AK was bullied and deprived of his mee pok dry.

Just now, for dinner, I decided to go get my favourite mee pok dry from a nearby kopitiam. 

There were two car parking lots left when I got there. 

A big BMW was before me and reversed into one of the lots.

So lucky to have one lot left for me, I thought.






When the BMW came to a stop, I saw that it was encroaching on the empty lot. 

As the well-dressed driver got out of the car with his equally well-dressed lady friend, I lowered my window and asked if they could center their car so that I could park in the neighbouring lot.

What happened next stumped me.






The woman looked at my car and said in a voice loud enough for me to hear, 

"His car so small. I am sure can fit. We no need to shift."

Then, they turned their backs on me and walked away.

OMG! 

They didn't even bother to talk to me!






I was speechless. 

I realised I was just bullied and didn't know how to respond.

Anyway, I was upset enough that I lost my appetite and decided to come home without satisfying my craving for mee pok dry.

Just now, I felt hungry and I cooked this for a late dinner:

Should I get a bigger car so that something like this does not happen again?

New material from my FB wall (11AM, 16 March 2015):

Latest update on my FB wall (4.20pm, 16 March 2015):

No problem with parking this time but this?

This is depressing.




Unrelated post:
Forced selling due to financial hardship.
(Why am I sharing this post? I have no idea.)

For good food or car washes, Singaporeans love to queue!

I don't like wasting time in long queues. Someone could tell me that a restaurant served great food and that I should try but I would give it a miss if I were to see a long queue of people waiting to get a table. Wait 30 minutes to an hour to get a table? Mental!

I was in the lift and a couple was talking:

H: The queue was so long. At least 10 cars in front of me. Queue till the road outside.

W: So many cars?

H: Yah. Chinese New Year's eve. Every year is like that. I waited almost 50 minutes to have the car washed.

W: How much?

H: $8.  (Seeing AK in the lift. H smiled and asked.) You got your car washed?

AK: Yes, I washed it myself. 

H: Wah! You have the time to do it?

AK: Haha... Took me 30 minutes. The shampoo and sponge cost me $6.50. Good for at least 20 washes. Way cheaper than going to a car wash too...

I think I said too much. The husband's smile faded but luckily the lift reached their floor and they got off then. I hope I did not step on someone's foot.

Actually, I see rather long queues at car washes all the time. It is not just during festive seasons.

Wait 30 minutes to an hour to pay people to do something that I could easily do? Definitely mental!

GONG XI FA CAI (to the people washing cars too)!

Related posts:
1. Laugh with AK!
2. AK polishes his car!
3. If we are not rich, don't act rich.

A true story about life insurance and grapes.

There are a few big ticket items in life. The biggest is probably the apartment or house we stay in. Another one is a car, for those who choose to have one. 

I know this may not sit well with some of you going by some of the response my blog post on the topic got but children are big ticket items too. 

Another thing that could become a big ticket item for some is the cost of insurance.

In all these, consume because we have to but if we over-consume, we are jeopardizing our finances. Do the necessary research before committing to any big ticket items. 

An apartment, a car, children or insurance. You name it. 

Don't just jump into it and think that things will sort themselves out.

The following is an email from a reader who wants to share with us why it is important to know what we are buying and if we have all the facts before making a decision:



Reader:
It's been a while since I last emailed you - I hope you have been keeping well.

I saw that you were getting a bit of flak in the comments section of your recent ILP blog entry. I just wanted to share with you that I thought it was a well written, informative and balanced post (no matter whoever who keeps challenging you to show figures that ILP investments ain't great).

Just thought i should let you know that i wished that i had read such a post like your four, five years ago as I was just graduating from school and entering the workforce.

You see, the first piece of advice we hear as we are entering the workforce is: you gotta buy some insurance. 

Everyone was doing it, my parents told me to do it. But at that time I was seriously misinformed - I had no idea at all what the difference was between endowment plans, ILPs or term (in fact my agent did not even bring up term insurance!). 

