Hiring v buying

[Barney R]

Last year my hire costs for the latest Dmax or Toyota 4wd 4 door diesel top of the range was B75,00 over 80 days the rest of the time I only need a motor bike . My girlfriend wants to buy new but I disagree I am better of just hiring when needed . I have the money to buy new in blue chip shares that are yielding 7.5 % and gained 12.5 % last year My reasons are :

New 4 door. B 1,000,0000 ( approx ) on road

Licensing ,insurance ect annually B55,000. (Approx )

Maintance,tyres ,cleaning ect B20,000 averaged over 4 years

Depreciation B75,000 ( guess ) / year

Loss of income from shares B75,000

I am fully covered for insurance in the hire car so in real terms I figure I am B150,000 /year better off hiring against buying . I am not a real expert in this area so any input would be appreciated . I would not be interested in buying second hand or having a smaller vehicle .

[topt]

I would be interested in knowing what "blue chip" shares yield 7.5%?

The biggest issue for me is convenience - how convenient is it to go and hire if you suddenly decide you need a truck? If that is not a factor then I would agree with you.

I am surprised you can hire top end that cheaply (less than a 1000 baht a day) and I would be concerned about the insurance coverage - but since you mention that specifically I guess you have checked carefully.

[casualbiker]

Don't buy new. Buy near new and save the money!

[Barney R]

I would be interested in knowing what "blue chip" shares yield 7.5%?

The biggest issue for me is convenience - how convenient is it to go and hire if you suddenly decide you need a truck? If that is not a factor then I would agree with you.

I am surprised you can hire top end that cheaply (less than a 1000 baht a day) and I would be concerned about the insurance coverage - but since you mention that specifically I guess you have checked carefully.

I have a great relationship with the hire companies owner and the vehicle gets delivered to my door as I live about 2 Kms from them . Generally I give them 12 or so hrs notice but have rang in an emergency and the vehicle was delivered within 15 minutes . Yes I have checked the insurance closely. The blue chip stock is tabcorp in Australia but the 4 major banks run fairly close also cheers Barney

[culicine]

Don't buy new. Buy near new and save the money!

That only works if you make a cash purchase. have you seen the interest rates for buying second hand. They can be 3-4 times the interest rate of financing a new car. You could end up paying more for a newish second hand car (with unknown history - accidents?) than a new one. Personally, I like the convenience of having a car. Hiring only works if you know exactly what time periods you will need the vehicle.

[casualbiker]

Don't buy new. Buy near new and save the money!

That only works if you make a cash purchase. have you seen the interest rates for buying second hand. They can be 3-4 times the interest rate of financing a new car. You could end up paying more for a newish second hand car (with unknown history - accidents?) than a new one. Personally, I like the convenience of having a car. Hiring only works if you know exactly what time periods you will need the vehicle.

So buy carefully! Interest can be higher so be diligent.

[CTO]

If your not a heavy user, I agree, for a number of years I rented a few times a month, for weekends away etc, for a holiday I'd do a one week rental, good place I know near Victory Monument and it cost for a Altis 800 a day, so great value. When kids started going to school, cost of the school bus was almost the same as monthly car repayments, so bought a car as it was now being used three or more times a day.

I think more people could hire and be just as happy. I was for a number of years

[misterphil]

Barney R.

I was in exactly the same boat you are in 2 years ago. I rented Fortuners and Vigos for over 6 years. Yes it was cheaper over the year, but the convenience totally overcomes the cost.

Go for it, Toyota do a new Vigo now with black interior and black leather seats with GPS and all the bells and whistles. Cant trade mine in cause we have the government rebate and have to keep it for a few more years or we lose the 100,000 they gave us back (well my wife back) I just see it as renting. !4,000 a month and I can drive the truck anytime I want, and my wife also lets me drive her and her friends around when she asks me too LOL

[Estrada]

I would be interested in knowing what "blue chip" shares yield 7.5%?

The biggest issue for me is convenience - how convenient is it to go and hire if you suddenly decide you need a truck? If that is not a factor then I would agree with you.

