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Old 25-08-2007, 03:35 AM   #1
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Can you afford a car?

Once in a while, a forumer will appear with details about his salary and expenditure and seek the advice of fellow HWZers about whether he can afford a car.

The answers will predictably fall into four categories.

(1) "Wah, you earn so much, can afford any car you like" (for any salary above $2.5k)

This type of answer is usually posted by non-working forumers like students or those serving NS, who think that anything above $1k is a lot of money.

(2) "I like honda civic type r because chio. u shld buy"

This type of answer is useless for budgeting, but simply for +1 purposes. Again, this type of posting is usually by students or those serving NS.

(3) "I earn $5k/6k/7k per month but still take bus and eat rice + tau you"

This type of posting is usually by a forumer who earns a fair amount, but thinks he earns a lot and wants to show off how financially savvy he is.

(4) "Singapore cars so expensive if I go live in USA/Australia/Europe/Africa/North Pole the cars are so much cheaper, women more beautiful, jobs plentiful and food is tastier"

These are postings by 'politically aware' (i.e. PAP bashing) Singaporeans who seem to think that their job skills will allow them to migrate easily to other countries to work, when they don't realise that their skills can be done by a Chinese/Indian at twice the speed and half the price.

However, today, I will answer this question for you once and for all in 5 easy steps.

Step 1 Take your average monthly salary over the last 6 months and minus your average monthly expenses over the last 6 months.

Note: If you don't know how much you earned or saved over the last 6 months, car ownership is likely to leave you in financial ruin.

Step 2 Add car allowance (if any).

Step 3 Minus public transport costs.

Step 4 Do you have enough money left to maintain the car you are thinking of (car loan, insurance, road tax, petrol, parking, ERP, maintenance, upgrade budget)?

Note: If you never owned a car before and you do your calculations and you think 'oh my god, this cannot be right as it is so expensive'. Congratulations, add 10% to your figure and you now have the cost of car ownership in Singapore.

Step 5

If YES, you can afford a car FOR THE TIME BEING (assuming you are happy to reduce your savings by the same amount).

Note: If circumstances change (change job, lose job, lose car allowance, get married, got baby, loved one falls ill and needs medical expenses), then depending on whether you can sell the car without having to come out with money, you may be financially screwed.

If NO, you cannot afford a car. Sorry. Work harder or spend less, then maybe in the future can.

Extra Observations

1. For young people with less life experience, please note that owning a car and being able to afford a car are two different things. There are many people who cannot afford a car, but still own a car.

Most of the confusion young people face is wondering why their colleague/friend who earns $1500 can afford a car - the answer is they cannot afford a car. Either they have background support from family, or they are financially bleeding to maintain the car.

2. For guys who think that girls like guys with cars - you are unfortunately right. However, most girls do not know or care what sort of car it is, as long as it can get from point A to point B in relative comfort. If you are planning on buying a car for the main purpose of increasing your attractiveness to the opposite sex, a cheap and comfortable one will do - no need for a 'sports car' like a Civic Type R or STi. A guy who has an Altis or Sunny but can afford the occasional nice restaurant treat vs a guy with a STi but can only afford hawker centre or Mcdonalds - who do you think will be more successful in the game of love?

3. BONUS Observation Some people will read this posting and think that I am discouraging car ownership. I am not. I am trying to make sure that ideally, if you choose to own a car, you go in with your eyes open, and not get 'surprised' by your financial situation as time passes and reality sets in. MANY MANY Singaporeans (including car owners who post on this forum) do not 'pass' the test I have put in this posting, myself included when I first started work. Although I was making $5.5k when I bought my first car, due to poor financial discipline, I had almost nothing left every month. It is very unpleasant for a young person to realise that his financial situation is his own responsbility, but the earlier you realise this, the better it is for you. The stress you get from checking your rolled over credit card debt, overdraft and bills every month is even more unpleasant than trying to gain a basic understanding of personal finance. It is unfortunate that for most young men in Singapore, a personal finance lesson is paid for in the shape of a $60k depreciating lump of mental on wheels.

If you still decide to buy a car even though you can't afford it, all the best.
Demented, Inix, oration37 and 21 others like this.

Last edited by blah; 23-12-2007 at 04:31 PM..
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Old 25-08-2007, 12:18 PM   #2
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hahaha... this is a good one... it is easy to buy a car, but not easy to maintain a car..

maybe to add on, rule of thumb is please think of other neccessary cost on top of ur monthly instalments.
this includes petrol which add another tidy sum of > $200+++ mthly (depends on hw thristy ur car is and hw many km u drive ), road tax (depends o n hw big ur car is.., ard$400 for a 1.5l car for 6 mths), insurance (depends on age and if u r "P" plate or in high risk category, min $1500 +++ annually..), carpark cost, maintenance, and ERP.

