{"id":13287,"date":"2026-06-17T12:00:27","date_gmt":"2026-06-17T04:00:27","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=13287"},"modified":"2026-06-18T17:41:58","modified_gmt":"2026-06-18T09:41:58","slug":"true-cost-of-vehicle-ownership-car","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/true-cost-of-vehicle-ownership-car","title":{"rendered":"What’s The True Cost Of Vehicle Ownership? (2026)"},"content":{"rendered":"

<\/span>What does it actually cost to own a car in Malaysia?<\/b><\/span><\/h2>\n

Buying a car is one of the biggest financial commitments most Malaysians will ever make, but the sticker price is only the beginning. Once you factor in financing interest, fuel, insurance, servicing, road tax, parking, and toll, the total cost of ownership over five years can easily be double what you paid at the showroom.<\/span><\/p>\n

A lot has changed since our last update. Petrol is now priced very differently depending on whether you qualify for the Budi 95 subsidy. New hire purchase laws that took effect on 1 June 2026 have changed how car loan interest is calculated. And there’s a vehicle scrappage grant on the table for owners of older cars. Here’s the full picture.<\/span><\/p>\n

We’ll use the <\/span>Proton Persona 1.6 CVT Executive<\/b> as our reference car, a popular B-segment sedan priced at <\/span>RM57,800<\/b> (OTR, Peninsular Malaysia, as of 2026), and model costs over a five-year ownership period.<\/span><\/p>\n

1. Hire purchase financing<\/strong><\/h3>\n

Unless you’re paying cash, you’ll need a hire purchase (HP) loan, which finances up to 90% of the car price. Most buyers put down 10%, leaving RM51,920 to be financed.<\/span><\/p>\n

Here’s an estimate based on a 3.5% interest rate over five years:<\/span><\/p>\n

\n\n\n\n\t\n\n\t\n\t\n\t\n\t
Loan amount<\/th>RM51,920<\/th>\n<\/tr>\n<\/thead>\n
Interest rate<\/td>3.5% p.a.<\/td>\n<\/tr>\n
Tenure<\/td>5 years<\/td>\n<\/tr>\n
Monthly instalment<\/td>~RM1,013<\/td>\n<\/tr>\n
Total interest paid<\/td>~RM9,100<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/span><\/p>\n

What changed in 2026:<\/b> The Hire Purchase (Amendment) Act 2026 came into force on 1 June 2026. It abolishes the old flat-rate and Rule of 78 method, which front-loaded interest so that early settlement saved you very little, and replaces it with a reducing balance method. This means if you settle your loan early, you’ll actually pay less interest. For new HP agreements signed from 1 June 2026 onwards, banks must also disclose the Effective Interest Rate (EIR), so you can compare the true cost of financing across lenders more easily.<\/span><\/p>\n

<\/span>Find the Right Personal Financing for You<\/b><\/p>\n

See what you qualify for in minutes. Compare rates and options across multiple providers, all in one place.<\/span><\/p>\n

\u2192 Check My Eligibility \u2192<\/span><\/a><\/div><\/div><\/span><\/p>\n

2. Depreciation<\/strong><\/h3>\n

Depreciation is quietly the biggest cost of car ownership. The moment you drive off the lot, your car is worth less than you paid for it.<\/span><\/p>\n

For a Proton Persona, depreciation over five years typically runs at around 55-60% of the original price.<\/span><\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t
Purchase price<\/th>RM57,800<\/th>\n<\/tr>\n<\/thead>\n
Depreciation rate (est.)<\/td>~55%<\/td>\n<\/tr>\n
Depreciated value lost over 5 years<\/td>~RM31,790<\/td>\n<\/tr>\n
Estimated resale value after 5 years<\/td>~RM25,000\u2013RM26,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Factors that accelerate depreciation include high mileage, accident history, modifications, and selling through a dealer rather than privately.<\/span><\/p>\n

2026 note:<\/b> If your current car is over 20 years old, the Budget 2026 vehicle scrappage incentive offers a matching grant of up to RM4,000 when you trade it in for a new national car. This effectively reduces the upfront cost of your next car, worth factoring in if you’re on the fence about upgrading.<\/span><\/p>\n

3. Petrol<\/strong><\/h3>\n

Petrol is the second-largest ongoing cost of car ownership, and in 2026, how much you pay depends heavily on whether you qualify for the Budi 95 subsidy.<\/span><\/p>\n

