Here in Malaysia, we have 65% excise tax on cars. If you pay RM 500 a month for your car, about RM 200 of it goes straight to the government. Not to Proton not to Perodua or Toyota. Some say that does no apply to local manufacturer, but I’ve yet to find concrete evidence that they are exempted from it.
I’m 26 years old that have no car. Its not that I can’t afford them, I just really hate loan. But its way past due that I take the bullet and accept this constantly depreciating item in my life. Which brings me to my question, new or used car.
First, some background, I’m single, I go to work with a motorcycle. I will most likely not going to use the car to go to work in order to prevent more of my money flowing to the government. So fuel consumption is not an issue. Its most likely going to be used to balik-kampung to Kedah. Once every two months perhaps. Car must have ABS. I had a scare before somewhere near Slim River where the Axia I used got a case of locking brakes. Car must be practical, really, the main purpose of the car is to carry stuff that I can’t carry with my motorcycle box. I have like a big table, that preferably can fit into the car. Folding rear seat is a must. MPV is even nicer. Car must be reliable or do not depreciate much. This means its mileage should not be too high. Or, its so cheap that it can’t go even lower. Car should be locally made (not necessarily designed), because its easy to find parts or repair. This leaves us to Proton or Perodua.
Preferably, I don’t want to have a loan at all. I have some money, but not enough to buy a new car. I thought of getting a dirt cheap Proton Saga to save money. But those generally don’t have ABS. More importantly, the old saga cannot fold down the rear seat, a puzzling design choice. A Viva does not even have ABS option. This leave a Myvi, but I really like the 2011 “lagi best” model, which is still expensive. To my surprise, I might as well get a new one, which is only about 50% more expensive on most case. I thought, cars depreciate really fast, but this is a 8 year old model. Why does it still cost this much? I’ve looked at carlist.my, mudah.my, facebook, all more or less the same. Which makes me think, is this the norm? How much do car really depreciate in value?
Looking into it….
Using my programming skills, I’ve scraped a website that list car for sale in Malaysia, which will be kept unnamed, for legal reason. Unlike mudah.my, this site make sure that they don’t list deposit price, or sambung-bayar price, only sale price, although generally its not OTR. This make it easy to scrape, no need to clean data. I only scrape Proton and Perodua models, remove those whose mileage is more than 250 000 km, and only consider automatic transmission. Also, they can’t be more than 15 years old, and I excluded listing from ‘dealer’, as I simply don’t trust them. Majority of the seller here are agent or private seller. And because I don’t want a really old model, I’ve specified the model name explicitly.
as_pd = pd.DataFrame.from_records(flattened)
as_pd['mileage'] = np.ceil(as_pd['mileage'].astype('float') / 5000) * 5000
as_pd['price'] = as_pd['price'].astype('int')
as_pd['year'] = as_pd['year'].astype('int')
as_pd['age'] = as_pd['year'] * -1 + 2019
as_pd['seller_type'] = as_pd['profile_type'].apply(translate_profile_type)
cond = (as_pd['model'].isin(['Alza', 'Myvi','Axia', 'Viva', 'Bezza', 'Exora', 'Saga', 'Persona', 'Iriz']))
cond = cond & (as_pd['mileage'] < 250000)
cond = cond & (as_pd['age'] < 16)
cond = cond & (as_pd['transmission'] == 'Automatic')
cond = cond & (as_pd['seller_type'] != 'dealer')
perodua_pd = as_pd[cond & (as_pd['make'] == 'Perodua')]
proton_pd = as_pd[cond & (as_pd['make'] == 'Proton')]
all_pd = as_pd[cond]So what kind of population are we looking at here. For giggles, I’ve disabled dealer filter for this occasion:
Fascinating! It seems that although in total, while there are more Protons listed, they are generally sold by dealers. Hmm…. Anyway, lets ignore that because we are not considering dealers. Then the most listed car is without much surprise, the most popular car in Malaysia, Myvi. Most listed by private seller and most listed by agent. The next privately listed car is Proton Saga. Surprisingly the second listed car by agent is actually Alza, not Saga.
