A lot of us keeping thinking it is expensive to get a new car, as in Malaysia, the lousiest car make by Proton will cost > RM30k, and a lot of us want a safer car instead of the Milo tin. So getting a decent car with all safety features such as all round airbags, ABS, Traction Control, etc will cost > RM80k. So if you take a 5-year loan @ 2.5% rate, the car will cost you RM90,000. Wow, that's a lot of money for the normal employee.
Now, look at it from another perspective, from RM90,000, the car will depreciate about RM15,000 in the first year, then RM10,000 in the second year, follow by an average RM8,000 for the next 3 years. So do the math now, the car will cost you RM15k+RM10k+RM8k+RM8k+RM8k = RM49,000. So if you sell the car after fifth year at RM31,000. You should tell yourself that you have actually just spent RM49,000 in buying the new car, plus additional RM10,000 for interest, a total of RM59,000.
So now you should feel better right, instead of spending RM90,000, you are only spending RM59,000 to own the new car, which is about RM11,800 per year. Look at it differently, you can afford a better car...Skip the Proton and Perodua, and get yourself something you like!
