If you are a car owner, does your pay match your car ownership status? If you don’t have a car, how do you know whether you can afford one? In this article, Salary.sg proposes using $7,650 as an income guideline for car ownership in Singapore.
We all know that owning a car in Singapore is a luxury. A small saloon costs around $50k while a family MPV can easily set you back by $80k or more. Don’t forget you also need to pay for road tax, car insurance, servicing, petrol, ERP, parking fees, cleaning, grooming and what have you.
If your income is not high enough, it may be a stretch for you to fund the costs of owning that set of wheels in Singapore.
According to the Household Expenditure Survey (HES) report recently released by the Singapore Department of Statistics, only 38% of households here own a car.
From the popular Salary.sg household income comparison tool, we can find out that the top 38% highest earning households make more than $7,650/mth. Though this group of 38% may not be exactly the same as the car-owning 38%, we argue that this is the group that can well afford a car. If this group can’t afford a car, we don’t know who can.
Hence the $7,650 guideline.
So, if you and your spouse own a car but make a combined salary of less than $7,650 a month, it may be a wise thing to do your sums again.