Saturday, 18 February 2012

Personal finance - Car Management

Many years ago, I was debating with a good friend how much we needed to earn before we can afford to buy a car. The amount came to 3,000SGD. However, after much deliberation, I realised the amount is greatly insufficient.

I always wanted to get my own car since I started work, images of sports car was always on my mind. I dreaded the long journey to work on a bus and the need to wake up early.

Having a car back then was a "plus point" to look good in front of chicks and is a sense of personal achievement.

Looking back now, I think it was a matter of going through a phase in life where you just wanted something new.

I got my car 8 years ago and I am still driving the same car, I must say I am the rare breed to continue driving a car for so long and not succumb to the need to have the continental car for comfort and "status".

Some of the pointers I learnt on car management:

1. Get a reliable car that is fuel economical.
2. Go for cars that requires minimal maintenance.
3. The bigger your car, the more road tax you have to pay to Government
4. Buy a car if your job is able to supplement the expenses.
5. Do a cash flow management before you buy a car so as to ensure you have sufficient cash flow on other expenses.
6. Always be prepared to pay "fines" as every average car owner contributes this to the Government no matter what. Need to cater for spare cash for this.
7. If you drink and drive, there might be a risk your car depreciates at a faster rate.
8. Set aside a sum for car maintenance and do more thorough maintenance during the first few years.
9. There is a need to change tyres every few years or based on your mileage, this is a re-accruing cost and tyres can be costly.
10. A driver will always experience tyre burst or other malfunction, be prepared to spend extra on adhoc basis.
11. Try to pay cash for your car if possible.
12. Have ways to offload your car easily should there be a need to relocate or when your company offers you a car.
13. Do not listen to over trade offers on cars
14. Learn to say no to car salesman.
15. Buy cars with a higher OMV.
16. If you buy continental cars, be prepared to spend excessively on maintenance.
17. Cars are a liability unless you rent it out.


  1. I've never really felt the need to have a car (and I've been working for 12 years), whether for "convenience" or "status". I guess I am lucky to live in a pretty central area where buses and MRT are nearby; and my workplace is also just a 20-25 min bus ride away during peak hours. Never really saw a car as something to "show off", to me it's just a machine to get you from Point A to Point B. But I am aware a lot of people (yes guys and girls too) obsess over the make/model of a car as it conveys a certain "image".

    $3,000 a month salary is woefully insufficient to consider owning a car, even a second-hand one. I would think a more realistic number is $6,000 a month, even then you may not be saving as much as you'd like to. Compound that over 8 years and the spending can be pretty significant.

    Don't get one unless you absolutely need one.

  2. Guru,

    From your pic, it's clear you are into cars ;)

    I'm not into cars; I'm more a scooter man. Must be the rounded bottom... LOL!

    Just in jest. Don't be party-pooper lah! Imagine 8 years ago someone tried to dissuade you with facts and figures, would you not buy your car?

    Boys will be boys ;)

  3. hey Musicwhiz,

    I wonder how much can we save if I did not drive sometimes really. I am pretty sure I would not drive if I am not in the sales line..

    Hey SMOL,

    I didnt wana learn to ride bikes as I didnt want mess up my hair hahaha

  4. A successful car loan is a great way to build up a solid credit rating and set yourself up for a long future of mortgages and small business loans. And, of course, once the car is paid off, it's all yours. You can sell it, trade it or hang on to it for many happy years of fun, debt-free motoring.structured settlement cash