Beyond the downpayment and monthly instalments


Getting the keys to a car, whether it’s new or pre-owned, is an exciting prospect. But more often than not, car buyers, particularly first timers, overlook the fact that the ownership of a vehicle goes well beyond just being able to afford the downpayment and monthly instalments.

The car buyer must take into account expenses incurred to run, maintain and insure one of the biggest purchases in life. To generate more awareness on this topic, Bosch Automotive Aftermarket Malaysia (Bosch) organised an experts’ roundtable session recently with RinggitPlus and Allianz General Insurance Company to discuss and provide insights on financial planning, vehicle protection, car maintenance issues and their cost-benefit perspectives when purchasing a first car.

Questions to ask before pulling the trigger

“When purchasing a car, you have to ask yourself two 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 downpayment and the loan instalments, you are in the clear”, said Hann Liew, Founder and Director, RinggitPlus Malaysia, a leading personal finance portal.

Experts representing insurance, automotive parts and personal finance sharing valuable knowledge.

On the topic of insurance, Sazali Abdul Rahman, Head of Franchise, Allianz General Insurance Company (Malaysia) Bhd 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 three-year old car against 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 stressed that there are in fact many hidden costs that should be factored in when determining the 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 instalments. As a rule of thumb, your monthly TCO should not exceed 20% of your gross income and to follow a 36% rule of debt-to-income ratio.

Go Boon Wah of Bosch Automotive Aftermarket Malaysia expounding on the benefits of choosing reputable aftermarket spare parts.

Vehicle maintenance is key in managing TCO

“When it comes to car maintenance and auto parts, choose what is best for your pocket and for your car. To stretch your maintenance budget, one can either DIY in the upkeep of certain auto parts such as changing your own wiper blades or opt for reputable spare parts brand such as Bosch as this can lower vehicle maintenance costs by 25% to 50%”, said Go Boon Wah, Marketing Manager, Bosch Automotive Aftermarket Malaysia.

Go concluded the session by emphasising that regular maintenance is the life of the car and it’s important to learn the vehicle maintenance eco-system available in the market including identifying trusted workshops and mechanics, which auto parts to maintain and change, as well as which loan financing and insurance coverage that work best for you.

(Click here to view the presentation by Bosch Automotive Aftermarket Malaysia)


Denis Wong

Denis Wong

In the age of misinformation and spin, Denis prefers candour and a counterpoint, because the truth matters.
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