The Thailand expat forum for Travel, Lifestyle and Fun.

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?

__________________


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

Khun Custard

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.

Smeg

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.

madjbs

^ 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.

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.

ChiangMai noon

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?

__________________
I often feel that the whole forum is close to bursting with homoerotic frisson.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

Fabian

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.

Smeg

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?

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. 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.

Smeg

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

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.

ChiangMai noon

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.

Smeg

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

Fabian

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.

Smeg

^ Fair enough, but the OP did start this thread by saying Hence I was giving my thoughts on how to count it accurately.

madjbs

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

Yeeees well done


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.

Smeg

Millions upon millions of people the world over think that getting a few guaranteed percent interest is a good use of their money, and the housing loan industry is based on it, so I don't see your point.

Anyway, we are talking about the OP, not most people. The OP was obviously able to lock up 800,000 baht in a car for three years, and probably could have invested it. Let's ask him rather than dismiss it based on a strange generalisation.

There is no point analysing the finer points of opportunity cost accounting. I can't be arsed, I had enough of doing that when studying this years ago

Here is the easy version Opportunity cost - Wikipedia, the free encyclopedia

madjbs

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.

Thormaturge

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.

Fabian

Or there come another financial crisis and the 800,000 invested may be just 400,000 worth. Meanwhile th