I signed what I believe to be an endowment plan that had some cover on dread diseases, death etc. There were funny things like yearly bonuses (if the market did well cos the plan was linked to some share investments too). 

Well it has been 4 years since and I have no idea how the plan is doing in terms of returns/yields at all. I suppose it is probably hard to distill out a yearly return because there is an element of health insurance to it (see how confusing it is for me).



So what I'm saying is: I wish I had read such a post like yours just as I was starting out. I wish I had been more informed. I would have bought term, invest the rest. Seriously.

But I'm not blaming anyone. We could look back and say that my insurance agent should have laid down the variety of plans for me, but at the end of the day, they work for commissions - so why would they bother to explain more, if not required as such by regulations? I don't blame them either.

And while I cant go back in time and buy term insurance, I'm really glad that somewhere out there a young person entering the workforce will hear about term insurance and the possible downsides of ILPs from your blog post and make an informed decision.

I guess financial sale persons are up in arms when they read postings like that because they feel they are being vilified as agents who put their own interest ahead of their clients. But but but, isn't that true? Don't all salespersons do that? 

That day, on the outskirts of a Japanese village, I chanced on a roadside store selling Kyoho grapes. I selected a bunch of juicy grapes and handed it to the store owner for payment. 

She put down the bunch I selected, motioned to another bunch and said it was better. And she packed it. Initially I was like, "Wah, so honest!", thinking that she was trying to help me select better grapes. 

When I came back home and opened the packaging, turned out that the hidden grapes behind were all rotten and giving out a foul smell. I had to throw half away.





So the moral of the story is: unless it is obvious to the sales person that you are going to be a repeat customer/ going to intro more customers to them, you are better off selecting your own grapes. 

And you best be knowing a thing or two about grapes, before buying grapes.

Related posts:
1. FREE Investment Linked Polices or Term Life Polices?
2. Slaving to stay in a condominium?
3. Sophisticated consumers lease cars, not buy.
4. What is our attitude towards having children?
5. Financially prepared to be married?

Develop habits now that will ensure we retire comfortably. (How to have a comfortable retirement?)

(Even when we are richer, keep our frugal habits acquired during leaner times.)
There are many ways to have enough money to retire comfortably from active employment. Win the top prize in the national lottery or inherit a similar amount from a rich relative, perhaps? Unfortunately, the chances of either case happening for the vast majority of us would probably be quite low.






However, this does not mean that a comfortable retirement is beyond us?

In an earlier blog post, I suggested that all of us have a chance to save 100% of our earned income and although it sounded unrealistic at first, after going through some numbers, it wasn't so unrealistic after all. Now, how does that blog post tie in with a comfortable retirement?

The beauty of the idea behind that blog post is that it isn't discriminatory. A person could be 25, 35 or 45 years in age, it simply doesn't matter. A person could put the plan in motion today and 13 years later, as long as the conditions are met, he would be receiving income from his investments that equals his earned income today.

So, if we think that we are able to retire quite comfortably with our current level of earned income, put the plan into action and 13 years later, we would be ready for retirement as we would be receiving an income from our investments that is equal to our earned income today.

For readers who are new to my blog and who have no idea what I am talking about, please read: Save 100% of your take home pay! What? Oh, I should have included people who have a bad memory. Er, ok, I will read it too.

Pause.

Pause.

Pause.

Read it? Then, let's continue.

So, if we are sure that our current level of take home pay is good enough to provide us with a comfortable retirement, we have to start saving 50% of this sum every month. That is one of the assumptions for the plan to work.

Probably, for people who have yet to enter into any big financial commitment, this would be an easier task. For most people who are married with a kid or a few, who have a huge mortgage or (heavens forbid) a few and a car or two, it could be quite difficult. I like to think that it is never impossible but it could be very difficult.

The biggest problem that I see is that people get used to lifestyles which are too expensive and scaling back would mean much discomfort which probably includes a loss of face which could be unacceptable to many people.







