I did a computation in 2010 (2.3 years ago) with my good friends 1.5 litres Toyota Vios. Then, you can pay for 10 years, the loan interest rate 2.2%. (See the result here)
It’s a whole different ball game now. We are constrain to only 60% of loan servicing and a higher interest rate and a shorter tenure.
One reader Lee Wen Loong actually mentioned this necessity to own a car to me.
So I did another computation this time with a
- Kia Cerato Forte 1.6L $93000 (including GST, March Prices)
- Loans from DBS Car Loan. (See here)
- 30 year old 0 NCD – Insurance $1800/year
- Season parking at $65 (home) + $70 (workplace)
- Road Tax – $744/year
- Cash card – 30/mth
- Miscellaneous – 20+++/mth
So the result is as follows:
Hmm it is higher than the last time but it will work out to be 41% of your disposable income if your disposable income is $4000. The good thing is that you expense this amount across 5 years instead of 10 years in the last one.
Of course disposable income is higher. The good thing is that your home can probably be paid by your CPF.
Give it a try. Tell me whether you are able to afford a car.