Tag: tips

  • Buy a Proton Saga with cash: Wise or not?

    2008 Proton Saga
    We received an email from Tracy who decided to buy a Proton saga but in dilemma either to pay it with cash or go for a short term loan. Here is her message to us.

    “Dear Angelina, I read two articles in Malaysiaminilover, one is regarding tips to buy a Proton Saga and another one is smart or stupid to buy car with cash in Malaysia. Both articles help me a lot but I am still in dilemma. I am about to buy a used Proton Saga with the price tag RM25,000. I enquire several banks and the best loan interest rates I can get is 3.8%. Can you please give me an advice is it wise to buy it with cash or loan it for a year?”

    In order to give you a better explanation, let us back up a little bit. Generally, there are only three situations: The loan rates are equal with the ROI (Return On Investment) rates on the cash you have, or the loan rates are higher than the ROI rates, or the ROI rates is higher than loan rates. The ROI rates here means the percentage of what you will earn if you put this money in either bank, stock market, or some other investment funds. Here we made several calculations to show the exact figure by estimating the car value will depreciates to RM22,000 after a year.

    If you pay the car with cash

    • Cash paid for car: RM25,000
    • Cost for car loan: RM0
    • Earning lost on cash: RM0
    • Monthly car payment: RM0
    • Cash on hand after a year: RM22,000

    If loan rates = ROI rates

    • Cash paid for car: RM0
    • Cost for car loan: RM25,000 * 4% * 1 year = RM1,000
    • Earning on cash: RM25,000 * 4% * 1 year = RM1,000
    • Monthly car payment: RM2166
    • Cash on hand after a year: RM22,000

    When both of the rates are equal, does it sounds like you are borrowing your own money through the bank? It is not recommended to take a loan in this case because the process to obtain a loan involves many other costs like processing fees, document fees, and stamp duty cost.

    If loan rates > ROI rates

    • Cash paid for car: RM0
    • Cost for car loan: RM25,000 * 4.5% * 1 year = RM1,125
    • Earning on cash: RM25,000 * 4% * 1 year = RM1,000
    • Monthly car payment: RM2177
    • Cash on hand after a year: RM22,000 + RM1,000 – RM1,125 = RM21,875

    If what you going to spend is more than what you can earn, it is not a wise decision too.

    If loan rates < ROI rates

    • Cash paid for car: RM0
    • Cost for car loan: RM25,000 * 3.8% * 1 year = RM950
    • Earning on cash: RM25,000 * 4% * 1 year = RM1,000
    • Monthly car payment: RM2162.50
    • Cash on hand after a year: RM22,000 + RM1,000 – RM950 = RM22,050

    Is it really worth to go through all the hassle processes and just save an extra RM50 in a year? The answer is no. However, if there is a higher return rate above 6% it may worth to consider. 6% ROI on RM25,000 is RM1,500 and the earning will be RM500 a year in this case.

    Think whether the cash will be needed in near future. If the cash is just small part of what you have, buying a car with cash will be wiser.

  • Cars under RM5000 dollars you might consider

    The biggest advantage of buying cars under RM5000 dollars is that the maximum depreciation will not over RM5000. This is because the car can be sold as scrapped metal for at least RM500 dollars at the end of the day. Buying a reliable budget car is good but buying a bad and unreliable budget car will bring many hassles and extra money will be wasted to repair the car. Therefore, choose properly before decision is made.

    Toyota Corolla KE70 (up to 1990s)

    Toyota Corolla KE70

    It is always good to give a try either it is GL or DX since it is Toyota Corolla KE70. The KE70 is well-known for its tough body. It is like the ‘80s Hummer. It is also the reason why many drift enthusiasts purchase the car and turn it into a scary drift machine. An original KE70 may with the price tag as cheap RM1000 dollar. Often there are ex-drifters who would like to let go their KE70 with 4AGE engine below RM5000. If the condition is good, it is a great car to use daily.

    Toyota Corolla LE

    Toyota Corolla LE

    The Corolla LE is another option for Toyota fans that do not prefer the “square square” KE70. Most of the LE priced below RM5000 is in between 1983 and 1989 in the market. The biggest advantage of buying this car is nothing to worry about the parts as it is available at most of the spare parts shop.

    Proton Iswara

    Proton Iswara

    We highly recommended the Proton Iswara especially newer model. It will be a good option for those who need a reliable local made car to go for work or daily drive. With the budget below RM5000, a good used Iswara in between 1995 and 2003 is ideal. Why we say ideal because a 2003 Proton Iswara is less than ten year-old which will be good.

