Wolf Money(Car Ownership in Singapore)
I mentioned previously about owning a car had become somewhat elitist in Singapore. Some people who have a genuine need of a car might not be rich. I am sympathetic to those who are caught in a catch 22 situation where not having a car is not an option. There was an article in CNA talking about car ownership in Singapore. I did a simple calculation on the given example of owning a Toyota(bread and butter). A base model Toyota as cited in the article cost $165,000 including COE. What are the potential savings if one put off the idea of buying a car for 10 years in this crazy market.
Base on 10 years
Cost of Vehicles $165,000
Plus
Car Loan interest 70% quantum@3% $35,000
Cost of parking and ERP $24,000
Cost of petrol and road tax $30,000
Cost of Insurance $12,000
Cost of maintenance $10,000(no major issue like gearbox problem)
Minus
Residual value at end of 10 years $10,000
At the end of 10 years if one had put off purchasing that car, one should have close to $266,000 sitting comfortably in their bank account. The amount would be bigger at $357,000* if the total sum is invested at a low 3% return for a decade.
Time saving factor
The time saving factor is not a strong argument for purchasing a car anymore. There is probably some truth of reaching your destination early but the time saved are mostly taken up searching for a parking lot.
Conclusion
If one really doesn’t need a car, it might be better putting off the idea of owning one in Singapore.
*assuming having the full sum of 266k spent over 10 years at your disposal at the start of 10 years.
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