Can you afford a car in malaysia with the minimum wage of RM1700?
Can you afford a car on Malaysia’s RM1,700 minimum wage?
Yes, it may be possible to finance a car on RM1,700, but the real challenge is covering the full monthly ownership cost, not just the loan instalment.
Malaysia’s RM1,700 minimum wage sounds like enough for a low monthly car payment, but the numbers change quickly once fuel, insurance, road tax, maintenance and repairs are included.
A recent Carz Automedia calculation puts estimated take-home pay at RM1,501.45 after EPF, SOCSO and EIS deductions for an employee below 60 earning RM1,700 basic salary.
So, what does a car actually cost on that income?
Key takeaways
- RM1,700 gross salary: The example leaves approximately RM1,501.45 take-home pay after EPF, SOCSO and EIS.
- Perodua Axia E: A RM22,000 manual car was estimated at about RM541 per month including financing and running-cost reserves.
- Perodua Axia G: The RM33,900 automatic Axia was estimated at about RM680 per month, or roughly 45% of the example take-home pay.
- Used cars: A used car can reduce the purchase price, but older vehicles need a larger repair and maintenance buffer.
- Before buying: Saving RM500–RM600 per month for six to 12 months can help test whether your budget can realistically handle car ownership.
What does RM1,700 salary really mean for your car budget?
The RM1,700 figure is gross salary, not the amount available to spend. Malaysia’s current minimum wage is RM1,700 per month, with full implementation for all employers taking effect on 1 August 2025. The minimum wage refers to basic wages rather than allowances or additional payments.
An employee below 60 earning RM1,700 without overtime or allowances has the following estimated monthly deductions:
| Item | Monthly amount |
|---|---|
| Gross salary | RM1,700.00 |
| EPF | ~RM187.00 |
| SOCSO | ~RM8.25 |
| EIS | ~RM3.30 |
| Estimted take-home pay | RM1,501.45 |
That RM1,501.45 is the useful starting point for affordability calculations. Your actual disposable income can be very different depending on rent, food, family commitments, loans and other expenses.
Why a RM250 car instalment can be misleading
The instalment is only one part of owning a car. Fuel, insurance, road tax, servicing, tyres, batteries and unexpected repairs continue after the bank payment has been made.
For its calculation, Carz assumed approximately 1,000 km of driving per month, with RON95 fuel calculated at RM1.99 per litre under BUDI95 for an eligible Malaysian. Parking and tolls were excluded because they vary significantly between drivers.
A useful ownership equation is:
Monthly car cost = instalment + fuel + insurance/road tax + maintenance + wear-and-repair reserve
That is the number to compare against your take-home pay—not the advertised instalment alone.
Perodua Axia E: the RM22,000 option
The Axia E is priced at RM22,000 before insurance in the source calculation. It is based on the previous-generation Axia platform and comes exclusively with a five-speed manual transmission.
Using a 10% down payment of RM2,200, RM19,800 financed over nine years at an illustrative 3.5% flat interest rate produces an estimated instalment of approximately RM241 per month.
But the estimated monthly ownership budget is higher:
| Axia E cost | Estimated monthly amount |
|---|---|
| Instalment | ~RM241 |
| Fuel | ~RM100 |
| Insurance + road tax reserve | ~RM80 |
| Maintenance reserve | ~RM70 |
| Tyres/battery/wear reserve | ~RM50 |
| Estimated total | ~RM541 |
At approximately RM541 per month, the Axia E represents about 36% of the RM1,501.45 example take-home pay—before parking and tolls.
What about an automatic Axia?
Going automatic increases the upfront price and estimated monthly commitment. Following Perodua's August 2026 price revision referenced by Carz, the Axia 1.0 G D-CVT is priced at RM33,900 before insurance.
Using the same 10% down payment, nine-year tenure and illustrative 3.5% flat interest rate, the estimated instalment is around RM360 per month.
Add the other ownership costs and the estimate becomes:
Axia G costEstimated monthly amount
| Axia G cost | Estimated monthly amount |
|---|---|
| Instalment | ~RM360 |
| Fuel | ~RM100 |
| Insurance + road tax reserve | ~RM100 |
| Maintenance reserve | ~RM70 |
| Tyres/battery/wear reserve | ~RM50 |
| Estimated total | ~RM680 |
That is approximately 45% of the RM1,501.45 example take-home pay, before parking and tolls.
Important: These are budgeting estimates, not guaranteed financing quotations or actual ownership costs. Interest rates, insurance premiums, fuel consumption and maintenance expenses can vary.