    Proton Saga

    Proton Saga

    If the preference is local made car other than Iswara, it will be Proton Saga. There are tons of Proton Saga for sale from RM1000 to RM5000. From RM1000 to RM3000, you can get model year in between 1985 and 1990. From RM3000 and RM5000, you can get model year in between 1990 and 1994. Although the budget is low, you should consider buying the newer model, see the reason why here: Buy a Proton Saga.

    Proton Tiara

    Proton Tiara

    Proton Tiara did not live in the planet for long. The production only last for four years from 1996 to 2000 and continues with Proton Savvy. Any model year is selling under RM5000. One thing good to choose this car is the body is not too old compared to other ‘80s model. The 1.1L engine is another consideration for low fuel consumption is low. Because it is Proton, spare parts are still available across the country.

    Perodua Kancil

    Perodua Kancil

    Perodua Kancil will be a good option for those who did not travel long distance. We have tested to run the car for about 50 km a day in a month, it works well. However, it is not recommended for those who need a car to travel out station. The newest model you can get below RM5000 is up to year 2003 as of 2012.

    Honda Accord (From year 1990)

    1993 Honda Accord

    This car is good for buyer who needs a spacious and cheap car. It is not recommended to go for model year earlier than 1990 because most of them are rusty. Some earlier models may have a hole at the floorboard, check properly the floorboard by removing the carpet. For more details see what to check when buying used cars. Try to look for newer model like 1994 because the fuel system is using fuel injection rather than the old carburetor type. Fuel consumption for injection system is much better than carburetor system.

    Honda Civic

    1991 Honda Civic

    We know that the Honda Civic is many teenager’s dream car due to its outlook and performance especially the RM128,000 eight generation Honda Civic. Need no sad if the price is sky high. A good alternative is to go for the fourth generation Civic in between 1988 and 1991. It looks well and performs as a good transport for a person who needs a car within budget.

    Nissan Sentra (up to year 1995)

    Nissan Bluebird

    The Nissan Sentra SLX or N13 is a reliable four-door sedan with low fuel consumption. The body is tough therefore you can still find some used cars with least rust on the body. An alternative to the Nissan family is the Nissan Sunny, Nissan Bluebird, or Nissan Datsun 120Y, both of them are in between RM1000 to RM3000. However, Nissan Datsun 120Y is not really recommended because 99 out of 100 are full of rust.

    Daihatsu Charade

    Daihatsu Charade

    The strength of the car body is what makes the Charade goes into the list here. The Charade is a four-door car, with 1000cc engine, and available in manual and automatic transmission. These are good for small family use, save petrol, fun to drive, cheap road tax, and cheap car insurance. Try to look for model after the 1990.

    Cars under RM5000 dollars that are not recommended

    Ford Laser, Mitsubishi Lancer, Mitsubishi Galant, Mazda 626, Citroen ZX (before 1999), Volvo 240GL, Toyota Corolla KE10, KE20, KE25, KE30, KE35 and some other old cars like BMW, Peugeot, Jaguar, or cars you cannot even name it when you see it are NOT recommended except you are a mechanic or you have budget to restore it. It will be very costy to repair these import vehicles if there is some parts wear out. This is because import spare parts are limited especially for cars over 20 years.

    Extra attention should be paid to the car body chassis when buying cheap cars below RM5000 dollars. Most of the body parts can be replaced but not the chassis or mainframe. Avoid rusty car or car with too much of filler. In a nutshell, it is always recommended to choose newer model within the price range.

  • Car buying tips: Buy a Proton Saga

    This is a very good and useful car buying tips written by one of Malaysiaminilover’s editor about buying a Proton Saga. When a person plans to buy either a new car or a used car, many factors have to put into consideration. This article has almost all the factors you need to consider either buying a new car or used car. Hope it helps our readers here. The article starts here. (more…)

  • Driving Safety Tips: Three things not to overlook

    Often there are many things you shouldn’t do while driving such as texting while driving. There are also things you should pay extra attention and superfluous awareness while driving including the top 10 driving safety tips you should know. Here we sorted out three driving safety tips that you may or may not think about it before. (more…)

  • Used car buying tips: Choosing the model year of a used car

    Here is a very useful used car buying tips for anyone who is in the middle of buying a used car or plan to buy your next car. Often there are many questions to ask when buying a used car, and one of the most important questions is, which year of the car should I buy? Let’s say you have already have in mind to purchase a used Toyota Prius, but which year is the best suitable for you? Here are some of the calculations that could solve the dilemma (We use a Toyota Prius as an example, it could be any car). (more…)