Buying a car is one of those milestones that many young drivers look forward to, and many others dread. Whether you think it's a necessity or a frivolous expense, however, there's no denying that it's a big financial commitment. But that commitment doesn't end once you've plunked down the cash and picked up the keys. Instead, there are a number of expenses that you have to consider before buying your first set of wheels.
1. Registration and insurance
Even if your car spends the entire year stuck in your garage, these expenses are necessary. Registration costs will vary from car to car, but hovers around P3,000 for a regular-sized car. Don't expect to spend less than P20,000 per year to insure a brand-new sedan.
Even with gasoline and diesel prices at record lows, heavy rush hour traffic plays havoc with a motorist's budget. A compact car which can easily get 10-12km/L in free-flowing urban traffic will be lucky to see more than 6km/L in the rush hour crush. If you've got a 23km commute, that effectively doubles your weekly fuel budget from P500 to P1,000.
If you work in Makati and don't have a corner office with its own parking slot, you will learn, firsthand, the meaning of "Survival of the Fittest." Nailing a slot in one of the limited open parking lots will keep your car from getting clamped, but can cost up to P300 over a nine-to-five shift. Street parking can be accomplished with just P160, but you'll be running down to your car every two hours to move it to a new spot. You can keep costs to around P100 a day via mall parking or all-day parking, but the geography, schedules, and stars all have to align perfectly for this to be feasible.
Not everyone will have this issue, but some of us spend up to P400 a day on toll fees.
5. The wash and wax
Even if you don't have the time or the equipment to do-it-yourself, your car still needs to be washed on a weekly basis and waxed every two months or so. Otherwise, you'll be stuck with a stiff bill for car repainting after just five or six short years. A cheap wash adds between P60 to P100 per week. A wax job costs three times as much.
That's "preventive maintenance" costs. Your car needs to see the doctor every three to six months. While oil change intervals are often rated in kilometers, there's also a time component involved, and many manufacturers ask that you come in every few months whether or not you've hit the magic 5,000km or 10,000km mark. Some manufacturers make this painless for you, giving it free for the first few years as part of the package, but most will charge you. Expect to spend some P2,000 to P5,000 or so for regular oil changes and check-ups, at least twice a year, and some P10,000 to P20,000 for major intervals, at every 20,000km or every other year, whichever comes first.
7. Incidental repairs
A lube job isn't all that's needed to keep your car happy. Accidents do happen, which is why it pays to pay insurance, as it keeps the bill down to a manageable participation rate--usually a flat rate of around P5,000 or so--instead of the tens of thousands it can cost to replace mangled metal and plastic bits. What insurance and warranty won't cover, however, are flat tires and worn brakes and clutches. Expect to need a battery every two years, as well. Safe to say, it's a good idea to set aside P20,000 in any given year for incidentals, and to set aside P20,000 more in case you use that all up.
8. The high cost of living
Motoring, despite the costs, is liberating. And liberation means the liberty to spend more money on out of town trips and leisurely drives. The cost of this will vary from driver to driver, but a weekend trip to the mall can easily cost you some P500 in fuel and parking expenses. Whatever you have left will determine whether you've gone to the mall for dinner and a movie, or to pick up more groceries to eat at home.
Owning a car isn't cheap, but it doesn't have to be complicated. Budgeting these oft-overlooked costs can be tricky, especially if you've spent a sizeable portion of your savings on your shiny new car. But by deferring payment through a smart, low-interest loan like Security Bank's Auto Loan, you can keep yourself liquid enough to deal with these expenses as they come. Offering loan amounts of up to 80% of the vehicle’s purchase price and with payment terms ranging from 12 to 60 months, Security Bank’s Auto Loan is one of the local market’s most competitive.
By making sure you get Better Wheels and Better Deals, Security Bank’s Auto Loan offers All in Financing where you just need to pay the downpayment of the car and free yourself from spending an additional amount for the chattel mortgage fee and motor car insurance for the first year. And because it’s with Security Bank, you get very low monthly amortizations! It's open to all who apply for a Security Bank auto loan from February to June 2016.
Get started right now by filling out the Security Bank Auto Loan application form.
For more information on Security Bank's auto loan, click here.