Owning a car is a significant milestone for many Filipinos, but it’s essential to understand that the sticker price of the vehicle is just the beginning. Total ownership costs encompass a range of additional expenses that can add up over time. Here’s a breakdown of these costs to help buyers make an informed decision and stay financially prepared.

1. Insurance Costs

Car insurance is a non-negotiable expense that protects you financially in case of accidents, theft, or damage. Here’s what to consider:

1. Comprehensive Insurance Premiums: Typically, premiums range from 1.5% to 3% of the car's value annually. For instance, insuring a vehicle worth PHP 1,000,000 could cost PHP 15,000 to PHP 30,000 per year.
2. Mandatory TPL Insurance: Third-Party Liability (TPL) is required by law and costs around PHP 1,000 to PHP 2,000 annually.
3. Additional Coverage: Add-ons like Acts of Nature or Passenger Personal Accident Insurance can increase premiums but provide broader protection.

2. Registration Fees

Vehicle registration is an annual expense in the Philippines, mandated by the Land Transportation Office (LTO):

1. Initial Registration: Costs range from PHP 4,000 to PHP 6,000 for new vehicles, depending on engine size and weight.
2. Renewal Fees: Annually, expect to pay PHP 2,000 to PHP 3,000 for registration renewals.
3. Emission Testing: Some provinces require emission tests, which cost around PHP 400 to PHP 500.

3. Maintenance and Repairs

Regular maintenance ensures your vehicle remains in good condition and retains its value. Maintenance costs vary depending on the car’s age, brand, and model:

1. Oil Changes: These cost around PHP 1,500 to PHP 3,000 for most vehicles and are required every 5,000 to 10,000 km.
2. Periodic Maintenance Service (PMS): Depending on the service interval, expect to spend PHP 5,000 to PHP 10,000 annually for scheduled servicing.
3. Tyre Replacement: Tyres need replacement every 3 to 5 years and cost between PHP 3,000 to PHP 8,000 per tyre for standard vehicles.
4. Unexpected Repairs: Setting aside an emergency fund for repairs (around PHP 10,000 annually) is a good practice, especially for older cars.

4. Fuel Expenses

Fuel is one of the most significant recurring costs for car owners. Understanding your vehicle’s fuel efficiency can help you estimate monthly costs:

1. Fuel Efficiency: The average car consumes 8 to 12 km/L in city driving and 12 to 16 km/L on highways.
2. Current Fuel Prices: With petrol prices averaging PHP 65 per litre and diesel around PHP 60 per litre, a daily 20 km commute could cost PHP 4,000 to PHP 6,000 monthly.
3. Alternative Options: For hybrid and electric vehicles, energy costs are lower, with charging costs averaging PHP 1,000 to PHP 2,000 monthly for EVs.

5. Parking Fees

Parking is an often-overlooked cost for car owners in urban areas:

1. Monthly Parking: Renting a parking space in Metro Manila can cost PHP 2,000 to PHP 5,000 per month.
2. Daily Parking: Pay-as-you-go parking fees range from PHP 50 to PHP 100 per day, depending on the location.

6. Roadside Assistance and Memberships

Optional but useful services include roadside assistance memberships, which can range from PHP 1,500 to PHP 3,000 annually. These services provide towing, battery jumpstarts, and emergency assistance.

7. Vehicle Depreciation

Though not an out-of-pocket expense, depreciation affects the total cost of ownership. Cars lose about 15%–25% of their value annually, impacting their resale price. For example, a PHP 1,000,000 vehicle might be worth only PHP 600,000 after three years.

Example of Total Ownership Costs

Let’s calculate the first-year ownership costs for a brand-new Toyota Vios (Base Model) in the Philippines:

How Mobee Philippines Can Help

At Mobee Philippines, we simplify the car-buying and selling process. Whether you’re looking to offset ownership costs by selling your car or need expert advice, our transparent services ensure a hassle-free experience.

🌐 Visit Mobee Philippines to learn more about our offerings and take the next step in your car ownership journey.