Gd luck when doing calculations... :p
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Old 25-08-2007, 01:05 PM   #3
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If NO, you cannot afford a car. Sorry. Work harder or spend less, then maybe in the future can.
Or migrate to countries where cars are cheaper. Or totally give up thinking about cars
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Old 25-08-2007, 01:20 PM   #4
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Good places to emigrate to:

Aussie
US
MALAYSIA.
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Old 25-08-2007, 01:22 PM   #5
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Or migrate to countries where cars are cheaper. Or totally give up thinking about cars
Hey Hello! not only if you go there you can find that the cars are cheaper, you find all the engine CCs are different. Not only are Singapore cars overpriced but underpowered as well

If by some reason you have enough to afford a family sedan in Singapore, you go overseas got 2 ways to go. With the money you can get some affordable cheap Japanese (Don't know whether the $45,000 - $50,000 WRX is still available at such a price? EVO have to pay more) or european sports coupe or you totally go the other Dukes of Hazards way, Big massive car with a V8 running.......................... If you want to run from the police, can u imagine what would happen if their toyota corrola patrol car by some accident get in front of you, with the bullbars.......... (Oh opps overseas, they are not that dense, they call them pigs there will have a just as big and powerful Ford Crown Victoria to stop you)

If not bio diesel engine car also can, get cheaper tax somemore the opposite of this place.

Last edited by Rasputin99; 25-08-2007 at 01:25 PM..
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Old 25-08-2007, 02:21 PM   #6
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Some trivia..

Last time i buy car in UK.. Some cheap until 2K SGD u can get liao..

But quite lok la...
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Old 25-08-2007, 02:41 PM   #7
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oh nice article...
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Old 25-08-2007, 04:14 PM   #8
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a BMW M3 cost just measly US60k. If you go US work and your pay is the same as singapore (except currency different), you probably can own one within just a few years. Over here, the car easily cost over 300k. Go figure.
Some countries hor... really knnb one.
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Old 25-08-2007, 05:09 PM   #9
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(car loan, insurance, road tax, petrol, parking, ERP, maintenance, upgrade budget)

you can include FINES if any as well, go past ERP without cashcard fine $200
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Old 25-08-2007, 08:20 PM   #10
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a BMW M3 cost just measly US60k. If you go US work and your pay is the same as singapore (except currency different), you probably can own one within just a few years. Over here, the car easily cost over 300k. Go figure.
Some countries hor... really knnb one.
What about taxes and other costs of living there?
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Old 25-08-2007, 10:10 PM   #11
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(car loan, insurance, road tax, petrol, parking, ERP, maintenance, upgrade budget)

you can include FINES if any as well, go past ERP without cashcard fine $200
dude. do you drive?

Motorists who pass through an operational ERP gantry without a properly-inserted CashCard in the IU, or one with insufficient monetary value in the CashCard to pay the ERP charges, will receive a letter within a few days of the violation requesting them to pay the outstanding ERP charge plus an administrative fee of $10, within two weeks from the date of the letter. The administrative fee is reduced to $8 if payment is made electronically via the following channels:
http://www.lta.gov.sg/motoring_matters/motoring_erp.htm
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Old 25-08-2007, 10:21 PM   #12
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a BMW M3 cost just measly US60k. If you go US work and your pay is the same as singapore (except currency different), you probably can own one within just a few years. Over here, the car easily cost over 300k. Go figure.
Some countries hor... really knnb one.
U have any idea the price of their petrol
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Old 26-08-2007, 01:13 AM   #13
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U have any idea the price of their petrol
i heard from a US fren there their petrol is much cheaper than ours. although tax of course is more than us.
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Old 26-08-2007, 02:00 AM   #14
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Thanks guys, you reminded me of the fourth type of answer...

I have edited my initial post accordingly.

Last edited by blah; 26-08-2007 at 03:06 AM..
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Old 26-08-2007, 02:34 AM   #15
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gas is cheap at US$2.6 per Gal.
insurance for full coverage perhaps around US$70-150 a mth.
pay in full to get a car great. if you need to take loan.. APR is like 7-9%! like 2x of SG rate.

income tax is higher.. at 20-35%. still need tp pay health+dental insurance and what not.
earn US$60K Fed tax 20%, pay health insurance at $100; and social security and tax tax maybe another 5-10% gone.
no CPF, have 401K, put in 6%, company maybe match 6% max.

in Japan it is cheap to get Japn cars. To get import cars tax is so high.. to own a Ford explorer in Japan, you can own 2 in USA!

Go China loh.. get foreign made cars. country still new, sure can find a tons of ways to siam income tax!
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