For example, I know a friend's dad who lived the high life, had expensive cars like SAABs and BMWs, had expensive watches, dined at fine restaurants, went to casinos and bet on horses. Today, he doesn't have much savings and if not for mandatory contributions to his CPF account, he wouldn't even have any money in his old age. Is he having a comfortable retirement? He doesn't think so.

Money not enough. What to do?

I have readers of different ages who write to me and, from my observation, I feel that readers in their 30s and 40s feel the most stressed out. They could be making $6,000 to $10,000 a month but many of them are not able to save more than 10% of their take home pay. So, asking them to save 50% of their take home pay is a tall order.

What would AK say to them?







The first thing that I would tell them is to go through all their expenses and decide which of them are needs and which of them are wants. The wants ought to be cut out and, then, see if there are alternative options which are less expensive to meet the needs. 

The second thing I would tell them to do is to stick to this simplified lifestyle and do not scale up with the next salary increment which they might get. The reason why many people don't ever seem to save any money is that they upgrade their lifestyles as they make more money in life.

Recently, a reader in his early 40s who makes more than $8,000 a month told me that he used to save about $500 a month of his take home pay but now he saves $2,000. This is not 50% of his take home pay but it is already a vast improvement.

Most of his annual bonuses were spent on family trips to faraway places and "don't know what" (his words) but he has decided to save these in future. This would increase his annual savings to be about 50% of his take home pay.

So, how did he achieve an additional $1,500 in savings a month?

1. He downgraded his car. He is used to having a car but he didn't need a luxury European make. It was a want. All in, he estimates that he now saves $700 a month because of this.

2. His family used to dine in restaurants every Sunday. This is now reduced to only once a month. This helps him save more than $200 each month.

3. He discussed with his wife on whether some of the enrichment classes they sent their two children to were necessary. He knew they were spending a lot of money on such classes but he was surprised at how much they actually spent. So, apart from classes which were deemed essential, lifestyle classes such as tennis lessons were axed. This helped them save about $600 a month.

The reader has also decided to cancel plans to buy a condominium and to stay put in his HDB 5 room flat. He feels more confident now about his ability to retire comfortably with his wife when he turns 55 and, by then, his children should be working and supporting themselves.

Of course, I reminded him that he would be getting some money from his CPF savings at age 55 and also a lifelong income from CPF-Life at age 65. That will certainly help fund his retirement.







While we are still able bodied and making plenty of money, our expensive lifestyles might seem affordable but get used to such expensive lifestyles now and we might not be able to retire comfortably many years later when things become more expensive.

Related posts:
1. A common piece of advice on saving.
2. Do you want to be richer?
3. Tea with AK71: A three point turn.
4. Free e-book: Retiring before 60 is not a dream.
5. To retire by age 45, start with a plan.

Buy a car and get an annuity.

I think we have read enough articles from financial bloggers on why we should not be buying cars in Singapore. 

Although I am generally in agreement, I have also said that, for some people, a car is a need and not a want. 





Generally?

Yes, if having a car would make a person economically more productive, then, the car is actually an investment similar to a capital expenditure in a business. 

Of course, add the fact that a car would probably improve our quality of life, it becomes an even more sensible proposition. (See related post #1.)

So, whether something is a need or a want depends on a person's circumstances. 

Like with many things in life, it isn't as clear cut as some people might make it out to be. 

We must not be too dogmatic about things. There will always be exceptions.





Of course, for many people, I believe, who own cars in Singapore, it is really more a want than a need. All I have is anecdotal evidence, of course. Correct me, if you like.

If we want to have a car simply because it improves our quality of life, because we don't want to squeeze ourselves into crowded trains or buses (if we are lucky enough to actually get into one during rush hours), because we don't want to join long queues for taxis when we go shopping for grocery or bulky items, because we have children and old folks at home, for examples, and if we have the resources, then, go ahead.

What do I mean by having the resources? 

Well, it could be a bit extreme but, to me, it is not just having enough money for 50% of the price tag and taking a loan for the rest. 

To me, it is about having enough money to pay for the car in full without having to take a loan. 