What is Budi 95?<\/b> Since 30 September 2025, RON95 is no longer a blanket subsidy. Eligible Malaysians (B40 and M40 income groups with MyKad-registered vehicles) pay a fixed RM1.99\/litre, capped at 300 litres per month. T20 earners pay the market rate, which as of this week (28 May – 3 June 2026) stands at <\/span>RM3.92\/litre<\/b>.<\/span><\/p>\n

Using the Persona’s rated fuel consumption of 6.1 litres per 100km and an average of 1,000km per month:<\/span><\/p>\n

\n\n\n\n\t\n\n\t\n\t
<\/td>Budi 95 (RM1.99\/L)<\/strong><\/th>Market rate (RM3.92\/L)<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Monthly petrol cost<\/strong><\/td>RM119<\/td>RM239<\/td>\n<\/tr>\n
5-year total<\/strong><\/td>RM7,134<\/td>RM27,744<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/span><\/p>\n

That’s a difference of over <\/span>RM20,000 over five years<\/b> depending on your eligibility, one of the most significant cost divides in Malaysian personal finance right now.<\/span><\/p>\n

Note: Market rate prices are reviewed weekly by the Ministry of Finance under the Automatic Pricing Mechanism (APM) and will fluctuate. The RM3.92\/litre rate is current as of June 2026.<\/span><\/i><\/p>\n

4. Maintenance and servicing<\/strong><\/h3>\n

Routine servicing is essential for keeping your car running well and preventing expensive repairs down the line. Proton’s standard maintenance schedule for the Persona over five years (to 100,000km) comes to approximately <\/span>RM3,800-RM4,000<\/b> in total servicing costs. The Persona comes with a five-year\/150,000km warranty, which covers defects but not routine service costs.<\/span><\/p>\n

As a rule of thumb: budget <\/span>1% of your car’s value per year<\/b> for maintenance, and keep a separate emergency fund of about <\/span>10% of the car’s value<\/b> for unexpected repairs.<\/span><\/p>\n

5. Road tax<\/strong><\/h3>\n

Road tax for a 1,600cc saloon car in Peninsular Malaysia remains <\/span>RM90 per year<\/b>, or <\/span>RM450 over five years<\/b>. This is unchanged.<\/span><\/p>\n

East Malaysia residents pay lower rates. EV owners now pay road tax based on motor output (kW) following the end of the road tax holiday on 31 December 2025, a mid-range EV typically pays RM160-RM280\/year under the new structure, still considerably less than an equivalent petrol car.<\/span><\/p>\n

Road tax can be renewed digitally via myJPJ and is accepted at the Singapore, Thailand, Brunei, and Indonesia borders.<\/span><\/p>\n

6. Car insurance<\/strong><\/h3>\n

Your annual car insurance premium is one of the more variable costs of ownership, depending on your car’s market value, engine capacity, coverage type, and No Claim Discount (NCD).<\/span><\/p>\n

For a Proton Persona with comprehensive cover, here’s a rough estimate across a five-year ownership period (assuming 0% NCD in year one, building to 55% NCD by year five):<\/span><\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t
Year<\/strong><\/th>Estimated Premium<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Year 1 (0% NCD)<\/td>~RM1,300<\/td>\n<\/tr>\n
Year 2 (25% NCD)<\/td>~RM975<\/td>\n<\/tr>\n
Year 3 (30% NCD)<\/td>~RM910<\/td>\n<\/tr>\n
Year 4 (38.33% NCD)<\/td>~RM800<\/td>\n<\/tr>\n
Year 5 (45% NCD)<\/td>~RM715<\/td>\n<\/tr>\n
5-year total<\/strong><\/td>~RM4,700<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Estimates based on 2026 market rates for Peninsular Malaysia. Actual premiums vary by insurer, compare quotes before renewing.<\/span><\/i><\/p>\n

One important note: making a claim resets your NCD to 0%. For minor repairs under RM1,500\u2013RM2,000, it’s often cheaper to pay out of pocket and protect your NCD.<\/span><\/p>\n

Add-ons to consider: windscreen cover, flood coverage (especially relevant if you live or commute in a flood-prone area), and NCD protection.<\/span><\/p>\n

7. Parking and toll<\/strong><\/h3>\n

These costs are highly variable depending on where you live and work, but they add up faster than most people expect.<\/span><\/p>\n

For a city commuter in the Klang Valley:<\/span><\/p>\n