Buying Your First Car
A car is usually one of the first big purchases most Malaysians make and probably the first big ticket purchase for many young Malaysians. However, the decision-making process is very daunting as we navigate car variables – cost, affordability, protection, maintenance – that come into play when considering purchasing a car – new or used.
In today’s climate, most Malaysians earn an average starting salary of RM 2,500 to RM 3,000, combined with escalating cost of living especially in the city, the ability to afford a car, either new or used, dwindles.
Bosch Automotive Aftermarket Malaysia (Bosch) organized a comprehensive experts roundtable session with RinggitPlus and Allianz General Insurance Company (Malaysia) Berhad to discuss and provide insights on financial planning, vehicle protection and car maintenance factors and their cost-benefit perspectives when purchasing a first car.
“When purchasing a car, you have to ask yourself 2 important questions – ‘Do you need it?’ and ‘Can you afford it?’. The biggest misconception most first time car buyers have is that as long you can afford the down payment and the car loan installments, you are in the clear”, said Hann Liew, Founder and Director, RinggitPlus Malaysia.
On the topic of insurance, Sazali Abdul Rahman, Head of Franchise, Allianz General Insurance Company (Malaysia) Berhad commented, “Be it a new or used car, there are a set of detariff factors that we take into account to determine the insurance premium. These detariff factors include age of vehicle, vehicle make and model, gender, insured age, high-risk theft vehicle and cubic capacity”.
Sazali added that used cars usually have a lower insurance premium when compared to new cars. For example, comparing a 3-year old car vs. a new car, the difference in premium is 4.4% for national cars, 13% for Japanese cars and 22% for European cars.
Hann and Sazali both also stressed that there are in fact many hidden costs that we should factor in while determining our ability to afford a car. These hidden costs create a sum called Total Cost of Ownership (TCO) that includes depreciation, interest, petrol, parking and toll, insurance, road tax and car maintenance on top of the down payment and loan installments. As a rule of thumb, your monthly TCO should not exceed 20% of you gross income and to follow a 36% rule of debt-to-income ratio.
To avoid increasing your car’s TCO in the next few years, car maintenance is an important cost factor.
“When it comes to car maintenance and auto parts, choose what is best for your pocket and for your car. If you’d like to better optimize your car maintenance budget, either DIY in the upkeep of some auto parts such as changing your own wiper blades or opt for reputable brands for auto spare parts as they can lower your car maintenance cost by 25-50%”, said Go Boon Wah, Marketing Manager, Bosch Automotive Aftermarket Malaysia.
Go concluded the session emphasizing that a regular proper maintenance is the life of the car and it is important to know relevant information on the supporting eco-system such as knowing which mechanic you can trust, which auto parts to maintain and change, which loan is best and which insurance works best for you.
A Bosch Automotive Aftermarket survey revealed that 35 percent of Malaysian drivers spend an average of RM21-RM40 on wiper blades followed by 28 percent and 15 percent spending RM41-RM60 and RM80-RM120 respectively. The survey also revealed that 70 percent of Malaysian drivers viewed wipers as very important for driver and passenger safety.
However, 53 percent of drivers polled indicated that they stretched the lifespan of their wipers beyond 12 months; only 32 percent changed their wiper blades every year. Bosch recommends drivers to inspect the condition of their wiper blades regularly after the six-month mark, and to replace them once every year.
“While many wipers today can last up to a year, we highly recommend inspecting the wiper blades every six months for wear and tear,” said Pang Yoon Kong, country manager of Bosch Automotive Aftermarket Malaysia.” He also added that the rubber of a wiper blade will deteriorate over time due to road debris, chemicals, and climate exposure, aside from wear due to exposure to the weather elements.
“Drivers who should take heed of signs on wiper blades wear and tear to ensure that their wipers are functioning well during wet weathers for safety ,” commented Pang.
“Especially in a tropical country like Malaysia with heavy rain and a monsoon season, drivers depend on wipers to clear their windshield of rain and improve visibility. The cost of wiper maintenance is small but the role it plays in ensuring the well-being of drivers and their loved ones is big,” commented Pang.
“Drivers who should take heed of signs on wiper blades wear and tear to ensure that their wipers are functioning well during wet weathers for safety ,” commented Pang.
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