For Pinoys, especially for young urban professionals, buying a car is a popular financial goal that is why a lot of banks offer auto loans.
You’ll just need to save up for the down-payment, apply for a loan and pay the monthly amortization for the next several years. Some companies shoulder a portion of the purchase cost as part of employment benefits like Pharmaceutical companies.
Buying a car these days become easier but keeping up with the coasts of owning one has become harder than before. With rising price of fuel, tires, and other maintenance is even more expensive.
Keep in mind this list of expenses you need to budget before you buy that dream car of yours. Make sure your income and cash-flow can afford all these expenses.
Fuel
Determine the total distance you probably drive every month to estimate how much fuel expense you’ll need.
After you determine how much you need per month for the fuel, compare with your current monthly transportation expenses.
Compare Expenses of Owning a Car VS Public Transportation
Monthly Amortization + Fuel per month =
Fare x # of times you ride a public transportation per month =
Which is more convenient and which is more expensive?
Toll and Parking Fees
Car owners should take into consideration when tollways and parking fees they need to pay when computing their budget. It may not paying for a 25 or 50 pesos parking fee but after a month, if you add it up you’ll be paying 625 to 1,250 pesos per month considering that’s the parking fees where your location charges. Other parking area charges per hour.
When you go to the mall, you’ll pay a hundred or more. It maybe consumable but still, you are spending your money that means additional expenses on your part.
For example, someone living in Alabang who works in Makati will have around P9600 worth of monthly expenses because of SLEX tollway and Makati parking fees.
Repairs and Maintenance
Every 3-4 months your car needs to have an oil change given that your mileage is 5000 kilometers or more. You will buy new tires every 4-5 years. For cars like Corolla Altis, a new tire is around 4,000 pesos or more x 4 tires so that would be around 16,000 or more in total. Plus car washing expenses and other preventive maintenance services that you’ll have to pay. The cost of preventive maintenance depends on the brand and model of your car and how you use it.
You’ll spend around 30,000 pesos for yearly repairs and maintenance assuming your car is in good condition. As your car becomes older this expense will slowly but surely go up and the value of your car depreciates overtime.
LTO and Registration Fees
The annual LTO registration fees, emission testing costs, and the price of CTPL insurance and a number of necessary expenses will cost you around 3,500 pesos or more per year (depending on the model of your car).
Vehicle Insurance
Getting car insurance is optional compared to The Compulsory Third Party Liability insurance that is mandatory but getting car insurance is recommended.
Accidents and or damage won’t happen every year but a having a peace of mind against such financial emergencies have no price. So getting a comprehensive car insurance that will cover auto accident repairs, bodily injury, and property damage will be great. On average, insurance premium will cost you 15,000 pesos a year.
The Total Cost of Owning a Car in the Philippines
Your total expenses for buying a car would be around 32,000 pesos per month for the first 5 years assuming you have 17,000 monthly amortization with 5-year loanable term for your car. Plus the cost mentioned above.
You will continue spending around 16,000 pesos per month or 192,000 per year from the costs mentioned above once you’ve paid your loan in full.
The above estimate computation is based on March 2018 in Metro Manila. You may want to do your own research for the current costs of each expenses for your dream car.
You should check not only if you can afford to buy a car but also, see if you can afford to own it.
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