Cars have a reputation for being unaffordable in Singapore. But now that the MRT has gone berserk on us, you might be wondering whether you've got enough money to buy the cheapest possible car in town.
So now that the Chery QQ has crashed and burned, what exactly is the cheapest car in Singapore?
PERODUA ASIA 1.0 (M)
Per-what? You might not have heard of Perodua, but this car manufacturer is actually Malaysia's biggest. Yes, they're bigger than Proton.
And according to Perocom Auto's latest pricelist, a brand new Perodua Axia 1.0 Standard G (automatic transmission) costs $72,800, including COE, as of 10 Nov 2017.
That might sound expensive to people who are not familiar with Singaopre's COE system, but for those of us who are, a vehicle that costs so much less than $100,000 is something to be celebrated.
But can you really afford to buy this car? Here are some other costs you must consider.
With a car like the Perodua Axia, you should not skimp on car insurance. The cost of insurance will depend on various factors such as your age and driving experience, but you can expect to pay at least a four figure sum if you have 0 per cent NCD. An average sum would be around $1,500 a year.
Assuming you buy a brand new Perodua Axis, your road tax liabilities for a year would be $392.
The Perodua Axis 1.0 consumes petrol at a rate of about 21.6km/litre. A litre of Shell FuelSave 95 petrol costs $2.12 after discount.
Assuming you drive 150km a week, you'd be spending about $60 a month on petrol.
Parking and ERP
How much you pay for parking will depend on where you live and work (if you intend to drive to work). HDB season parking for residents is $80 a month for non-sheltered car parks and $110 for sheltered car parks. To park in the CBD, be prepared to pay well over $300 a month. For ERP charges, that will largely depend on whether you drive to work.
Servicing and maintenance
Depends on how hard you work your car, but in general the average car driver can expect to spend over $1,000 per year on routine maintenance work such as oil changes, tyre changes, servicing and so on.
So, can you afford it?
In addition to the cost of your car, you're looking at paying approximately $3,600 a year more to drive and maintain your car, and over $100 a month in parking, assuming you live in an HDB flat and do not pay for parking at work.
That works out to about $400 a month. Bear in mind that this is a bare minimum, as we haven't taken into account ERP and parking outside of home.
Assuming you buy a brand new car, you'll be able to loan a maximum of 60 per cent of the price of the car, with a maximum tenure of 7 years.
That means you'll need to pay at least $29,120 in cash. Your minimum loan repayments, if you choose the longest possible loan tenure of 7 years, will be at least $520 a month not including interest. Assuming car loan interest rates of between 2 per cent and 3.5 per cent, you'll be paying about $10 to $18 a month in interest.
That adds up to a monthly cost of at least $930 a month for the cheapest car in Singapore, and this hasn't even taken into account the cost of petrol.
Is there any way to lower the cost further?
In short, yes, there is. Buy a second hand car instead and you could see your costs fall further.
But buying a second hand car isn't all that straightforward because of the COE system.
Buy a car that's too close to the end of its COE's life and you could lose money as the car would be scrapped all too soon. Buy one that's too new and you're likely to end up paying a premium, as the car's value depreciates very rapidly in the first few years. As a general rule of thumb, a car that's 4-5 years old is a good bet.
Don't forget, however, that there are other factors to consider, such as the price of COE at the time you buy the car and the mileage and maintenance record of the vehicle.
All in all, car ownership will never be cheap, but whether spending that cash is worth the time saved and convenience really varies from person to person. To make your ride a bit more affordable, it helps to compare car loan interest rates and car insurance plans on MoneySmart.