Don't Simply Change Your Car if Still Under Loan

If your car is still under loan, don't ever go change new car because you will loss a lot of money.

For example:
Your car costs RM45,000
Down payment: RM5,000
Repayment month: 7 years(84 months)
Yearly interest: 4%

RM45,000 - RM5,000(Down Payment)
= RM40,000 (Loan) x 4% x 7 years
= RM11,200 (7 years interest)

RM40,000 (Loan) + RM11,200 (Interest)
= RM51,200 / 84 months
= RM609.5238 (month repayment)

Basically, the first 18 months payments (RM609.52 x 18 months = RM11,200++) are for the loan interest only. That means, you haven't pay anything for your principal loan (RM40,000).

If you sell your car for RM35,000 after 18 months and use this amount to pay for your previous car loan, you still need to pay another RM5,000 (RM40,000 - RM35,000) to the bank.

At the end, the car is still not yours and you still have RM5,000 of outstanding balance that you need to pay to bank.

Imagine if you kept changing car every few years and repeat the cycle. How much extra money that you are wasting?

p/s: This is my personal view only


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