Side note, I actually really want an Alza. But their price does not go down in the used market, not much at least. Now, let us plot their listed price over their mileage. This should show us how much value a car lose over the distance it traveled. I’ve splitted the scatter graph between Proton and Perodua, as 17000 points in a single plot is very hard to decipher.
Price over Mileage
Simply said, there is no easy correlation between mileage and price. We do have some pattern however, after 100000 km, the price does not drop much anymore. Depending on car, 60000 – 80000 km is a good target to look far.
There is a strange anomaly at 10000 km, where there is a bunch of cheaper car. I suspect this is some bad data, some seller putting refurbished car or just saying car with less than 50000 km as 10000 km.
There are other patterns also. Viva pretty much don’t change in price. It is cheap in the first place, and does not go much cheaper. For some reason, Iriz increase in price as mileage grow? From the scatter plot, there aren’t many car being sold when their mileage is lower than 40000 km. I suspect the sellers just say they are 10000 km in mileage.
From the scatter plot, there aren’t many car being sold when their mileage is lower than 40000 km. I suspect the sellers just say they are 10000 km in mileage. That said, mileage just does not affect the car price much and it highly vary from seller to seller. Really, what you want to look at (at least what sellers are looking at) is the age of the car.
Price over Age
Now we are looking at something. The price of a car is somewhat proportional to its age. There is a lower bound however. No car is priced below RM 10000. Brand-by-brand, Perodua does command a higher price that Proton. In fact, Alza is consistently more expensive than an Exora at age 2+. At 4+ year old Axia is actually more expensive that a similarly aged Saga. At 7 year old Saga and Persona have identical price, AND priced more or less the same as a Viva? In fact, at 8 year old, an Exora is priced similarly to a Myvi.
That said, Persona wise, this is the old persona, not the new one. Iriz still goes up in price a bit. Bezza also have a bit of a price hike at age 3. Is a newly released model more expensive when it first lunch? A new version does bump up the price a bit. For example, 7 year old Myvi is significantly more expensive than an 8 year old Myvi, due to the 2nd gen model. Axia is significantly more expensive than Viva no matter how you look at it.
A few things to keep in mind, these are all listed price. It is most likely not OTR price. Add 3k to 5k for that. It is possible that the buyer can haggle for the price, which lowers them, but I’m no good at that. Simply said, the actual buying price could be higher for me.
The price depreciation does slow down a bit. There seems to be a ulower bound of RM 10000, or RM 20000 for MPV where their price will not go lower. Or maybe the model is just not old enough for the price to go lower.
It seems that a good estimate of how a price of a car drop is to say that it have a half life depending on the model. Meaning the price will halve over some period of time. That said, its not like 2 or 3 years. Perodua seems to have a half life of 6 or 7 years. Saga and Persona have a half life of 4 to 5 years.
Much of this is perhaps just market sentiment. Perhaps. I know I don’t want a second hand Persona, because I’ve used one. It had a broken fuel gauge, then the immobilizer immobilize it, something wrong with the computer, completely replaced the dashboard, still broken fuel gauge. But that is the old Persona. Iriz have a favorable review, and the new Persona is based of Iriz. Saga is so simple, not much can go wrong. Exora on the other hand, have a turbo. And a bunch of canggih stuff. See how the price drops.
Conclusion
If you wanna buy a second hand car, buy a Proton. If you wanna buy a new car, Perodua is a better choice. Me? Old saga cannot fold rear seat down. New saga are 25k+, listed price, not OTR. OTR is probably 30k. I might as well buy a new one at 35k.
Myvi is a better choice. Lots of people selling them. A ‘lagi best’ EZi model of mileage less than 80000 can be found for 22k, which OTR is probably 25k. And its rear seat can be folded down FLAT. However, it does not really have a bonnet, which means cargo length is limited. Bezza is too new, and its rear seat is vertical. Alza however, not only have a flat folding rear seat, it have TWO rows of flat folding seat! Making it a van, which is awesome! But, I can’t find a good one below 30k, list price… When a new one is 55k, its hard to justify buying a 9 year old car for slightly more than half price.
So, did I make a decision? Nope. Why? Simply said… I’m cheap.