[Revealed]: The True Cost of Car Ownership in Malaysia

There are a lot of hidden costs of car ownership in Malaysia beyond the monthly bank loan repayments. In this article, I will be compiling the actual ownership costs for the five best selling cars in Malaysia:

  1. Perodua Myvi (hatchback)
  2. Honda City (compact sedan)
  3. Perodua Aruz (7 Seater Compact SUV)
  4. Proton X70 (5 Seater SUV)
  5. Honda HRV (Compact Crossover)

I’ve selected these car models based on what I see dominating the local roads as regular daily cars from different categories, hatchback, sedans, and the ever-popular SUV.

Malaysia is one of the most expensive countries in the world to own a car, and the majority of our citizen’s Bankruptcy cause is from the inability to repay hire purchase (car) loans. It would be vital to educate ourselves on the real cost of car ownership.

At the end of this analysis, You’ll know exactly how much it would cost to own a car in Malaysia and how it would tie with your personal finances. I’ll also recommend an all-rounder vehicle from the list that strikes the right balance between economy, practicality, and value.

Let’s get started:

Total Cost of Ownership by Brand

  • SUVs (Proton X70 & Honda HRV) have the highest cost of ownership.
  • Both the Perodua models (Myvi & Aruz) has the lowest cost of ownership.
Table of Breakdown Costs for 5 Best Selling Cars in Malaysia

These are my assumptions for the cost calculations:

Average Monthly Commuter Mileage (km) – Source2,349
Average 1-year Mileage (km)28,188
Market fuel price (RM/L)1.90
Auto Financing Interest 3.25 %
Financing Tenure (7 years)84 months
All calculations are based on min deposit10%
Assumptions for Calculations

Yearly Running Costs: All the yearly costs are divided by 12 to get their equivalent monthly running costs.

Monthly Running Costs: Let’s not forget about the toll, parking charges, and carwashes. Notice that it costs more to clean an SUV than it does a regular car. A regular car (hatchback and compact sedan) will cost you around RM 10, but an SUV or MPV will cost you RM 15.

RM 10 for regular wash and RM 20 for ‘water wax’ whatever that is.

No Resale Value: I do not include the resale values. I assume there is no value to your car when you want to sell it. But in reality, there would be some residual value which you can consider as a bonus.

Now let’s break the summary down:

Bank Installments Vs. Total Monthly Commitment

It’s easy to get carried away when shopping for a new car. Most people will only look at the monthly repayments and conclude they can afford the car:

RM 1,576 a month for a big Proton X70 for your family? Hey, that doesn’t sound too bad now, does it?

But wait, when you add up the petrol, parking, toll, insurance, maintenance, etc., the actual monthly costs to own the Proton X70 is now a whopping RM 2,842. That’s almost double the amount of the monthly installment you saw earlier!

The 3 largest monthly expense to own the Proton X70 are:

  1. Monthly installment (56%).
  2. Petrol (14%).
  3. Insurance Fund (10%) – this is often underbudgeted.

Below is the chart of the monthly installment (what you think you can afford) vs. the total monthly commitments (the actual costs) for each car:

The total monthly commitment cost for all car brands is around twice the monthly installments.

When it comes to picking a car, it would be wise to look at the total monthly commitment costs and not just the monthly installments.

i.e., If you only have a RM 1,500 budget to pay for everything car-related each month, buying a Honda HRV or Proton X70 would stress out your finances. With that budget, what you can actually afford is the Perodua Myvi.

Now let’s move on to petrol:

Monthly Petrol Costs

The monthly petrol costs are calculated using the average mileage in a month (2,349 km) divided by its fuel consumption (i.e 14 km/l) reported on carbase.my multiplied by the current petrol price (RM 1.90/L):

Best Fuel Efficiency: The two Honda models and the Perodua Myvi scored the best fuel efficiencies in this survey.

Worst Fuel Efficiency: The SUVs: The Perodua Aruz and Proton X70. More weight, bad aerodynamics, and bigger tires contribute to the worst fuel consumption in this survey.