A car loan is actually more expensive than it seems and I have blogged about this before. (See related post #2.)

So, when a friend told me that he is thinking of taking a 60% loan to buy a car because he has enough cash to pay 40% of the asking price, I told him he shouldn't and, of course, went on to explain why. 

Then, he said that his parents are willing to give him $60K to buy the car (the car's price tag being $100K) because it is spare money to them and not making much by way of interest income but he feels bad about taking their money. 

I told him he should consider it and that surprised him.

I told him that if he has set his mind on buying a car, then, nothing anyone says is going to stop him. 




Rather than taking a loan from a bank and paying interest, he should consider taking the money from his parents and paying them interest instead. 

That way, more money stays in the family. 

Yes, take it as a loan and not a gift.

A loan to buy a car now attracts about 2.8% in interest cost per annum. 

A $60,000 loan would attract an interest payment of $1,680 a year. 

Over a 5 year period, this amounts to $8,400.




So, if he were to pay his parents on a monthly basis over a 5 year period, it would mean paying them $1,140 a month. 

In a way, it would be like a short term annuity plan for his parents too.

Mind you, I am not saying that I support my friend's decision to buy a car when he doesn't need one. 

I am just trying to make the best of a bad situation, if you will. 





The way I look at it, my suggestion would help his family save $8,400 in interest payments to an external lender. 

This is enough to pay for 56 months of petrol, assuming an average of $150 a month.

Related post:
1. Money management: Needs and wants.
2. A car loan is different from a home loan.
3. First time car buyer? Get a Mercedes Benz!
4. Tea with AK: A new car for $75,000!
5. Tea with AK: Bought a new car.

Forced selling due to financial hardship.

Vin Diesel, Michelle Rodrigeuz and Gina Carano amazed by the crazy car prices in Singapore!
"Is the moral of the story don't buy cars in Singapore?"

UPDATE (December 2016):
Someone was telling me how it is really tough to make ends meet in Singapore. He was rattling off what sounded like a well rehearsed list but when he said "petrol prices went up", I went:

"You are having trouble making ends meet and you have a car?"

I guess I might have sounded a bit rude. It wasn't by intention. Really. He gave me a dirty look... Anyway...
-----------------------
In recent months, I felt an air of caution and some might even say pessimism in the economy. 

Maybe, it is just me but my observations tell me that maybe the economy is not humming along so nicely.

Are hard times around the corner?

What can we learn from this recent ad to sell a BMW car?

Being financially prudent will help us to become more secure financially. Then, we wouldn't have to fear hard times (as much). 

Although we would not wish for it to happen, hard times could descend upon us quite suddenly. When it does happen, we want it to be good for us.

Be prudent with our expenses and, very importantly, don't fund our consumption with debt.

“When you combine ignorance and leverage, you get some pretty interesting results.” Warren Buffett.

Related posts:
1. Come out on top of a recession (Part 1)
2. Come out on top of a recession (Part 2)
3. A car loan is different from a home loan.
4. From rich to broke?
5. Wage slaves should be fearful.
6. The evil instalment schemes and their minions.

A car loan is different from a home loan (updated in June 2018).

Gone are the days when someone could walk into a car showroom, put down a $1 deposit and borrow the rest.




How many car buyers actually give the topic of car loan some serious, in-depth thought before signing on that dotted line? 

Most don't think much more than "How much is the interest rate?" and "How long can I borrow for?"

Unlike a home loan which is amortising in nature which means that the interest payment for each subsequent instalment is based on a reducing loan amount, a car loan's interest payment for the entire duration of the loan is based on the initial loan amount. 

A car loan isn't amortising in nature.






So, if a person were to buy a $100,000 car and if he were to take a loan for $50,000 at an interest rate of 2.5% per annum for a period of 5 years, he would be paying $1,250 x 5 = $6,250 in interest or $104.16 per month. 

Total monthly repayment: $937.49.

Now, if a car loan were to be amortising in nature, just like a housing loan, the total interest paid over a 5 year period would only be $3,242.20. 

Total monthly repayment: $887.37. 

