Thread: Cost of Car Ownership in Thailand

Looking at new cars has forced me to count the cost of owning a vehicle here in Thailand. I bought my Honda Civic in 2005 (Checked the date for those who have come from t'other thread) for around 800.000 baht. Offered around 500.000 for it as a trade in which works out to 8000 per month...

If you add to that insurance and maintenance over the time would bring the price up to around 10000 per month...

For the convenience it offers I consider it a worthwhile expense...

others thoughts?

The joy of a new drive is very short lived once someone scrapes the paint work or you try to sell it.

I've (well, for the past 20 years) always baught semi prestige cars that are 2- 5 years old with low km's and dealer log books. Why:
1) Let some one else pay the price for the priveldge of driving it out of the show room and paying the government all the tax and stamp duty.
2) Less likely to have been flogged to death by the previous owner?
3) If it's a lemon it will have already shown the telltale signs
4) Your not as conspicious in the office car park - always be aware of the boss who is shorter, balder, fatter and drives a car that older and of less "prestige" - it is usually the M3 Bimmer that will cause you the most grief first!!
5) Usually a far better ,faster, safer set of wheels
6) And when it's time to sell you theoretically should loose less??

The Saab Vigens (notorious for rapid depreciation) and to a lesser extent 3 series I've had on this approach have worked well for me.

Originally Posted by klongmaster

Looking at new cars has forced me to count the cost of owning a vehicle here in Thailand. I bought my Honda Civic in 2005 (Checked the date for those who have come from t'other thread) for around 800.000 baht. Offered around 500.000 for it as a trade in which works out to 8000 per month...

If you add to that insurance and maintenance over the time would bring the price up to around 10000 per month...

For the convenience it offers I consider it a worthwhile expense...

others thoughts?

As well as the 8000 depreciation, you also have to factor in the opportunity cost.

That 800,000 could have been earning 0.5% interest per month or more if invested overseas instead of being tied up in a car. So that is 4000 baht per month of lost income, which is the equivalent of expense, and you are up to 14,000 per month without even fueling the thing.

^ Unlikely that leaving the money in a bond or high interest saving account would be a viable alternative as a lot of people don't have 800,000 to throw around.

^ So whose money did he use to buy it if it wasn't his money? If he has money to tie up in a car, he has money to tie up in a bond if he doesn't buy the car!

If he borrowed the money he'd have paid interest (I don't think Honda offer interest-free, and if they do its not really free, its simply built into the price of the car) he'd have paid interest on that, but he didn't mention loan interest in his list of costs.

I don't have a car because I only actually need one maybe 6 days or so a year which costs me less than 10,000 in rental, but doesn't everything have an opportunity cost, he says he needs the car for whatever reason, isn't that what money is for, to buy what you need?

Smeg, buying a car is not an issue of reason.

And no, CMN, money is not only for to buy the things you need but also to buy the things to make your life more comfortable.

Originally Posted by Fabian

Smeg, buying a car is not an issue of reason.

I don't understand. You mean people buy cars without a reason, or they don't think about whether they can afford it or would rather buy something else?

Originally Posted by Smeg

^ So whose money did he use to buy it if it wasn't his money? If he has money to tie up in a car, he has money to tie up in a bond if he doesn't buy the car!

If he borrowed the money he'd have paid interest (I don't think Honda offer interest-free, and if they do its not really free, its simply built into the price of the car) he'd have paid interest on that, but he didn't mention loan interest in his list of costs.

Because he may have 800,000 locked up in a bond or saving account is dead money and not an option for people low on funds. Most people would perhaps have to make a decision between purchasing a new car or renovating your office for example.

It's all relative anyway because people don't buy a car for the investment in their cash value.

Originally Posted by madjbs

Because he may have 800,000 locked up in a bond or saving account is dead money and not an option for people low on funds.

Huh? It is more "dead" locked up in a depreciating car than earning interest. However, he uses the car to make money, so its a more complex business model than that alone.

It's all about choices and opportunity cost

TANSTAAFL - Wikipedia, the free encyclopedia
Greg Mankiw described the concept as: "To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another

Which means to get the car, you have to give up the interest income. Both are nice, and its down to a choice of one or the other.

Originally Posted by Fabian

And no, CMN, money is not only for to buy the things you need but also to buy the things to make your life more comfortable.

that's what I meant.

I neither want nor need a car, nor do i have enough money to care, so I'll butt out now and let smeg give us a GCSE level introduction to economics.

I was surprised that the OP missed out Op Cost, that's all, ya sarky git.

Smeg, what I was trying to say: Buying a car may not be the est solution economically in many cases but people just buy one anyway just because they want to and they can effort to.

^ Fair enough, but the OP did start this thread by saying

Looking at new cars has forced me to count the cost of owning a vehicle here in Thailand

Hence I was giving my thoughts on how to count it accurately.

Originally Posted by Smeg

Huh? It is more "dead" locked up in a depreciating car than earning interest.

Yes earning a tiny amount of interest is a great way to use 800,000 baht isn't it...

However, he uses the car to make money, so its a more complex business model than that alone.

Yeeees well done

Originally Posted by Smeg

TANSTAAFL - Wikipedia, the free encyclopedia
Greg Mankiw described the concept as: "To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another

Which means to get the car, you have to give up the interest income. Both are nice, and its down to a choice of one or the other.

Opportunity cost is generally the price of the next best ALTERNATIVE, and putting the money into a account is generally not an alternative for most people, therefore it is not necessary to consider the interest as opportunity cost.

Indeed a few % guaranteed is good, but still useless when talking about amounts as low as 800,000 baht.

Not really relevant to the OP however.

In LOS ThB 800,000 will buy you a house that would appreciate by a further ThB 400,000 or more over the following decade.

Or you could buy a car and have nothing at the end of ten years.

Up to you.

Or there come another financial crisis and the 800,000 invested may be just 400,000 worth. Meanwhile the OP invests money in a car to drive potential customers around so he should yield more than just a few percent.

Smeg: thanks for your input...what I was more interested in was whether you think owning a car is better than using public transport, not the intricacies of financial management...however, you'll be grateful for me providing you with the platform to show everyone here at TD just how clever you are...

for the rest of the TD family...interesting thoughts...

I have a good mate - who is a member here - who is better heeled than me but has never bought a car, preferring to use taxis as his main means of transport...viable in Bangkok but I'm not sure about those who live in the back-o-beyond...

CMN for example could not live where he does without some form of independent transport and his preferred method is motor bike...

if you have children and you live off the beaten track then wheels are a must!
No way will I allow my kids on a motorcycle so a car is my only option.
I went for a 3 yr old pickup as it has good resale value as well as longevity.

^ Too right. We need a car occassionally. Got an old reliable banger that works fine, is easy to fix and cheap to run. I've been offered what I payed fpr it a couple of times but don't want to sell. I certainly don't need a prestige vehicle 'cos the wife would break it. When she breaks this one it's no big deal.

The running costs of any vehicle will be a constant drain on your finances. Does not matter whether you drive every day or once a month. It will drain your cash regardless. You cannot run away from it.

I would only buy a pickup here in Thailand, cheap to buy, low depn, very low running and fixed costs.
Its only used for a run to the shops, taking kids to school so spending up on a sedan is pissing money away for me.

^ hear hear.