Cost Of Car Ownership In The Philippines

Cost Of Car Ownership In The Philippines

An earlier survey found that for more than 80% of Filipinos, a car is an important tool in life. Those who live in more congested areas and experience the struggles that come with public transportation, in particular, will be more attracted to the idea of owning one, as a private car can help ease daily commutes. 

The numbers certainly reflect just how much Filipinos value cars, as a 2017 report indicates that cars make up about two-thirds of the 2.7 million vehicles that pass through Metro Manila every day. Similarly, trends over the past few years have allowed for more Filipinos to own a car – such as the addition of millennials to the workforce, which enabled them to have access to resources that make car ownership possible.

Globally, the lure to get behind the wheels is also a well-funded venture. According to Two Cents by PBS, car companies spent around $14.2 billion in marketing in 2014 alone. And cars have been seen as integral to society, especially American society, since the 1950s.

However, the actual cost of owning a car is not always clear from the get-go. There are a lot of ancillary costs that add up over time. In this article, we examine the true cost of owning a Toyota Vios, the most popular car in the Philippines, for five years.

1. Financing

Unless your pockets are deep enough to buy a brand new Toyota Vios in cash, chances are you will have to get a purchase loan in order to buy the car in the Philippines.

Although there are some really low down payment deals, the interest rates are what usually increase the cost of ownership. The standard down payment for buying a car in the Philippines is at least 20% (but you still have the option of putting down more) with a maximum of 60 months or five years to pay the loan off. This is the cost of in-house financing and can differ depending on the loan provider.

For your information

Total Toyota Vios market price: ₱1,005,000

Downpayment: ₱201,000

Monthly instalment: ₱18,269

Total interest over loan tenure: ₱201,000 + ₱1,096,140 (18,269×12) = ₱1,297,140

*Calculation is based on Toyota financial calculator

The longer the car buyer decides to pay for the vehicle, the more expensive the loan will be. However, with either a bigger down payment or a shorter monthly payment plan, the car buyer will be able to save a significant amount of money.

2. Depreciation

Depreciation is naturally the highest cost of owning a car. It is generally how well the vehicle is expected to hold its value over time. This is particularly if you keep the car for less than five years as the depreciation rate is always higher in the initial years of ownership.

The moment you purchase a car, you are already spending thousands of dollars which will only accumulate over time. Although a car is technically considered an asset, it is actually more of a utility or a liability depending on how it’s used.

Calculation of depreciation of a Toyota Vios over 5 years

Price of a brand new car year 2021: ₱754,854

Depreciation value year 2022: ₱736,112

Depreciation value year 2023: ₱722,292

Depreciation value year 2024: ₱714,297

Depreciation value year 2025: ₱698,867

Total depreciation value: ₱55,986

*Price calculated based on car value of ₱754,854 with 120,000 km

The average mileage per year is about 24,000kms for a total of 120,000kms. The price of depreciation might differ depending on mileage, brand, history of reliability, degree of wear and tear, modifications and who will be buying the car. Selling the car to a car dealer will lower the car price further.

3. Gas consumption

Surprisingly, petrol is the second-highest cost of vehicle ownership.

Choosing a fuel-efficient car can help decrease the cost of owning a car significantly. Generally, the Toyota Vios gets a good 10 kilometers a liter. For those getting a good 24,000kms a year, you’ll need about 2,400 liters a year.

Gas consumption over five years

Average/estimated fuel price: ₱73.30

Fuel consumption:  8.5 kms per 1 liter (city drive with mid to heavy traffic)

Total mileage: 1,000kms x 12 months x 5 years = 60,000kms

Total petrol consumption: 60,000kms / 8.5km per liter x ₱73.30 = ₱517,411.76

*Calculation is based on the petrol price as of August 24, 2023 according to globalpetrolprices 

4. Maintenance and repair

The key to keeping the car in mint condition is to get maintenance on a consistent basis, maintenance costs are generally quite low in comparison to repair costs.

Although most new cars already come with a five-year warranty, sometimes the warranty does not really cover service costs. Over a 60-month (5-year) period, the estimated costs for maintaining and repairing a car can range from approximately ₱375,000 to ₱675,000.

These costs encompass regular maintenance intervals, such as every 6,000 km, 12,000 km, 18,000 km, and so forth. For the intervals of 6,000 km to 54,000 km, the estimated costs vary between ₱7,500 and ₱112,500, depending on the interval. The final interval of 60,000 km is estimated to cost between ₱75,000 and ₱125,000.

