Updated: May 27, 2023
Buying a car is a popular financial goal for Pinoys, especially for young urban professionals. And banks have made purchasing one through car or auto loans easier.
Save up for the downpayment, then apply for a loan and pay the balance in installments for several years. In the corporate world, some companies can even shoulder a portion of the purchase cost as part of their employment benefits.
While it has become easier to buy a car these days, keeping up with the costs of owning one has become harder. The rising fuel price is just one of several costs that make it more expensive to maintain a car today.
So before you buy that car, remember this list of expenses you’ll have to budget for. Beyond your car loan monthly payments, make sure that your income and cash flow can afford all these as well.
Fuel
Your most obvious expense for owning a car would be fuel costs. Determine the total distance you’ll probably drive every month, and you can estimate how much your fuel expense will be.
For example, if your office is 25 kilometers away from your home and you work five days a week, then that’s around 1000 kilometers of driving every month.
If the car you plan to buy has a fuel economy rating of 20 kilometers per liter, you’ll consume about 50 liters of gasoline. If gas is priced at P45 per liter, then that’s a monthly expense of P2250.
Of course, the actual cost will be higher because you’ll also use the car during weekends, and go to places other than the office.
Toll and Parking Fees
When computing their budget, car owners often forget to account for tollways and parking fees. You shouldn’t, as this tends to be a significant amount.
For example, someone living in Alabang who works in Makati will have around P9600 worth of monthly expenses because of the SLEX tollway and Makati parking fees.
Repairs and Maintenance
You need to have an oil change every 5000 kilometers, which will be every 3-4 months. Buy new tires every 4-5 years. And if you’re too busy, pay for a car wash as well at least once a week.
There will be other preventive maintenance services that you’ll have to pay for. This largely depends on the brand and model of your car. And, of course, this depends on your usage as well.
Assuming your car is in good condition, you’ll spend around P30,000 per year on repairs and maintenance. This expense will slowly but surely go up as your car becomes older.
LTO and Registration Fees
Several necessary expenses will cost you around P3500 per year. This covers the annual LTO registration fees, emission testing costs, and the price of CTPL insurance.
Again, this can vary depending on your car’s model.
Vehicle Insurance
Compulsory Third Party Liability (CTPL) insurance is mandatory for the registration of a motor vehicle in the Philippines. However, getting car insurance is optional but otherwise recommended.
Comprehensive car insurance will cover auto accident repairs, bodily injury, and property damage. While this won’t happen yearly, there’s no price for having peace of mind against such financial emergencies.
Comprehensive coverage premiums will vary depending on your car’s model and where you’ll get it. On average, insurance premiums will cost P15,000 a year.
Total Cost
What’s the total cost of owning a car in the Philippines?
Assuming a monthly amortization of P17,000 for a 5-year auto loan and then adding up the abovementioned costs. Your total expenses for buying that car would be around P32,000 monthly for the first five years.
Once you’ve paid your loan in full, expect to continue spending around P16,000 per month or P192,000 per year from the abovementioned costs.
Please note that these figures are just estimates and are based on March 2018 prices in Metro Manila. It’s still best to do your own research on the current costs and have your own computation.
For example, if you live and work outside Manila, you probably don’t have toll and parking fees to consider. And your fuel and insurance costs would surely be different.
The real lesson here is that you should account for these expenses in your budget BEFORE getting that car. Remember, it’s not enough to check if you can afford to buy it; you also need to see if you can afford to own it.
Have a safe and comfortable drive!
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was planning to get a Hilux this year… this was helpful.
Another thing to consider when you’re actually thinking of getting a vehicle is to choose the right one. For example, a lot of people get 4wd cars but they don’t even need it or don’t even go to the mountains. Or, do you really need an SUV or a pick up truck when all you really need is a compact car? 4wd, SUVs and pick up trucks costs a lot more on gas and maintenance when compared to a regular car, especially if it’s a compact ( or sub- compact) car.
The computation and expenses is really close to my estimations. A helpful article! Thank you!
We are resisting the purchase of the vehicle we really want to own for as long as possible. We generate more than enough income working from home to cover all of our expenses. Our three Philippine based business ventures require my beautiful bride to venture out one sometimes two days every two weeks. Those local business operations are growing through compounding all the after tax earnings through reinvestment back into the business. Maybe if we had to go out daily we would want or feel the need for a new vehicle now but we do not. Personally, I like the idea that we can pay cash when we are ready and much of the usage will be a tax deductible business expense.
Most modern vehicles do not require an oil change every 5K km. Do you still use regular oil in PH? All the new Toyota’s look modern. I bet they need it once every 10K km, but synthetic oil is a lot more expensive. US Toyotas are once every 20K km, if not driven in dusty or hilly areas. Besides that, there are almost no maintenance costs for the first 5 years of owning a new car. That is the whole point of buying new. And many dealerships offer the oil changes for free for the first couple years. Interest of the loan would add cost. And other taxes and fees.