Malaysia, should I buy a car, rent one or use e-hailing ?
Should I buy a car when settling down in Malaysia? This question often comes in Expat forums and groups. Everyone wondering if it’s possible to live your daily life with just public transport and e-hailing aps and avoid that large purchase at the start of your stay. Especially, as we know, buying a car to re-sell it a few years later, is never a good investment.
The haunting questions are about figuring out how to get or convert your foreign driving license, you also have to research and find the car! Then resell it timely when you leave.
I might be able to shed some light and data for you to take a decision?
I arrived in August 2020 in Malaysia, as part of my second stay in the country. I had a car on the first stay as I worked in the far suburbs industrial area, and at the time, the public system and e-hailing apps were not as developed. Buying a car was a no-brainer.
But today! Smack in the pandemic, where I was working from home. I was in no hurry to make that heavy purchase. And decided I would study the economic reality of living without.
- I can reach my office with public transport; the nearest station is less than 10min walk away from my home.
- I have one decent supermarket walking distance, although I mostly prefer to go to one which is about 4km away.
- As soon as restriction were lifted, and things got a little safer, I would go to see friends & dine out at least twice every week end.
- I would visit a mall once every two weeks. (Yeah, not really big on shopping) to even less. But I embraced Shopee with enthusiasm.
The general idea:
- Use public transport as much as possible to get to the office (RM4/return trip)
- E-hailing apps such as Grab for my grocery shopping runs ( Approx RM14/return trip)
- Rent a SoCar when I needed half day mall / lots of errant to run ( RM 50/80 per half day)
- I actually did a long week-end away, and used the long distance bus to get there ( Malaysian buses are so very comfortable and cheap ) or rent a car for the week end (RM 1,500 on average).
I am far from being a socialite; I also go to max 2 places on the week-end. Many of my friends would also pick me up / drop me off most times after a late meal.
What does a year of moderate Grab expense look like?
For a total of: RM 3,212.87
As you can see my expenses in November and December quite declined. We actually purchased a car in November. December is basically just the Grab to the airport to go home for Christmas (which is about RM100)
A good estimate would be about RM 350 per month if you don’t go to the office in grab every day. If you did go with grab during rush hour, then the bill would escalate very quickly!
What about SoCar expenses in a year?
Well in the end I used SoCar only twice because I had few friends with me to drive and many stops to go and spent in total RM150 for two half days. But let’s bear in mind that interstate travel was banned for most of 2021. So I really didn’t have a lot of opportunities. But if you are group, it’s definitely worth renting a SoCar.
So when does it make sense to buy a car ?
As I mentioned before, we did end up buying a car. This decision was based more for convenience, than financial factors. The choice of the car and its resell value was, however, very much decided based on this little year experiment.
Estimated cost of car ownership
We purchased a Perodua MyVi 2009 automatic, grey, plain and easy to resell at RM 17,000. From a local car dealer. We know its value is about RM 13,000 today ( the rest was commission of the seller, first year insurance and all other purchase related services ). And we are quite confident that we will be selling it for at least RM 10,000 when we leave.
So far maintenance has amounted to RM 2,255 (gear box change, a lamp light died and various standard maintenance). In general, maintenance cost of a local brand of car in Malaysia is very affordable.
Let’s look at the economics for now – car ownership per year:
|Gas week day||2600||RM 50 per week at the moment|
|Gas week-end gateway||900||RM 150 per week-end, about 6 big week-end away per year.|
|Toll||240||I am averaging RM20 per month|
|Parking||1300||I am averaging RM25 per week|
|Total / year||5040|
|Total / month||420|
I still go to my office with public transport. So above is purely outings, shopping. groceries and other appointments to the gym etc…
The economics side by side – if I was to stay in Malaysia for 2 years and resell the car after two years.
|Monthly cost (Gas/Parking/Toll)||-420||-400|
|Week-ends away car rental||0||-6,600 (6 week-ends x 1,100 RM)|
|2 year estimated cost||-10,080||-9,600|
|Purchase of the car||-17,000|
|2 years of car insurance||-1,230|
|Maintenance budget (estimated for a local brand)||-3,000|
|Income from selling the car||10,000|
In order to kind off breakeven, you would need to spend about RM615 per month combining Grab and SoCar ( then adding the weekends car rental). And again, it’s quite quickly achieved if you do round trip to your office on a rainy day.
For example: my office off-peak hours is RM15, on peak hours RM24 and when it rains. (well let’s forget having a grab within a reasonable time when it rains…) So at about RM50/day, and 21 days of work, that’s RM 819.
And what about renting a car long term?
It’s true that you can rent a car with a monthly contract from about RM 1,200 to RM1,400. And you probably would get a much nicer car and possibly imported too. It was not our preferred option, simply because we felt we would have paid back the car and prefer to have our own. Also because selling a car in Malaysia when it’s a very popular model is relatively easy. The more expensive the car, the harder it is to sell it.
Should I buy a car in Malaysia?
As you could guess my answer - it's not a definite yes. Everyone’s decision will be motivated by:
- Do I want to drive in Malaysia ? Can I drive with my current driving license ?
- What will my life look like ? Will I travel often to the office, or to customers ?
- Do I want to go through the hassle of buying and selling the car ?
- Will I drive a lot around Malaysia or just stay within my neighborhood ?
- Does my lifestyle /hobbies brings me away from e-hailing and public transport coverage?
Our personal choice has been to buy a car, even though our needs are quite small. The balance between purchasing and Grab ( RM 4,930 aka 1,070 euros) - if you decided on a second hand local, relatively old car – was worth the price of our freedom. We also anticipated that in 2022, as the restrictions and our friends were more and more keen to get out, the grab system would become too expensive. ( and we were right… )
The economics above may not be the same for all and the key difference will also be based on what kind of car you would like to purchase. From our first experience where we had a second hand Perodua Kelisa. We wanted a car that the local family could afford, so it would be easier and faster to resell. In our first stay our car was sold direct to a local family, advertising it on Mudah, within 1 week…
If it’s the purchasing & selling part that worries you, you can also opt for buying at Perodua Pre-owned vehicule at the Perodua POV showroom. These cars are barely used, controlled and certified by Perodua so you are sure it’s in good condition when you buy. Reselling is not as daunting as you might think, and a local dealer can help you with the process. Local dealers specialized in expats are also available but I have never used one.
Here, not exactly a clear answer but at least probably a clearer view of the cost of the various solutions. I hope this will help you take the right decision for you when you arrive. ( or maybe later like I did ).
Taxi : Photo by Kishor on Unsplash
Car: Photo by Courtney Corlew on Unsplash