This is more than 5% lower than $937.49!

Imagine the good old days when someone could have walked into a car showroom, paid $1 and borrowed the rest for a $100,000 car to be paid over a duration of 10 years.  

How much would the interest payment be assuming a rate of 2.5% per annum? 

$24,750! 

Monthly repayment: $1,031.25! 

How could this not be wealth destructive?





This is why, for years, I keep telling friends and family that if we want to buy a car and if we cannot afford to pay for the car without a loan, try to keep the loan quantum to a maximum of $20,000 and a repayment period of 3 years. 

Assuming the cost of debt is 2.5%, this would mean paying a total of $1,500 in interest payment which is what I personally find acceptable. 

Total monthly repayment over the next 3 years: $597.22.






So, if, for some reason, you are looking to buy a car now or sometime in the future, you might want to keep this in mind. 

Know how expensive a car loan actually is and try to limit its use to the absolute minimum.




Related posts:
1. Car dealers unhappy with LTA.
2. Lease cars, don't buy. (more calculations)
3. Cooling measures for cars.
4. Cooling measures for cars spurned.
5. A new car for $75,000? (depressing!)

Buying a car? Chances are it will be European.

Click to enlarge.
Source: LTA.

I still remember a time when Toyota was consistently the number one brand in Singapore in terms of sales figures. Imagine it is number three now! It is also the sole Japanese make in the top 5 sellers in Singapore.

Is there really so much wealth in Singapore?

Or is most of it an illusion?

Mind boggling.

See full list at LTA: here.

Related post:
Car dealers unhappy with LTA.

Car dealers unhappy with Land Transport Authority.

I read a commentary in The Business Times yesterday and found it amusing for various reasons.

It was a piece on how car dealers are unhappy with the Land Transport Authority (LTA) for what have been perceived as piecemeal announcements.

Honestly, I think they are more unhappy with the fact that the business environment has become very difficult for them, forcing many smaller dealerships to close in recent times.

For those of us who drive, we know that road traffic conditions have worsened remarkably and this is partially due to a motor vehicle population that has burgeoned in recent years.

More people also "seemed" to be "prosperous" as their demand for cars pushed Certificate of Entitlement (COE) prices through the roof just a few months ago.

The operative word here is "seemed" and not "prosperous". Why?

When "cooling measures" were introduced last year, demand fell dramatically. It shows quite obviously that many people were only able to afford cars here in Singapore when they had access to much bigger loans and 100% LTV (loan to value) was also available.

One complaint a car dealer had was about the categorising of cars not just by engine capacity but also by engine output. This caused brands like BMW to be completely pushed out of Category A which is where mass market cars compete for COEs.

Is this a bad thing?

Well, bad for the rich or those who want to appear rich. For most of us average folks, I think it is a good thing. Actually, for the rich, it might not even have mattered.

Imagine a middle income family buying a 1.5 litre Japanese make mass market car competing for a COE with a millionaire who was buying an entry level BMW for his son's 18th birthday. Something feels wrong here. What is it? I wonder.

So, the categorisation criteria are better now. I am not saying that the system is now perfect, of course, but I feel that it is better. More equitable, won't you agree?

Related posts:
1. First time car buyer? Get a Mercedes Benz.
2. Cooling measures for cars: Buying pre-owned.
3. Cooling measures for cars spurned.
4. Cooling measures for cars.
5. If we are not rich, don't act rich.

How much do cheaper mass market cars really cost?

People always say how expensive it is to buy a car in Singapore. Fewer people talk about how expensive it is to maintain a car in Singapore.

With Category A COEs being protected from luxury makes very soon, some of us who are looking to buy smaller mass market cars are probably feeling a bit happier.

Cars with engine power output exceeding 97kW will be classified under Category B in COE bidding exercises starting February 2014.

The new categorisation criteria comes as LTA seeks to better delineate mass market cars from premium cars.

Imagine rich folks buying cars like BMW 116, Mercedes Benz C180 and even the Lotus Elise competing for Category A COEs with people buying a Mazda 2 like me! It just isn't fair! Well, it will soon become a thing of the past. Read article: here.

