Hello everyone, recently cars have been cheap so many people intend to buy a car but I have witnessed many people who did not research carefully, did not understand the cost of maintaining a car, so after buying it, they couldn't afford to keep it and had to sell it at a loss of hundreds of millions. So should you buy a car? Who should buy it? How much money is needed to buy one?
First of all, before we proceed, I would like to note that this article is for those who have some money. If you have billions and earn hundreds of millions a month, then I apologize. Secondly, this article does not delve into the cost of maintaining a car, whether it is expensive or not. This article will focus on analyzing the Gains and Losses of owning a car.
To make it easier to calculate, I will use the amount of 500 million VND, which is the average amount that most people consider when thinking about buying a car, so analyzing with this amount will be more relevant to everyone.
Firstly, many of you who buy cars often forget one thing, that is the opportunity cost of 500 million VND. You think that buying a car only involves maintenance costs, repairs, parking fees, depreciation, but you forget that if you have 500 million VND and don't buy a car, if you deposit that money in the bank, you will definitely earn 5% interest per year, equivalent to 25 million VND. So you have to consider this, it's not a small amount at all.
Now, suppose you go buy a 500 million VND car, what do you get?
In fact, many of you will enjoy life more compared to riding a motorbike, especially in Vietnam where the weather is harsh, the air is full of dust, the environment is dirty and polluted, garbage appears in many places, the weather is unpredictable, slippery on rainy days, dusty on sunny days, young people drive recklessly like sine graphs, high school students walk like the road their parents built, your mother grows bananas so there is no shortage of green bananas at home. Therefore, having a car will make you safer if any student runs into you, safer if you hit a speed bump without losing control and plunging into a ditch, also safer when the sun is scorching, safer when it's thunderstorming, driving in the sun means you don't have to worry about dust, and driving in the rain means less slippery roads. Of course, you also don't have to inhale the scent of perfume from the rivers like To Lich or the garbage lying around the streets, and in the long run, you won't have to go to the hospital, won't have to treat lung or skin diseases, and even avoid depression from cursing when going out.
But benefits always come with drawbacks, it's not like we are better off than others, if we gain in one aspect, we have to sacrifice in another. So scammers say they want to help you get rich quickly and easily, but they don't really know you, what they want to help is the country, and if everyone in the country is rich, who will be poor? So don't believe anyone who says they want to help you get rich, except for your close friends, but in reality, even close friends deceive each other for every penny.
What do you lose when you buy a 500 million VND car?
First is the cost of maintaining the car. As you have read on many websites, if you drive 2000 km per month, it will cost around 5 - 6 million VND. If you have to park and wash the car, it will cost about 7 - 8 million VND, if you are not good at theory and don't understand the meaning of traffic signs, don't understand the rules of the road markings, then you will lose a few million VND in fines, so it's 9 - 10 million VND per month, and if you cause an accident, then goodbye to tens of millions of VND, and if you drive carefully and economically, you still need to prepare 4 - 5 million VND per month. So in a year, you will lose 40 - 50 million VND, which is not a small amount, right? If you buy an electric car, you can save more than 5 - 10 million VND, even more on fuel and maintenance costs.
Next is when you buy a car, the biggest loss is depreciation and depreciation. For example, if you buy a new car for 500 million VND, as soon as you step out of the showroom, you will lose about 30 - 50 million VND, after a year, you will lose 70 - 100 million VND depending on the type of car you buy and who you sell it to. If you buy popular brands like Toyota and are lucky enough to sell to another user, you will lose less, let's say only 70 million VND, but if you buy lesser-known brands and sell to mechanics, losing 100 million VND is normal.
