A car isn’t for everyone – especially in Singapore. While that statement may piss you off a little bit, that’s just the way the system is rigged. The hideously inflated cost of owning a car is meant to discourage the vast majority of Singaporeans from owning a car.
Well, officially prices are at Kaiju-like levels to prevent Singapore’s roads from becoming too overly congested (and to get you to take public transport). That’s why the Vehicle Quota System (VQS) and Certificate of Entitlement (COE) are in place – to crush your dreams of car ownership.
But let’s say that you choose to defy the Gods by saving up all of your hard-earned cash to purchase a car. You buy the car with a 50% down payment and take out a 5-year car loan. End of story?
No my friend – that’s not even the true cost of a car. This is:
Final Note: Buying a car is a huge decision that can have a major effect on your financial situation. Think about the total cost of a car – and imagine all of that money in an investment portfolio earning 8% each year.
Unless you absolutely NEED a car because you have a job that can support the expense, it’s really much better to put that money to work either growing your retirement nest egg. Who knows? You might even be able to purchase a property down the road that you can rent out to start getting passive income!
If a liability that loses 10% of its value every year is worth more to you than building an investment portfolio that earns 8% ever year – well… that’s up to you. But if you want to learn more about investing, give our Investing Learning Center a look.
*This article was corrected on 26 Aug 2014 to reflect the changes in removal of car depreciation to the overall total.