KUALA LUMPUR, Jan 10 — You’ve landed a well-paying job early in your career and began dreaming of owning your first car. However, before you hit the road, it’s important to understand the hidden costs of car ownership in Malaysia — beyond just the price tag.
In Malaysia, the path to car ownership is not as straightforward as it seems. In addition to the down payment, first-time buyers must navigate a maze of additional expenses, such as car insurance, road tax, and more, which contribute to long-term financial commitments.
Here are the extra costs to consider when thinking about buying a car:
The purchase price
While the car’s price is the most obvious cost, it’s only a fraction of what you’ll actually spend. Most Malaysians rely on hire purchase loans, which come with interest rates that can significantly increase the overall cost.
For example, a nine-year loan with a 4 per cent interest rate will result in you paying far more than the car’s original price over time.
It’s also important to remember that a car’s value will depreciate over time.
For instance, if you buy a Perodua Myvi for RM55,300 today, its value is likely to drop by 40 per cent to 50 per cent in five years. This means you could sell it for around RM27,000 to RM33,000, depending on its condition and how well it’s maintained.
Monthly loan payment
To secure your loan with a financial institution, you’ll need a down payment of at least 10 per cent of the car’s price.
For a car costing RM50,000, this translates to RM5,000 upfront. However, opting for a higher down payment can help reduce your monthly instalments and interest charges.
It’s always best to assess your financial situation monthly before visiting any car dealership, as sales assistants will typically do everything they can to close a deal with you.
Car insurance
In Malaysia, car insurance is mandatory and must be purchased in order to renew the road tax.
First-time buyers often face higher premiums. The cost is influenced by factors such as the car’s value, engine capacity, special perils, and driver’s age.
For instance, a 26-year-old Malaysian renewing insurance for a new 1.5L Perodua Myvi after the first year might pay around RM1,620.75. This amount is after applying a 25 per cent No-Claim Discount (NCD) and includes comprehensive coverage, which protects against accidents, theft, and third-party damage.
The policy also covers special perils from natural disasters like floods, storms, and landslides, as well as windscreen protection for repairs or replacement in case of damage.
Road tax
Road tax in Malaysia is calculated based on the car’s engine capacity and fuel type (petrol or diesel). For a typical 1.5L engine car, such as the Perodua Myvi, you can expect to pay around RM90 annually. However, larger engines can result in significantly higher costs.
When you add the insurance renewal cost and road tax, the total comes to RM1,710.75 to legally maintain the car on the road, based on the example used earlier.
Maintenance costs
First-time car buyers often overlook the ongoing costs of maintenance. Routine servicing every six months or every 10,000km can cost between RM200 and RM600, depending on the car’s brand and model.
For example, servicing a 1.5L Perodua Myvi at the 40,000km interval costs around RM558.20, which includes engine oil, filters, transmission fluid, brake fluid, labour charges, and taxes.
Additionally, wear-and-tear items such as tyres, brake pads, and batteries will contribute to long-term expenses.
Fuel, parking and tolls
Fuel expenses are a major, if not the largest, part of car ownership. Depending on how you drive — faster driving results in higher fuel consumption — and how far you travel daily, a Perodua Myvi can cost between RM200 and RM300 per month for average city driving.
If you live in urban areas like Kuala Lumpur or Penang, parking fees and tolls should also be factored into your budget.
Parking costs can range from RM3 to RM20 daily, while tolls on frequently used highways may add RM100 or more to your monthly expenses.
Additionally, local authorities may tow your car if parked illegally on the roadside, and retrieving your vehicle could cost you more than RM100.
Additional necessities
When buying a car, there are additional items that may not be included in the purchase price, such as dash cams, but are often necessary for convenience, safety, or maintenance. These costs can add up over time and should be factored into your budget.
Dash cams are increasingly seen as a necessity for drivers, providing valuable evidence in case of accidents or disputes. Depending on the brand and features, a basic dash cam can cost between RM150 and RM300, while high-end models with dual cameras and advanced features can exceed RM1,000.
Window tinting is another common essential in Malaysia due to the hot weather, offering UV protection and better cooling for your car. Some dealerships include window tinting as part of the car purchase package, but it’s not always guaranteed. If you need to get it done separately, prices range from RM500 to over RM2,000, depending on the quality and type of film used. It’s generally better to opt for higher-quality tints, as they tend to last for nearly a decade.
Maintaining a clean car also comes with recurring costs. Regular car washes typically range from RM10 to RM30, while premium detailing services for both the interior and exterior can cost RM100 to RM300 or more. A dirty interior can pose health risks, while a dusty exterior can accelerate the deterioration of the car’s paint.
While not all of these items are essential, they contribute to a better driving experience and your safety on the road. They should be considered when budgeting for your first car.
In short, for first-time buyers in Malaysia, the cost of owning a car goes far beyond the sticker price. To avoid financial strain, plan your budget carefully, research financing options, and consider alternative transportation if the expenses seem overwhelming.
Owning a car can offer freedom, but only if you’re fully prepared for the financial commitment it entails.