For example, someone in my family bought a 700 million VND car, took out a loan to buy it, now unable to repay the debt, had to sell it, luckily got 550 million VND, which is good, so lost 150 million VND after 8 months. If you buy a used car, depreciation is less. If you buy a used car for 500 million VND, for example, a Camry, a year later you might only lose about 50 million VND, or even break even or make a profit if you find someone who likes it, but on the other hand, the risk of repair for a used car is very high, costs a lot of money, so now I see many people choosing to buy a used VinFast gasoline car, for example, a Lux A now costs around 500 million VND and the oldest model is from 2019, still with 5 years warranty. In general, it's better, but whether you buy a new or used car, you still have to consider that the depreciation cost is very high.
So summing it up, with a 500 million VND car, you need at least 5 million VND per month for maintenance, at least 60 million VND per year for depreciation with a new car, with a used car, the depreciation is probably less but repair costs are higher, so it's still 60 million VND. So, it's 5 million VND per month plus opportunity cost of 25 million VND in a year, which you could have earned if you had deposited 500 million VND in the bank, so 2 million VND per month, in total we have 12 million VND per month that will fly out of your pocket. With this 12 million VND, if you drive less, you can totally take a taxi, with 12 million VND, on average, if you calculate 15,000 VND per km for a taxi, you can travel 800 km per month, this distance is enough for you to go to work on rainy days, pick up your child from school on rainy days, all you need is to hire a taxi and you can comfortably drink alcohol without worrying about where to park or getting fined for alcohol concentration, and less risk of accidents, sometimes an accident can cost you the price of a whole car, not kidding.
For example, if you encounter a student rushing out and crashing into you, even if you are driving at the right speed, in the right lane, you may still have to pay hundreds of millions, it's not uncommon, so calculating, taking a taxi is better, especially because you still have the original 500 million VND in your bank account, or you can rent a car. If you drive less, for long trips, it's okay to rent a car, rent for a day costs 500,000 to 1 million VND, if you take one or two trips a month, it will cost about 5 - 7 million VND including fuel and tolls, so you can relax.
I see many people buy a car, leave it there for a whole month, only drive it a few times, buying it just because their neighbors have one, but end up not going anywhere, it's a combination of being poor and wanting to show off, while every day, hundreds of thousands of depreciation costs are flying away, especially those who don't have money but still want to buy a car on installments to show off, then they have to pay a bunch of interest, buying a car on installments of 400 million VND with 15% interest means losing 5 million VND per month, a day losing 165,000 VND even if the car is parked, plus depreciation of 150,000 VND, so you lose 300,000 VND every day, so it's really foolish to buy a car on installments and not drive it. Even buying a car for a service should be considered.
As calculated at the beginning of the article, buying a 500 million VND car for a service means losing 5 million VND for depreciation, 2 million VND for opportunity cost, totaling 7 million VND. So if you can't save at least 7 million VND per month after deducting fuel and maintenance costs, in reality, you need to save more than 7 million VND because service cars wear out quickly, depreciation is very high, not just 5 million VND as I calculated earlier, so if you can't save 10 million VND per month and after deducting fuel and maintenance costs, you actually only make 3 million VND. With 3 million VND, you could work as a laborer, with a salary of 7 million VND or more, so to run a taxi, you need to save at least 15 million VND per month to match a laborer's salary.
Many people say they can save 10 million VND after deducting fuel costs, it's better than being a laborer, but when they sell the car, they realize that even though they earn 10 million VND per month, the 500 million VND car sold for 400 million VND after a year means losing 100 million VND, so even if you earn 10 million VND per month, but the 500 million VND car sold for 400 million VND after a year means losing 100 million VND, so it's better to work as a laborer, maybe you have a car to drive your wife and children to work, go out, so you have to carefully consider whether driving your wife and children is worth the cost, whether it's worth the expense. Because if you buy without careful consideration, you will end up burdened with debt. How much you earn, you use it to pay off debts. If you want to live healthy and peaceful, reduce showing off, reduce extravagance, buy when you have extra money, buy practical needs, don't buy just to keep it and end up burdened with interest, it's best not to buy, if needed, take a taxi, for long trips, rent a car for convenience. In reality, I see many people buy a car for a while and then have to sell it, so I sincerely advise and share with you like this.