How Much Do You Need to Earn Before You Even Think of Buying A Car In Singapore?

True everyone got sweet spot, but car is really much more exp than the other activities u state. First off you have to pay like 50-70k, then every month need to spend 2k+ on maintaining the car. The rest of the “hobbies” like fine dinning, holiday, camera, branded bages etc are still manageable for a 4k take home pay, but car is really asking for trouble.

Originally Posted by Unregistered

average car cost for a bnb car (100k) is around 2-2.5k per month inclusive of installment (~1k/mth), road tax (~60/mth), insurance (~200/mth), parking (~100/mth), fuel (~300-500/mth), and misc like servicing, fines, erp.

someone earning 5k can afford a car as take home is 4k and minus 2.5k (worse case scenario) you have 1.5k left to spend for the month. or you can take public transport and save almost 2k/mth that you can use for investment/holidays/restaurant meals. however once you drive you wont go back, enjoy your commute to work with nice music and air con, no squeezing with others in trains and buses. no fear of going out during heavy rains, straight a to b instead of waiting for bus and train. able to travel to ulu places without waiting for cab, sometimes call cab also wont come when you are leaving ulu places. buy yourself some time using money and get to enjoy car ownership.

some people will never understand it though, think you are mad for spending 100k on a car and still need to pay petrol and parking. we cannot blame them as everyone likes different things. these people may think nothing of spending 5-10k to go on holiday twice a year to exotic locations like maldives or europe, or 7k on the latest dslr camera. everyone has their weakness which they will spend money on.

Originally Posted by Unregistered

East to own a car. Just sell your first BTO flat and buy a cheap second BTO flat. Use your profit to buy a new car, pay in full cash. You get new flat and new car. So lucky!!

Many people doing this. They get two chances of buying cheap BTO flats. Not surprising why there are many young families owning new cars. COE prices have not come down much and likely to go up because of demand from cash rich Singaporeans who flipped their BTO flats.

Illustration

1. Buy first BTO flat for $200k.
2. After MOP, apply for second BTO flat for $200k.
3. When they got keys for second BTO flat, sell first BTO flat for $500k. Make $300k profit.
4. Use cash of $100k from selling first BTO flat to buy new car, pay in full cash.
5. Use cash profit of $200k from selling first BTO flat to pay for second BTO flat, paid in full cash.
6. Finally get BOTH new BTO flat and new car.
7. This is the fastest way to become rich in Singapore. That's why demand for new BTO flats is so high. People become very rich from buying and selling BTO flats.

Originally Posted by Unregistered

To be really comfortable I would recommend getting a normal Jap sedan car only if your annual income inclusive bonus & allowance is at least 200k. If you want to cringe & save, can push it down to 150k salary, anything less than that is not recommended.

Quite sensible advice.

For me and family, we make 290k pa and instead of buying a car, we prefer to save the $ to buy property. We are now looking forward to collect passive income from our HDB while we enjoy the condo for a few years.......

Originally Posted by Unregistered

Many people doing this. They get two chances of buying cheap BTO flats. Not surprising why there are many young families owning new cars. COE prices have not come down much and likely to go up because of demand from cash rich Singaporeans who flipped their BTO flats.

Illustration

1. Buy first BTO flat for $200k.
2. After MOP, apply for second BTO flat for $200k.
3. When they got keys for second BTO flat, sell first BTO flat for $500k. Make $300k profit.
4. Use cash of $100k from selling first BTO flat to buy new car, pay in full cash.
5. Use cash profit of $200k from selling first BTO flat to pay for second BTO flat, paid in full cash.
6. Finally get BOTH new BTO flat and new car.
7. This is the fastest way to become rich in Singapore. That's why demand for new BTO flats is so high. People become very rich from buying and selling BTO flats.

if you do this then you are not even rich in the first place. 5 years on and still earning below 12k combined?

Cars are cheap actually.

Let's say you buy a $100k car. You have $50k cash for downpayment. So you loan $50k over 5 years. You just need to pay $10k pa plus interest to be able to afford the car. If your family income is $100k pa, you have no problem owning a car. More than half of families in Singapore earn $100k pa, so not surprising why many families can afford new cars.

Another big reason is the cheap BTO flats. Because it is so cheap, families will just use their CPF to pay the loan so they have a lot of take home pay to pay for the car loan.

The days of $40k COEs are over. If you want to buy a car, just buy now. Don't be stupid to buy those $150k - $200k cars. You're just throwing away your money. Go for reliable $100k cars. There are many in the market. Don't be a snob.

Thanks for the article. Great, you are using the "basic" of everything, and the cost of owning a car is already so high. Imagine buying a more decent car, that would cost even more. The COE is too expensive already, I cannot afford a car with the COE so high.

Buying a car is expensive enough, but owning the car, maintaining it for daily use, the price is just too expensive. When do you predict COE prices to drop to $1?

Originally Posted by Unregistered

Thanks for the article. Great, you are using the "basic" of everything, and the cost of owning a car is already so high. Imagine buying a more decent car, that would cost even more. The COE is too expensive already, I cannot afford a car with the COE so high.

You must be single?

What do you think is the average net worth of people who drive E200 or BMW 320?

Originally Posted by Unregistered

What do you think is the average net worth of people who drive E200 or BMW 320?

For sensible and conservative people, their household NW would be more than $5M before they buy those type of cars.

For the showoff, with no sense of long term planning (for their future/retirement), their NW could be anything from $600k to $1M and they would think that they deserve those kind of cars.

We belong to the ultra conservative type. With over $6M in HH NW, we are still happily driving our mass market Jap cars - just that my wife and I have our own car. And it makes a lot of sense too. Jap cars are efficient and reliable and come with a lot of new tech features!