Most of the people who depend on public transport in their daily life may think about getting a car for their own. Anyone can purchase a cheap car with low maintenance cost, low monthly car payment, as well as low cost car insurance. However, does one really need an own car when the public transport is so convenience at such low cost? Here we did a calculation based on a case study in Thailand.
In Thailand, the taxi is 35 baht once you get on it, every km after the first km is charged 10 baht accordingly. Let’s say you are going to travel 10 km from home to work everyday, it will cost 125 baht one day, and return will be 250 baht. In a month, we roughly work 22 days, the total cost of using taxi to work will be 22 x 250 baht = 5500 baht a month.
So, what about getting one cheap new car for 508,500 baht? Now we do a calculation if you get a Honda Brio for work. Honda Brio gives 47 mpg, which is roughly 19.8 km per liter of petrol. A liter of petrol cost 34 baht and the cost to travel 20 km a day in a Honda Brio will be (34/19.8) * 20 = 34.34 baht a day. In 22 work days, it will be 686.8 baht. Other than the petrol, there is a monthly car installment of 9746.25 baht. The total cost for a month is now 10,433 baht. So, owning a car may anytime cost you double compared to using taxi for work.
The true cost to own the car in 5 years time
In long term, the calculation will be different compared to what we showed above. There is something else is excluded, the value of the car. If you spend 5500 baht a month for public transport to go for work, in 5 years it will be 330,000 baht. You get nothing because the money you paid goes for the service. Well, you have someone drive you to work.
On the other hand, if you bought a Honda Brio 5-year ago, now you can probably sell it for 300,000 baht. In 5-year time, you paid a total of 584,775 baht for the car price including car loan interest. The cost for petrol in 5 years is 686.8 * 60 = 41,208 baht. The total cost to use the car for work in 5 years without including the maintenance fee will be 625,983 – 300,000 = 325,983 baht.
Here is the conclusion of having an own car to go for work and using taxi to go for wok.
Using car to go for work
- Pros to own a car: Flexible in time, convenience, and can use the car on weekend for other purposes.
- Cons to own a car: Extra monthly car payment compared to taxi, having extra cost like car insurance, car park fee, car maintenance, and some intangible cost like car wash as well as anti-theft accessories.
- True cost to own the car over 5 years: 325,983 baht excluded car insurance and maintenance cost.
Using taxi to work
- Pros to use taxi: Just sit and relax in the car and need no tired to drive alone. Taxis are almost everywhere in the town.
- Cons to use car: Extra cost may occur during weekend when you are going to somewhere else.
- True cost to use taxi over 5 years: 330,000 baht excluded extra cost during other day.
From the comparison we made here, the cost to own a car and cost to use taxi to go for work is more or less the same. The only different is that owning a car will have higher cost for every month. It is up to individual and which way you prefer. What will be your choice?