New Vs. Old Technology: The Perodua Myvi and Honda City have the same engine capacity of 1.5L. But the Honda has slightly better fuel consumption due to its superior engine and gearbox technology.

SUV Vs. Car: The Perodua Aruz and Myvi use the same engine and gearbox, but their fuel consumptions differ by quite some margin:

This shows the effects of added weight, bigger wheels, and worse aerodynamics to a car’s fuel efficiency.

Road Tax Costs

Yearly road tax is charged based on the engine capacity. The larger the engine capacity, the more road tax you have to pay. Here’s an online road tax calculator.

Quite a difference in road taxes between our test subjects. If you’re only commuting alone in the city most of the time, is a large engine necessary?

Insurance Renewal

The higher the value of the car, the more expensive the insurance. The rates are assuming 0% deductions (NCD).

Insurance goes down each year because:

  1. The value of your car goes down (sum insured value).
  2. If you have no insurance claim, you are entitled to discounts on your renewals (NCD).

If you decide to get the Honda City over the Honda HRV, you’d be saving RM 3,402 – RM 2,479 = RM 923 in the first year.

Let’s take the Honda HRV for example, the yearly insurance renewal cost is RM 3,402. I divide this by 12 months so you can allocate enough money each month for the insurance payment.

If you don’t allocate enough money, when your insurance company sends you a renewal invoice, you’d be scrambling to gather RM 3,402 from your savings.

5-Year Servicing Costs

Most cars have a 5-year warranty. To not void your vehicle’s warranty, it needs to be serviced at an authorized dealer during those five years.

These are the total costs based on the car manufacturer’s website:

The total 5-year maintenance costs are divided by 5 years then by another 12 months to get the monthly maintenance fund:

Lowest Maintenance Cost: Both the Perodua models have the lowest servicing costs amongst our car models in comparison.

Highest Maintenance Cost: The Proton X70’s SUV servicing cost is the highest and by a large margin. Why? this model is a rebadged Geely Boyue from China.

The Geely Boyue is co-developed between Geely and Volvo. Parts and expertise need to be imported, hence the high maintenance costs.

Let’s move on to tires:

Tire Replacement Costs

My Perodua Myvi tire threads, still OK after 40,000+ km

New Tires typically last around 60,000 km until the threads wear out. How long does that translate to the average consumer?

Well, if we look at the average commuter car mileage of 2,349 km a month, in a year, that’ll be around 30,000 km in a year.

So the average Malaysian commuter car should change a set of tires once around every two years.

I know the mileage quoted seems a little high. But if you commute less than 10 km one way to work or only use your car to do groceries, your tires will last a lot longer. But for our calculations, we are assuming all of these cars are used as commuter cars (39 km+ one way).

The cost to change all 4 tires after 2 years is divided into 2 to get the yearly tire costs. It makes sense for you to budget for this each month so it won’t shock you when you eventually need to change them:

The cheapest tires are the ones that have the most users. In Malaysia, those are tire sizes below 16 inches in diameter. Anything above 16 inches, the tire prices skyrocket.

The cheapest tire cost is for the Perodua Myvi at RM 156 a piece (please do your own research for your correct tire size).

The Proton X70 uses an unnecessarily large tire size of 19 inches. Large tires look cool but are really expensive to replace. It will set you RM 586 apiece:

Source: Lazada

Tire takeaway: SUVs are taller because their suspensions are jacked up and use larger diameter tires. These tires will cost you more to replace, and generally require more energy to move (worse fuel economy) compared to a standard sedan.

Total Interest Paid

This is pretty straight forward. The more you borrow, the more you pay in interest.

If you’re contemplating between 2 cars, this chart will help to persuade you to a decision.

For example, if you’re planning either to get the Honda HRV or the Honda City, take a look at the difference in interest. That’s RM 24,288 – RM 17,352 = RM 6,936.

What can you do with an extra RM 6,936?

Do You Really Need an SUV in the City?

An underpowered SUV that I rented once in Ko Tao, Thailand

As can be seen from this analysis, SUVs will almost always cost more to own than ordinary cars.