These figures are approximate and account for maintenance items like oil changes, filter replacements, and periodic repairs. That said, do keep in mind that actual costs may differ based on factors such as part prices, labor rates, and unexpected repairs. It’s advisable to refer to your vehicle’s manual and consult professionals for accurate maintenance schedules and costs.

Common maintenance routine inclusions:

  1. Engine Oil Filter: The cost of an engine oil filter can range from around ₱150 to ₱500 or more, depending on the brand and compatibility with your vehicle.
  2. Engine Oil: The cost of engine oil can vary based on the type (conventional, synthetic blend, full synthetic) and the oil’s quality. Prices can range from ₱500 to ₱3000 or more, depending on the oil and the oil capacity of your vehicle.
  3. Spark Plugs: Spark plug costs vary depending on the brand and type. You can expect to pay around ₱100 to ₱300 per spark plug, and most vehicles have 4 to 6 spark plugs.
  4. Drain Plug Gasket: These are usually inexpensive, typically around ₱20 to ₱100.
  5. Air Filter: Air filters can range from ₱200 to ₱1000 or more, depending on the brand and compatibility.
  6. Transmission Oil: Transmission oil change intervals can vary, but costs for transmission oil and labor for this service can range from ₱1000 to ₱3000 or more.
  7. Fuel Filter: Fuel filters usually cost around ₱100 to ₱500 or more, depending on the brand and compatibility.
  8. FEAD Belt (Accessory Belt): The cost for a FEAD belt can range from ₱500 to ₱1500 or more, depending on the vehicle.
  9. Car Wash and Buffing: The cost of car wash and buffing services can vary widely based on location and the level of service. Monthly costs could range from ₱500 to ₱2000 or more.
  10. Brake Pads: Brake pad costs vary greatly depending on the quality and brand. A set of brake pads could cost around ₱1000 to ₱5000 or more, depending on the vehicle and type of pads.

NOTE: These are rough estimates and the actual costs can vary. It’s advisable to consult your vehicle’s manual for recommended maintenance intervals and to get quotes from local service centers to get a more accurate idea of the costs involved. Also, prices tend to change constantly, so it’s always a good idea to check with local sources for the most current information.

General assumptions:

  • Oil change every 6 months or 6,000 km (whichever comes first).
  • Spark plugs replacement every 24 months or 40,000 km (whichever comes first).
  • Air filter replacement every 12 months or 20,000 km (whichever comes first).
  • Transmission oil change every 36 months or 60,000 km (whichever comes first).
  • FEAD Belt replacement every 48 months or 80,000 km (whichever comes first).
  • Fuel filter replacement every 24 months or 40,000 km (whichever comes first).
  • Brake pads replacement every 24 months or 40,000 km (whichever comes first).
  • Car wash and buffing 3-4 times a month.

Although buying a brand new Toyota Vios might come with a five-year warranty, to be on the safe side, it is better to allocate an amount every year for emergency occurrences. Although major repairs might not always happen, it’s always good to be ready whenever they do.

It’s always better to be safe than sorry when it comes to maintenance since it allows the car to stay in top shape over time. It’s much cheaper to have parts routinely taken care of instead of replaced.

5. Insurance

Another annual cost of owning a car is the insurance premium car owners have to pay. This might be higher depending on the value of the car, the insurance provider, and coverage.

The price of an Annual Premium with Acts of Nature Coverage for a Toyota Vios premium costs 12,924. In a five-year period, the car owner will spend around P64,620 on insurance. 

6. Parking and toll

Parking can be a big problem depending on where the car owner lives. Let’s say you live in a condo, either you park your car outside where it is more vulnerable to damage or buy a parking space within the condo.

Condo parking lots can cost like ₱500,000 to ₱1,500,000 depending on where the condo is located and how expensive the condo is in general. Condos do not always include parking space which means you’d have to spend extra in order to get parking.

Average price of parking per day: ₱50

Average price of parking per year: ₱18,250

Total cost for five years: ₱91,250

How much would you be paying? 

DownpaymentP201,000
Loan/financing interest1,096,140
Gasoline costs517,411
Maintenance125,000
Insurance64,620
Parking91,250
Total₱2,095,281

5-Year cost of owning a car

₱2,027,760

Though it’s easy to be a car owner in the Philippines, it is a much bigger investment than most people would expect. While cars can be quite useful depending on where you might want to go or who you might want to go with, this is not always the case. Although public transportation can be hard in some parts of the Philippines, it might be better to compute how much you spend on commuting before committing to buy a car.

If the total car price costs 2,095,281 for five years, this would mean the car owner spends roughly 419,056.20 a year. Try to compute how much you spend a year when commuting to get the difference.

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