However, if you are thinking of buying a car, whether it is a need or a want, be prepared to spend a fair bit of money to keep your car running in good condition.

I just sent my car for servicing recently and this was how much it cost me:

To be fair, it was a major service as the half yearly maintenance bill usually hovers around the $300 mark.

For a 1.5 or 1.6 litre Japanese make, a $15k to $20k a year burn rate is about right, including depreciation (although some might argue that this is a non-cash item). Is it money well spent?

Read these?
1. Buy a Mercedes Benz.
2. Lease a car, don't buy.

First-time car buyer? Get a Mercedes Benz!

I was reading the weekend edition of The Business Times and the front page story was headlined "First-time car buyers disappearing fast".

When I read that, I thought I could guess what the article was about. It would probably go along the line of how the "cooling measures" are working because 100% LTV is a thing of the past, I thought. Well, I was right but only partially.

Although the report said that most first time car buyers are young working adults and that most of them are unable to come up with the required 40% or 50% down payment, something very interesting was also reported.

While most first-time car buyers of entry level cars (which I understand from the article are those priced at around $120,000 each) have been priced out of the market, Mercedes Benz is still doing a roaring trade with first-time car buyers!

The A-Class

"We are seeing more kids bringing their parents to the showroom to book a CLA-Class or A-Class," said a senior executive at Mercedes Benz. Their A200 is priced at $156,000. "... it also looks like more parents are buying a Mercedes for their children."

The CLA at $179,888. Ouch.

Well, I suppose the cooling measures are not targeted at the rich. Rich people can well afford the luxuries in life and cars are definitely a luxury in Singapore. 

Even so, to have a brand new Mercedes Benz as a first car for a young adult given all of today's restrictions is ... er ...

Could someone help me with an adjective here?

The cooling measures have definitely worked to prevent the less rich to be more prudent because, in the past, it was possible to borrow 100% of the car's asking price with a loan repayment period of 10 years. 

A young person could then drive out of a car showroom in a brand new car paying as little as $500. He would probably have been wearing a big smile on his face and thinking to himself, "Wah! So affordable!"

Who says money cannot buy happiness?
(But buy already still have money or not?)

Related posts:
1. They were just showing off their wealth.
2. Polish your own car and save money.
3. Tea with AK71: Bought a new car.
4. Mature and sophisticated consumers lease cars, not buy.

Xiaxue just got a free car (for a year)!

When I saw the blog post, I exclaimed, "Xiaxue got a free car!" and immediately turned a shade of green. Which car is it? A beautiful white colour Nissan Sylphy, no less.

Reading on, I found out that, actually, she gets to use 3 different rental cars for a whole year for free. Well, that is still a fantastic sponsorship given the high cost of car ownership in Singapore.

I am very happy for Xiaxue but reading this just when I published my last blog post on why the mature and sophisticated lease their cars is just an amazing coincidence.

Xiaxue said:

"Many of us, especially those with young children, hope to drive but it is simply too expensive to own a car in Singapore nowadays. The value of a car will always depreciate too.

 "The smarter option is to simply rent a car!

"My Sylphy is available for rent at Downtown Car Rentals for a day at only $135 - it is very reasonable!

"Drive it around to run errands, do groceries or bring the kiddos out for a picnic. You don't have to worry about insurance or road tax or even servicing the car, it's all inclusive!"

Source: http://xiaxue.blogspot.sg/

I mean, of course, she has to say this but I cannot imagine renting a car for $135 a day as being anywhere near being reasonable. If we were to rent a car for 2 days a week (to run errands and do groceries), that would set us back by at least $1,080.00 a month! Yikes! What is the size of our grocery bill in a month, I wonder?

Anyway, like I said, I am happy for Xiaxue but anyone who believes that anyone should consider renting a car regularly to run errands and to do groceries is probably bonkers.

OK, there, I have done it. There is not a chance in the world that I would get a rental car for free from any sponsor now. Sob.

