Stress of Owning A Car in Malaysia

Buying a car can be really costly to young adults of low to medium income group in our country these days. I worked out a basic calculation on the average income for a young executive to have a basic idea on an individual’s financial situation.

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Assuming that a young executive with 3-4 years of working experience, and is earning about RM3,500 a month. He has committed to his parents and monthly household bills to about RM900 per month (Note: This is just a rough estimate and it varies depends on the location of stay).

Other monthly expenses such as paying for personal insurance, food, utility and phone bills, entertainment expenses amounting to RM1,000. Of the remaining RM1,600, RM1,200 is channelled to his loan repayment for car, petrol, toll and parking fees.

If there’s no additional spending on other items, he will be able to save about RM400 a month only. In this case, I’m assuming that he is living with his parents so there’re no rental expenses incurred.

As you can see, the expenses on his car alone take up one-third of his monthly income, and this has not yet included the depreciation of the car which could easily range from 10- 20% per year.

Due to the car loan repayment period can last from 5-9 years, many have to prolong their plans to purchase a house. Thus, this limits their capability to own a house later as the prices of the houses going up amid rising inflation throughout the years.

The above scenario shows the typical lifestyle of a low to medium-income group in our country. Based on a recent survey conducted by, it shows that quite a great number of fresh graduates are earning at an average of RM2,500. And almost 80% of households in M’sia are earning less than RM4,000 a month (Source: Performance Management Delivery Unit)

These kind of earning and spending patterns can be alarming and reminds me of my first car, a Perodua MyVi, which cost me RM42,700, equivalent to approximately 1 year of my salary in 2009. Those days, affordability was the only concern to me, and it became my reliable companion for almost 5 years as I could not afford to buy a luxurious car now.

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I used to practise frugal living and delayed gratification. Even though my income had increased, I rode to work for most of the time. In fact, it’s astonishing to know that the car sales in our country increased by 4.5% in year 2013 (compared to 2012), which is higher than our population growth rate of about 1.5% – 2.4% every year. If still letting this situation to go, I can see more and more cars on the road, noise pollution, higher petrol consumption, more accident to occur and the need to build new roads to reduce traffic congestion. I hope the authorities should be more proactive in coming out the ideas in solving the foreseeing bad situation.

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