Published on August 22nd, 2020 | by Daniel Sherman Fernandez0
Driving A New Car Or Not In Todays Economy
We look at an option available in the Malaysian market today.
I have been doing this job for 5 years now and a lot of people wonder why I myself don’t drive a new car. Well, the simple answer to that is, I don’t think it’s worth it for me. I’ve been working from home since I started at dsf.my, and my very old used cars are reliable enough to get me around the city in relative comfort.
I have also been lucky enough to borrow test cars to see my parents live in Johor Bahru once a month. But when the Movement Control Order began, I had a real problem. I had to transport my mother, who was stuck in Subang Jaya, back to Johor Bahru and I didn’t have a new car to do the job. There was no way I was going to risk sending her back in my 30 year Honda, especially considering how limited the window for interstate travel was.
Anyway, long story short, I have come to the realization that test cars are no longer something that can be relied upon for my interstate travelling needs. I’ve also realized that short term car leasing still has a long way to go before I can fully rely on it, especially if a trip is planned at the last minute. I am beginning to want and really need the freedom that comes with a newer car.
But I still am a little risk averse, and I am not into taking a long, 7-9-year-old car loan. My brother did that, and halfway through his loan, he went overseas for work. I don’t want to be in his position where I can’t drive the thing I’m paying for and I can’t sell it as I’ll end up losing too much money.
That’s why I am looking at actually using GoCar Subs. This is a new subscription service that expands upon GoCar Subscription, which launched in 2019. GoCar Subs actually draws from a much larger pool of car models and brands. That means, unlike Renault Subscription, I can actually think about buying any brand I want (subject to it being available/affordable, of course). It also means they’ve got some used options available. I don’t mind, even a 3 or 4-year-old car is infinitely safer and more suited to interstate travel than my current vehicle.
What’s more, I can choose a car without worrying about things like resale value or maintenance costs, as these are covered in the subscription fee. Even wear and tear items and regular servicing costs are taken care of. If I were going to buy new, I would have had to limit myself to just a handful of brands that were considered ‘safe’ bets. With GoCar Subs, that worry about surprise costs cropping up is out of the window.
Importantly for me, GoCar Subs is flexible in terms of subscription period. You can subscribe to car for as short as a week, but I’ll likely be going for a 12 to 36-month contract period, as monthly payments are lower the longer the tenure.
Plus, I can get 50 per cent off my first 3 months for these longer plans with the promo code FRESHSTART. (PS, you can use this code too).
There’s also one other thing GoCar Subs can do, but this doesn’t apply to my situation. You can convert your current vehicle to a subscription with them. Essentially, what you’ll be doing is selling them your car and then leasing it back from them. The advantage of this is you essentially get your resale value upfront today, and lose the worry of maintenance and reliability problems in exchange for a fixed monthly fee. I think if I had a slightly aging European car, I may consider this.
Now, I know a lot of traditional car buyers are probably asking what the catch is. But I’ve done the math and it looks pretty solid. Let’s say I was looking at a used Honda Jazz from 2014. Buying it from a used car dealer would cost more upfront (20 per cent down payment, insurance, road tax), cost more to run (about RM2,000 a year not including fuel), and would cost me in loss of value when I sell it a few years down the line. Not to mention I’d still be paying something like RM1,640 a month for three years. I’d end up losing RM56,520 over 3 years!
With GoCar Subs, the same car for 3 years would be cheaper upfront (RM2,700, refundable) and have no other upfront costs, it would cost nothing but the fuel I use to run, and every month I’d be paying RM1,330 for three years. And when it comes to the end of the subscription period I can just send the car back and weigh my options again, instead of looking for a buyer and bargaining for every last Ringgit.
Anyway, what do you think? Seems to me there’s no way to lose with this plan.