Go beyond the monthly amortization. Here are the most-overlooked essentials that vehicle owners should know.
It’s easy to imagine owning a car as all joy rides and convenient transportation, but we also need to consider the monthly auto loan amortization and the other costs that come with ownership.
If you’re not careful enough, having a car could easily turn into a financial trap and the joy rides you planned could end up as fantasy. To avoid this, let’s have a look at this list of expenses you need to factor in before you decide to buy one:
- Registration costs
Your car needs to be registered with the Land Transportation Office (LTO) before you can take it out on the road. One of the requirements for vehicle registration is Compulsory Third-Party Liability (CTPL) cover, this insurance protects you against liability to third party in case of death or bodily injury should you be involved in an accident. Then there’s the compulsory smoke emission test your vehicle has to pass before you can register your vehicle.
The good news is, the initial registration covers the first three years if you’ve purchased the car brand-new. After this, you’ll need to register it annually to avoid penalty fees.
Before buying a car, best if you are also willing to set aside a certain amount off of your year-end bonus . The car registration cost starts at P1,600 for light passenger cars, plus P650 for CTPL insurance, and around P500 for the smoke emission test. - Insurance
No one wants to get into an accident, but it pays to be ready with a safety net. You can, therefore, choose to buy comprehensive car insurance on top of the mandatory CTPL. Doing so may save you from a lot of unexpected expenses later on.
There are plenty of options if you're looking for motor vehicle insurance in the Philippines. AXA Philippines, for example, offers car insurance to protect against third-party liabilities, own damage, loss due to theft and robbery, and natural calamities. You may also access AXA's 24/7 roadside assistance during an emergency. If you need to file a claim, you can do this conveniently online through the Emma by AXA app or through AXA's 24/7 Claims Assistance Hotline.
How much will it cost you? It depends on the type of car, but for a brand-new vehicle, expect to pay at least P20,000 for a comprehensive car insurance policy. - Fuel
Fuel prices have become more expensive these days so you can expect to spend a lot of time and money at the gas station. That's why consider the type of car you'll buy to stay on a tight budget. Aim for a fuel-efficient one instead of gas-guzzlers.
How you drive and how much load you carry in your car can also influence fuel consumption, so don’t be shy about asking for fuel-saving tips from experts. Every drop does count.
At the moment, expect to spend at least P60/liter on gasoline and Diesel depending on your location. - Regular car maintenance
As your car spends more and more time on the road, certain parts will naturally wear out over time. You'll then have to take it to a service center to replace or repair certain parts. Sure, you can save a bit of money now by not having it serviced, but it could cost you more later on as the issue worsens, whether it's replacing an old battery, fitting a new set of brakes, or fixing leaks in your engine.
New cars usually get free periodic maintenance service for the first few months, or the distance traveled. From there, you'll have to spend out of pocket, which can be around P14,000 annually. - Other ongoing costs
Aside from your monthly amortization, registration, insurance, fuel, and maintenance, also factor in toll and parking fees.
Parking fees might not seem much, but once you add them up, you could easily be looking at several hundreds of pesos each month on parking alone. Toll fees, meanwhile, are especially important if you use toll roads like the Skyway, SLEX, and NLEX. They can cost you thousands of pesos per month so be sure to add them to your budget as well.
Once you’ve considered these, you can finally get that first car! Make sure it’s well maintained and protected from the unexpected so you can finally go on that dream road trip!
Also, consider getting AXA's car insurance to help boost your safety and peace of mind while you're on the road.
Know you can game plan your way to owning your dream car. Contact an AXA financial advisor to learn more about getting car insurance in the Philippines.
