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Zero Downpayment VS xx% Downpayment

I’m going to buy a new car in several months and I’m trying to figure out how much down payment I should have. I’ve heard tons of different answers from different people. What’s your take?

One rule of thumb that you need to remember when buying a car it is always depreciating in term of values. Logically a larger down payment reduces the size of your monthly payments.

Let’s say I want to buy a car that price RM60K and paid the down payment worth 10% of the car market price. The monthly installment should be RM664.25 if given the interest rate is at 3.65% per annual:

Car Purchase Price (RM) *:      60 000
My Down Payment (RM)*:     6 000
Interest Rate in % *:     3.65 per annual
Repayment Period in Months *: 108
Monthly Installment: RM 664.25

But I changed my mind. I want to go with zero down payments. The monthly installment now should be at RM 738.06.

Car Purchase Price (RM) *:      60 000
My Down Payment (RM)*:     0
Interest Rate in % *:     3.65 per annual
Repayment Period In Months *: 108
Monthly Installment: RM 738.06

At the end of the 9 years tenure I have been paying to the  bank RM71 739 if i go for the option 1 and RM 79 710.48 for option 2.Meaning i have been paying RM 7971.48 extra to the bank on top of the interest.

Remember that I still have RM6000 that was initially plan to use as a down payment but was canceled? To make it interesting, I decided to invest the RM6K into Amanah Saham Bumiputera with no annual addition. If they can give me a consistent return of 6% per year in 9 years the amount will be RM 10,136.87.Minus the extra RM7971.48 that I have paid to the bank with the option 2  I have choose, actually I have already made an extra of RM 2165.39 with the principal untouched !

There’s still a downside on this strategy. Let’s say I go onto the lot with no down payment, pick out a brand new car, and drive it off the lot. The second I drive off the lot, your car depreciates about 20%. Now, I drive it around for a month and suddenly I lose my job – and I realize I need to sell this expensive new car.

The best I’ll probably be able to get for the car is about 80% of the asking price, but if I’ve made no down payment, even selling the car right now will leave me with 20% of your loan unpaid and nothing to show for it. This is called being “upside down” in a car loan, and it’s something to avoid if all of us can and please don’t buy a car with zero down payments without you having any saving in hand with at least of 10% of the car price.

Never in the automotive world of Malaysia, the car is worth the price.

Tags: maybank ezyauto

They Enjoy Feeling Superior

Do you have a friend despite being absolutely beautiful or good looking, would complain about her bad skin (it was flawless) or her big butt (it was perfectly shaped) or her small breast and now that she’s all grown up, she’s got grown up things to complain about.

She complains that she spends too much time working because she’s so smart that she blows through her clients at lightning speed. She complains that her father works too much because he just got some big business going on and now runs the world and she complains about her clothes while it was already fine within her friends even the best of all. She complains that her boyfriend is not taking care of her enough while it is already clear that he love her. I do.

But here’s the thing she isn’t complaining. She’s boasting, albeit in a sly, undercover sort of way. She thinks that by making some barely self-deprecating comments, she’ll appear humble and not sing her own praises – but it ain’t working for me.

I called it “pseudo-complain”. Define as a ways to share exciting news with your “BEST” friends that won’t make you appear like a braggart, but to broadcast your successes ad nauseam is bad form and will only make others feel at best – envious and at worst – inadequate and what’s the point in that?

Pseudo-complaining isn’t any better and it may even be worse because the reason you’re pseudo-complaining is because you know deep down that bragging is tacky, but you just can’t help yourself so you sneak it through the back door.

The thing is if in fact you are brilliant and super successful…that’s great. Really! You SHOULD be proud. Enjoy your successes in life and celebrate those accomplishments. But to be cool, you’ve got to play it cool. Okay maybe cool will not be the right word. Just be moderate and silent if you can. If you are good enough, people will know sooner or later.

But if you really having behavioral problems and your family having crisis, but you boast as a way of spinning the situation because it makes you feel better about yourself – there’s no need. Nobody’s perfect. We’re all human and we all have our own issues to deal with. Maybe if you consider your life an adventure – complete with peaks and valleys – you won’t get so caught up in how it appears to others.

If you find yourself in a conversation with someone who can’t stop yammering about how great her life is, or how fat she is (when she’s clearly a skinny bitch)…smile, nod, and look for someone more interesting (and genuine) to talk to.

Yeay !

Yesterday was my birthday. If it was calculated from Wednesday, September 5, 1984 till the moment I am typing this, my age will be :

    = 789,004,800 seconds
    =13,150,080 minutes
    = 219,168 hours
    = 1304 weeks (rounded down)
    = 25 years, 1 day

I would like to say thank you to:

 jaar,izhar,liyana,zati,slickz,remi,nadia,eita,syariza,farah,elly,mimi,sue,
nanie,nuar,faizham,mawar,shad,fitri,linda,jue,marul,mislina,isma,baizura
ayu,ellya,padil and others for the warm wishes.

Thanks again and Godspeed everyone !