Wolf Money(Car Ownership in Singapore)

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(Image Credit : CNA)

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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All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for education only. Buyer beware,do you own due diligence.



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