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Cost of car ownership In Singapore (for my case)

By Blogger on 21 Dec 2009

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Blog post by sgbluechip:
I drive a humble Japanese car which I bought brand new 3 years ago. I paid the full amount in cash and hence no expense on loan interest was incurred. I would like to see if it is worth keeping my car or change to taking taxis on a daily basis.

Cost of car: $46,000

Yearly costs:-

Road tax and radio: $769

Insurance: $700 (50% NCD+5% police white card for good driving record)

Petrol: $1200 ($100 per month. My workplace is near my home but extremely inaccessible, though parking is free)

ERP: $20 (I rarely go to town area)

Yearly servicing: $150 (I do it only once a year, since I drive an average of 10,000 km per year)

Other wear and tear: $200

Parking at home: $765 (No way to avoid this unless you are living in private property)

Parking outside home and office: $120

Car wash: $144 (twice a month@ $6 each time)

Depreciation: $4,000 (minimum)

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If I were to drive my car for the full 10 years, it will cost me $40,000. As the scrap value at the end of 10th year is $6,000.

Hence the total cost of my car ownership is $8168 per year. If I were to take a taxi everyday to work, it will cost me about $20 daily. That alone will cost me $4,800 a year. Though there are days I am on MC and leave, letís just leave the figure for simplicity sake.

I need to take a taxi to school for my masters course, which adds up to another $1,000 per year. This is because I will incur transport costs for going to classes, meeting project mates, going for coffee, drinks and other associated traveling costs.

On weekends, I will need to meet friends on a regular basis for movies and drinks. That will cost me roughly another $1,000 per annum.

Hence, taking a taxi will cost me about $6,800 cash outflow per year. As depreciation is a non cash item, it means I will have to spend more money per year as compared to keeping my car now!

That said, after factoring depreciation, taking taxi instead of a car will save me about $1,300 per year. This amount can buy me a new laptop, LCD TV, high end PDA or an overseas tour.

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Although on the average I do not spend more than 1 hour in my car daily, having a car is a lot more convenient and fun that will yield me more satisfaction as compared to the paltry $1,300 saved.

I do not want to save $1,300 and be subjected to the weather conditions, peak hour surcharge, dirty cabins of some taxis and waste time waiting for them.

$1,300 is money well spent if time is saved and quality of life vastly improved.

So perhaps taking a taxi can definitely save money, but qualitative factors are important as well. For example, picking up a girl in your own car is much nicer than picking her up in a taxi. Even if it is an old car!

Economists would argue that the upfront $46,000 when invested properly can yield more than 6% per annum. Hence my actual cost of car ownership is more than the above projection.

Well my take for them is, if that is the case, there is no need for any other material expenditure if all we do these days is to calculate to the last cent if it is worth owning any assets or not!

Then economists will be unemployed as well. How about that?

This entry is provided by the owner of http://sgbluechip.blogspot.com

car cost, car ownership singapore and 3 more...

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Written by Blogger
Not only do their passion for cars burn pavements, their thoughts and ideas on cars are as fast as the word go.

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Jason8 Jun 01 2012 04:27 PM
Well, car ownership is almost never cheap.Especially if you live in a city and take car every day.Lots of expenses are connected with a car , it takes out a lots of money from your wallet.You just spend it every day and maybe it's not so noticeable but, like in your case, you took time and started counting , then you discovered how expensive car ownership is.Honestly reading your article I expected that using taxi would be cheaper for you and was surprised with your conclusion.But taxi can never be so comfortable as your own car, that's why people spend money and apply for advance loan to enjoy this comfort.Furthermore, taxi service isn't always good enough.That's why even if you spend lots of money for the car ownership anyway it's hard to refuse it because of multiple advantages.

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