Related post:
Mature and sophisticated consumers lease cars, not buy.

Mature and sophisticated consumers lease cars, not buy.

From time to time, I would blog about car ownership in Singapore. Without realising it, I have blogged about "cooling measures" for cars at least three times in the last few months.

Now, with the maximum 60% loan allowed for buying cars, some distributors are offering customers the option to lease instead if they find it hard to cough up the initial 40% in cash.

For a Kia Cerato Forte K3 1.6 litre, there is an option to lease for 3 years at about $1,800 a month or for 7 years at about $1,600 a month. Customers don't have to worry about road tax, insurance and maintenance at all. They only have to buy petrol, pay for parking, ERP and the infrequent car wash, I suppose. Sounds attractive, doesn't it?

As usual, the devil is in the details. So, let us look at some numbers:

A new Kia Cerato Forte K3 now sells for $115,990.

If we were to make a 40% down-payment and take a 5 year loan with a 1.88% interest rate for the balance, we would have to make a monthly repayment of $1,268. The car would also be an asset and no longer a liability after the first 5 years.

Click to enlarge.

Cost of car over a 10 year period: $122,479. This might be simplistic and inaccurate but let us assume that the cost of the car in the first 7 years is proportionally at $85,735.

The road tax for this 1.6 litre car is S$738.00 a year while insurance would vary but let us assume that it is $1,500 a year. Maintenance? Based on my car ownership experience, I would put it at $800.00 a year which is realistic if smoothed out over 7 years. So, everything in, we are looking at around $3,100 a year. Over 7 years, it is about $21,700.

Now, if we were to lease the car for 7 years, the bill would total $134,400.

If we were to buy the car instead, in the first 7 years, the "bill" would be: $85,735 + $21,700 = $107,435.

There is a big difference of $26,965 or a $3,852 a year or $321.00 a month!

Now, if we were to drive the car for another 3 years, at the end of the 10th year, we would get back a percentage of its OMV. In this case, we might get back around $9,000 from the LTA. Of course, we would have lost another $36,744 (i.e. $122,479 - $85,735) by then. We would also have incurred another $9,300 in costs (i.e. $3,100 x 3).

However, being able to get back about $9,000 at the end of the 10th year means that we would only lose in each of those 3 years $1,028 a month or some $279.00 lesser than the first 7 years of the car's life.

So, unless there is a good reason not to, it makes sense to buy and to drive the car for the full 10 years or would we rather lease the car for 7 years, give it back and lease another one for another 7 years, losing $1,600 a month all the time?

The "cooling measures" are to protect people who are in financially weaker positions and, in this case, for people who cannot afford the down-payment of $46,396. However, the option to lease offered by car distributors has effectively circumvented the new rules.

Are more curbs from the government needed?

If a job is worth doing, it is worth doing well. So, to further encourage financial prudence, there should be clearer guidelines as to who are poor candidates for such options to lease. Car dealers should then be penalised for flouting these guidelines.

Opel's Mr. David Pang said that, with their option to lease, they are targeting "mature and sophisticated buyers. Those who have travelled and lived overseas can identify with the merits of leasing as opposed to buying."

AK71 has not travelled and lived overseas. He is not a mature and sophisticated buyer. So, you might want to disregard this blog post. I am going back to my well.

UPDATE:
http://singaporeanstocksinvestor.blogspot.sg/2016/05/what-new-mas-rules-for-car-loans-mean.html

Related posts:
1. Cooling measures for cars.
2. Cooling measures for cars spurned.
3. Cooling measures for cars: Buying pre-owned.

Tea with AK71: Car is SO big again!

Again.

One day, someone might do something more drastic than just taking photos like I did.

Related post:
Wah! Your car is SO big!

Has it become too expensive to keep that car?

If you are a car owner, you must have felt at some point that it is rather expensive to keep a car, especially if you are a regular guy like I am.

Is there some way to avoid the high cost of keeping your car? Oh, why not try destroying it? What?



This is pure madness. I don't understand.