I am surprised you can hire top end that cheaply (less than a 1000 baht a day) and I would be concerned about the insurance coverage - but since you mention that specifically I guess you have checked carefully.

BTS, AIS, AIT, INTUCH etc pay around 7.5% on top of that they also appreciate in value. I am making around B4Million per year on a B15Million baht portfolio which is around 26% per annum. My original investment in the SET was B6Million in 2009. From the profits I have bought a house and a car paying cash. The golden rule is to buy low and sell high and don't get greedy or panic. Too many sell low and buy high.

My experience has been different as regards depreciation. I had a pick up stolen and got B100,000 more than I padi for it. Also my 6 year old Honda Civic fetched the same price as 6 years ago although that is much less than the currentprice of a Civic due to inflation. Last year I bought a Honda CRV 4WD drive with cash as I don't like debt and paying interest charges.

[Sydebolle]

Your depreciation of THB 75'000/year (on a car value of THB 1'000'000) is completely off. The first year you knock off 25%-30% and then another 20%/year; depreciation life time of a car is max. five years (if done on a company's account).

Valuation of cars, for the lack of anything better I found, you might want to use:
https://www.redbookasiapacific.com/rbcert/index.php?lang=en&cc=th
worked fine with me.

The one comment to buy "near new", i.e. somebody who bought a new vehicle and cannot keep up the instalments etc. would be another option.

Good luck!

[stopthegreed]

Simple case of Mathematics,

You have done your sums, now do what you want. Why are you asking people here, what you should do with your money

[KhnomKhnom]

When I got to Thailand years ago, I wanted to have A CAR AND DRIVER. The idea of being chauffeured seemed very luxurious and very "white man enjoying foreign tropics." Then, I realized I have a chauffeured car anytime I want..... IT IS CALLED A TAXI.

[Don Aleman]

I have several ex pat acquaintances, much like you, with to much money and to little common sense ! They all bought cars which 90 to 95 % of the time sit in the garage or, out in the street. With your moola you can hire a really nice car and driver for just when you need them. You probably fly once in a while but you, probably, didn't buy a plane or, well, maybe, YOU did !

[HUAHIN62]

Next year you could lose 50% of your share value and have a zero % return. But if you are only here for a few months a year its better to rent a vehicle even if you put your money in a fixed deposit at 3%.

[khunPer]

Leasing a car for some 1,000 bath a day or around 300k or more a year compared to the costs for owing a new car, OP’s calculation of saving in the area of 150k seems IMO fair enough.

The first few years I was here in-and-out I hired a car, a small Suzuki Jeep Caribbean, which I got for a fair price of 15,000 baht a month; presume just the mandatory insurance. When staying more regular here that would be some 180,000 baht a year, so buying a car seemed reasonable – well it was the plan from the beginning.

Until my “full move” to Thailand I thought of just buying some second hand that could last for 2 or 3 years. Calculating 2 years rent as 360k a second hand around 300k plus the expenses sounded fair, if that could live for 3 years and perhaps give me around 100k back when sold.

Secondhand small Suzuki jeeps seemed too expensive, quite old ones were priced 400k or more, and compared to a new priced little over 500k that was not attractive. Second hand cars in general seemed to be priced quite high in Thailand. I managed however to find a fairly good condition Jeep Cherokee for 350k, negotiating it down to 325k. That was a lot more comfortable than a small Suzuki and seemed like an Okay replacement; even it used a bit more gasoline. Full insurance was about 25k, getting down over time if I – or rather the car – had no accidents. I also calculated another 25k annually average in ongoing maintenance; so total around 450k for 3 years or 150k a year, not more than renting an old small jeep included the higher gasoline use, and if I could get just 100k back after 3 years I saved a bit, some 30k or more in average a year, i.e. 15-20 percent.