Compared to a sedan, an SUV is typically slower, heavier, consumes more petrol, tires cost more to replace, harder to park, and generally doesn’t handle as well due to its high center of gravity.

Most people are willing to accept these trade-offs simply because they want to sit up high and be a part of the trending SUV lifestyle.

via GIPHY

Are the extra costs of owning an SUV worth it for you, especially if you’re always in the city? To me, it isn’t. As a city-dwelling Malaysian, having a small, fuel-efficient city car would make a lot more sense.

The All Rounder

From that list, I would personally avoid SUVs at all costs. I just don’t get the whole SUV hype, it just doesn’t make any sense to me.

On paper, the Perodua Myvi seems like the most financially smart car to buy. But, as I owned two myself, it’s perfect for zipping around town but is not so comfortable on occasional road trips and bumpy roads.

If I need an all-rounded decent family car, my pick would be the Honda City, because:

  • Small exterior, easy to maneuver and park in the city.
  • Affordable to buy, low total interest.
  • Fuel efficient with a small engine.
  • Spacious and comfortable.
  • Popular, so it can hold on to its resale value pretty well.

Car Ownership & Personal Finance

Cars in Malaysia are expensive! Thanks to car taxes, Malaysia is in the top 10 most expensive countries in the world to own a car:

Source

Despite the stigma, the average Malaysian household owns at least two cars.

Bankruptcy: As of 2019, more than 80,000 Malaysians are declared bankrupt, and most of it is due to unable to pay car loans.

Don’t try to keep up with the Joneses: Shopping for a car is a very emotional event, and unfortunately, a lot of people get carried away without properly budgeting themselves.

Be honest with ourselves and get a car that suits our needs and not reflect our ego. We all would have more disposable income at the end of the month to be channeled to something more meaningful, like:

  • Sending your kids to join hobby classes to build up their skills.
  • Go on more frequent vacations.
  • Go out to your favorite restaurants more often.
  • Have more allowance to treat your family and friends.

Hope this article has been useful. Please share this with your friends and family!

Helmi Hasan

Hi, I'm Helmi Hasan, the founder, and writer for the personal finance blog, Balkoni Hijau. Read more in the 'About Me' page or follow me on Twitter.

13 thoughts on “[Revealed]: The True Cost of Car Ownership in Malaysia

  1. Thanks for sharing such a detailed and practical fact of car ownership cost in Malaysia. Many readers wud probably need to start living near mrt /lrt station and book a rented car soon after reading this article.

    1. Thanks Alex. Considering how much the average Malaysians make, I am constantly perplexed with the number of luxury cars on the road.

      Either Malaysians make more than declared, or everyone’s in debt up to their eyeballs.

      What do you reckon?

  2. The PROTON x70 Interest how come get 3.25% ? why i can get 2.33% from bank ? 7 years perior and loan amount also same ? can i know u Apply which bank ? and INSURANCE just 3.2k and your INSURANCE is 3.4k ? so expensive your x70 ….

  3. There are other two scenarios to look at also:

    1) What is the true cost of buying a second-hand car when compared to buying a new car?
    2) What if the person buying the car also use motorbike kapchai as part of the effort to bring down the cost further?

  4. I’m shook seeing the monthly cost of a Myvi.
    I wonder how some millenials can keep up with owning cars like Audi, Merz sport lol

      1. Right.. Some of them that I met said that they paid themselves.
        I think car maintenance sure sakit punya la hahah
        I know some people that drive bmw but barely can put food on table so yeah lol

        1. Everyone has a different way to enjoy life. But having a nice car at the expense of can’t put food on the table is a little too much IMO.

          1. So people said, cannot judge a book by it’s cover. Kita tak tahu their life macam mana.. Haha
            Anyway, I like to read post like this. You must have done a lot research, besides your own experience.

  5. Hi Helmi Hassan, thanks for this good write up.

    At least this has triggered me on the cost of owning an SUV.

    For whatever reason, I still can’t wait to ride my PROTON X50. Haha

    Thanks, bro.

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