Tax paid with Citibank Dividend Card.

It is a once a year affair. Got to pay Road Tax for my car:

I paid at an AXS machine this evening and was pleasantly surprised to find that I had a choice of paying with a DBS or a Citibank credit card too.

So, I paid with my Citibank Dividend Card and I guess tonight's dinner at the food court was free! That makes me happy!

I used to NETS it using my POSB ATM card. Things have changed for the better.

Tea with AK71: Wah! Your car is SO big!

Some people drive big cars:

So big that a single parking lot is not enough.

The inconsiderate, selfish and idiotic people like this driver are why the world is in such a mess!

KNS!

They were just showing off their wealth!

I was out the whole Sunday. I left home at 9am to meet a friend for breakfast. Then, I went to the gym before meeting another friend for lunch. After that, I went shopping before taking a break at UOB, reading all the periodicals I bought the night before.

In the evening, I went to Vivo City where I had dinner at the food court before doing a bit more shopping. I hardly do any shopping usually but I was looking for some things. Well, I found the stuff I was looking for in MUJI and Franc Franc. Yup, they were household items.

It is good to spend a whole day outside once in a while because I spend too much time cooped up at home. My Taiwanese friends call me a 宅男 which is not a compliment as I discovered. Anyway, being me, I couldn't help observing people and overhearing the kind of things they said.

While walking past the front of Hilton Hotel, a youngish couple drove into the driveway and parked their car alongside the Jaguars, Mercedes Benzs and BMWs. They were driving a bright red Ferrari with three exhaust pipes. Very impressive looking.

A little boy and his dad saw this too and as they walked past me, I heard the boy saying something about the car being nice. The dad told the boy, "They are just showing off."

Although I think that a Ferrari is not a very practical car for Singapore's roads, there are people who have lots of money and which car they drive is a matter of personal choice. I don't think it was appropriate for the dad to say what he said to the boy. In fact, it sounded a bit sour to me.

Perhaps, he could have responded by saying that it was indeed a nice car but it wasn't very practical to have cars like that in Singapore. He could go on to explain why. 

Would not such a response be more educational?

Related post:
Change to become richer: need or want?

Polish your own car and save money.

For those of us who drive, it is quite common to see those kiosks in car parks which offer to wash and polish our cars for $40 or so. Then, if we become "members", we get a member price ($28?) and this would involve signing up for a "package" which requires us to pay in advance for a few sessions.

I have always wanted to try these and approached one kiosk a couple of weeks ago. The old uncle manning the kiosk put me off with his attitude. Business was very good, I guess.

Anyway, after almost 3 years, the bonnet of my red colour car was looking washed out. Seriously, it puzzles me why the bonnet was the only part of the car that looked like it was dying. The rest of the car, after a good wash, would still look pretty good.

Yesterday, when I went shopping with my sister, I decided to buy a bottle of car polish. I didn't want those heavy wax type which I have used before for my previous cars. Those really worked up a sweat. I saw on TV that they have those spray on ones. Spray, spread and buff. Looks easy. Cost: S$12.00 only.

I went home, washed the bonnet and proceeded to spray, spread and buff. Since it was the first polish in almost 3 years, I did it twice over and when I was done, I was perspiring. Good work out!

The car looks better now although not showroom condition.

I am sure I still have plenty of polish left in the bottle. Should last a few more years.

So, if you are thinking of giving your car a polish, maybe you could try doing it yourself this weekend. Save money and get a good workout at the same time.

Used car dealers in Singapore: Any recommendations?

I have a very good friend who is thinking of buying a used car. For some reason, he thinks that I would know something about buying used cars. I think it is because I am such a frugal person.

Unfortunately, when it comes to cars, my preference has always been to buy new. I know. I am terrible in this department.

Anyway, this is a call for help. Please share any recommendations or warnings which you might have about used car dealers here in Singapore.

I guess this could also be a resource for readers who might be looking to buy a used car in the near future too. So, although it has nothing to do with investments and with being financially prudent, here goes my cry: HELP!