Car : (Buy) or (Rent) or (Rent Buy)
In the 21st Century
(8) Car : (Buy) or (Rent) or (Rent Buy)
Previously..., (7) Protecting Ourself Knowing Affordability?
I would present the following tables for the calculation of 5 years installment and 9 years installment plan. You would wonder the 5 plan installment is the best that saves you a lot and so so on, given with 4 conditions, Case A (buy), Case B (buy longer period), Case C (rental), and Case D (rental and then buy).
Given the price of RM85000 1st hand car for finance interest 2.70%
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In both cases, for 5 years plan who sold the car out, while 9 years plan who sold the car out at year 5, both would loss about RM43,327.50 for 5 year plan and RM51,589.50 for a 9 years plan. Making a difference of RM8,262.00
So what is the function of this fixed assets if it depreciate yearly?
The function of this asset, is for you to make more money
a) to replace this fixed assets
b) to earn more money in terms of tax
c) to earn more money in terms of revenue
Being affordable, let's see an example, by only paying RM880.46 monthly, you have an extra of RM566.67 monthly for other investment, such as Fixed Deposits, Shares, Business investment, Part Time Job, or monthly installment of Land Properties (Gosh! monthly installment of house loan saves a lot, or even pay credit cards), or
a) Take degree or Master course to upgrade future monthly salary income
b) Create a business services line which require less stock or no stock.
c) Learning financial products in which Money generates Money.
Not forgetting, car comes along with expenses in maintenance fees and petrol.