I ended up being the happy owner of the Jeep for some 8½ years, insurance down to less than 15k annually and maintenance for keeping the car in good condition within the 25k a year; so my investment ended up as rather 40k a year for car plus in average another 40k for insurance and maintenance; as labor cost is cheap in Thailand, so having an old car running is possible. Compared to renting a small old jeep for 15k a month I saved 100k a year or 55%. The best of all was, that when I after more than 8 years changed to the brand new car I originally had planned for, I got unbelievable 120k cash in my pocket…

My experience:

Seems like, that if you can find a bargain in a good or fair condition, a second hand car may be an option, otherwise I would always buy a new with service a guarantee, you don’t loose as much in value as home apart from perhaps the first year, where a new car always loose value at the moment it rolls out of the showroom. The price of my new car (Toyota) included full insurance and service, so apart from 3,000 baht for the number plates it only costs me gasoline and cleaning; and in the coming years only parts (ties and…) and products (like oil) when doing the planned maintenance at Toyota.

May well be worth to a keep a new car for 4 years only and then change to another brand new one – loss of value seems to be around 30 percent only – perhaps some other forum members will share their experience…?

[rotary]

Don't buy new. Buy near new and save the money!

Everything I see nearly near is almost a new price. Just have a bit of engine trouble or buy a wrecked rebuild by accident and your cost savings are gone. I think buy new or old. No almost new

[Time Traveller]

deletedpost

Edited September 5, 2014 by Time Traveller

[Time Traveller]

When I got to Thailand years ago, I wanted to have A CAR AND DRIVER. The idea of being chauffeured seemed very luxurious and very "white man enjoying foreign tropics." Then, I realized I have a chauffeured car anytime I want..... IT IS CALLED A TAXI.

sure if you're not worried about the dirty car or the driver's criminal record or having to tell them everytime the driving directions or forgetting things left in the cab that you will never see again.

And who is more likely to get into road rage, a chauffer or a taxi driver coming to the end of a 12 hour shift ?

Edited September 5, 2014 by Time Traveller

[Robert24]

I think you are right from an investment point of view, a car is very bad usually and all you do is loose money on it in terms of depreciation and cost. Definitely compared to other investments. So if you can save money by renting a car for part of the year that sounds like a rational decision.

For me I don't compare a car to other investments. For me I like to own a nice car for convenience and also because it represents some emotional value to me. It's similar to when you buy a nice watch or something like this. You usually do it for emotional reasons because it looks good and you like it and don't look at it as investment.

[bazza40]

Buy a secondhand car that's been 1/ Owned by a falang who has been obsessive about servicing 2/ Under 100,000 km 3/ Toyota or Nissan, at a stretch Mitsubishi. Look for something in the 250K to 350K baht range. Spend about 20,000 baht on tyres, shock absorbers, brakes, belts as necessary. It will pay for itself in 2 - 3 years against a rental, and you should get 150,000 km out of the engine. I've seen some that rack up 400,000 km.

Don't waste money on SUV's, pickups, utilities - call them what you will. They drink fuel, ride uncomfortably and are too large to park in most Thai cities. If you want to cart motorbikes and furniture around Thailand, they're great.

[pasak]

I would be interested in knowing what "blue chip" shares yield 7.5%?

The biggest issue for me is convenience - how convenient is it to go and hire if you suddenly decide you need a truck? If that is not a factor then I would agree with you.

I am surprised you can hire top end that cheaply (less than a 1000 baht a day) and I would be concerned about the insurance coverage - but since you mention that specifically I guess you have checked carefully.

BTS, AIS, AIT, INTUCH etc pay around 7.5% on top of that they also appreciate in value. I am making around B4Million per year on a B15Million baht portfolio which is around 26% per annum. My original investment in the SET was B6Million in 2009. From the profits I have bought a house and a car paying cash. The golden rule is to buy low and sell high and don't get greedy or panic. Too many sell low and buy high.

My experience has been different as regards depreciation. I had a pick up stolen and got B100,000 more than I padi for it. Also my 6 year old Honda Civic fetched the same price as 6 years ago although that is much less than the currentprice of a Civic due to inflation. Last year I bought a Honda CRV 4WD drive with cash as I don't like debt and paying interest charges.

Buy low and sell high eh? I'd never have guessed. Better go back to the drawing board.