting, waited for an hour and a half, and then I a drove home smiling knowing that I only paid RM600 for it instead of RM1400. So the lesson here is, if your car is no longer under the usual 5 years warranty, skip the authorized service center and just go to any general service center. Make a good rep with them and earn their trust. Have a conversation about your car and learn at least the surface level of your car's maintenance. All in all, just enjoy the learning process and don't worry about the cost because it will always be cheaper than the authorized service center. Also, go to the service center as soon as it opens to avoid waiting in line. Saves you a lot of time especially if you only have Saturdays to spare.
4. Renew your road tax and car insurance online. For road tax, just use myeg.com.my. It has an interface that's stuck in the 90s but it's straightforward and it works. Have them delivered the road tax to your home and you'll save all the hassle. For car insurance, look for insurance company that has an online presence and renew your insurance directly on their website. By doing so, you'll save 10% because there's literally no middleman (the insurance agent).
5. There is always ways to save on gas. The least that you could do is to own a loyalty card. I'm currently using Petronas MESRA card. Based on my calculations, I could save about 3% monthly by collecting their points and make a redemption for gas. Also, there are a lot of gas promotion due to the eWallets galore that's happening right now. For instance, Boost's promotion of RM5 cashback for fueling at Shell for a minimum of RM40. That's 12.% return for every fueling! So make full use of it while it lasts.  

So I guess that's about it for now regarding the things I have to say in relation to the financials of owning a car. Just keep these points in mind when you're deciding on buying a car. I'll add in more details probably later when I have more interesting findings. That is all for now, thank you for reading my friends and have a great year ahead.

Fin.