Could a used car make more sense?
A lower purchase price does not automatically mean lower ownership costs. A used car may reduce your instalment, but an older vehicle can require more money for servicing, tyres, suspension, batteries and unexpected repairs.
During our research, we found a 2018 Proton Saga 1.3 Executive automatic advertised at RM13,800, with an illustrative financing calculation of approximately RM246 per month over five years.
Its estimated monthly ownership budget was:
| Used Saga cost | Estimated montly amount |
|---|---|
| Instalment | ~RM250 |
| Fuel | ~RM120 |
| Insurance + road tax reserve | ~RM70 |
| Routine maintenance | ~RM80 |
| Repair/wear reserve | ~RM100 |
| Estimated total | ~RM620 |
That still works out to approximately 41% of RM1,501.45 take-home pay.
The lesson is straightforward: look at the car's condition and expected repair costs, not just its advertised price.
New Axia E vs Axia G vs used Saga
| Axia E | Axia G | Used Saga | |
|---|---|---|---|
| Example purchase price | RM22,000 | RM33,900 | ~RM13,800 |
| Transmission | 5MT | D-CVT | Automatic |
| Estimated instalment | ~RM241 | ~RM360 | ~RM250 |
| Fuel/month | ~RM100 | ~RM100 | ~RM120 |
| Insurance + road tax reserve | ~RM80 | ~RM100 | ~RM70 |
| Maintenance/repair reserves | ~RM120 | ~RM120 | ~RM180 |
| Estimated total/month | ~RM541 |
~RM680 |
~RM620 |
| Share of RM1501.45 take-home | ~36% | ~45% | ~41% |
*Figures are illustrative estimates from the source article, not quotations. Used-car asking prices and financing terms can change. *
A used Axia could be another option
For drivers who need an automatic but cannot comfortably stretch to a new Axia G, a used Axia can reduce the purchase price. We found an example of a 2016 Axia G automatic advertised at RM14,700 during our research.
However, the lower price should not be the only consideration. Check the vehicle's service history, accident history, mileage and mechanical condition before committing.
Motorist App and AutoConcierge can also be useful when researching ownership decisions, particularly when you need help navigating the practical side of buying, selling and managing a vehicle.
Expert tip: test the car payment before taking the loan
Save RM500–RM600 every month for six to 12 months before buying.
If you can consistently save RM500 per month, you would accumulate:
- RM3,000 after six months
- RM6,000 after 12 months
At RM600 per month, that becomes:
- RM3,600 after six months
- RM7,200 after 12 months
This gives you two useful pieces of information: whether your existing budget can absorb a car-related commitment and how much cash you can build before purchasing.
Common mistake: spending all your savings on the down payment
Don't empty your savings just to make the monthly instalment smaller.
A used car, in particular, may need immediate servicing, tyres, a battery or repairs after purchase. Keeping an emergency and repair buffer can prevent an unexpected breakdown from turning into new debt.
A simple approach is to separate your savings into two pots:
- Down payment and initial car expenses
- Emergency and repair buffer
Old way vs Motorist App: checking your car's value
If you already own a car and are considering selling it to reduce your financial commitments, knowing its current value can help you understand how much equity you have before making another purchase.
| Valuation step | Old way | Motorist App |
|---|---|---|
| Initial enquiries | Contact dealers individually | Submit vehicle details once |
| Offers | Potentially one dealer at a time | Offers from a network of certified dealers |
| Typical turnaround | Depends on the dealer | Within 24 hours |
| Valuation cost | Varies | RM0 |
| Obligation to sell | Depends on the arrangement | No obligation |
| Next step | Arrange discussions yourself | Non-obligatory viewing if satisfied |
Motorist says its valuation process considers factors including the vehicle's brand, model, registration date, mileage, accident history and faulty parts. Its platform obtains offers through an in-house bidding system and relays the highest offer to the owner.
For a motorist on a tight budget, knowing your existing car's current market value can provide another concrete figure when calculating your next move.
So, can you afford a car on RM1,700?
The answer depends on your entire household budget, not simply whether a bank will approve a loan. Estimated monthly ownership costs range from approximately RM541 for an Axia E to RM680 for an Axia G, before parking and tolls.
If you genuinely need a car, building savings first and keeping a repair buffer can make the commitment easier to assess. If you already own a vehicle, checking its current market value can also help you understand your financial position before changing cars.
People Also Ask
Can I buy a car with a RM1,700 salary?
You may qualify depending on your income, credit profile, down payment and existing commitments, but loan eligibility does not necessarily mean the total ownership cost will fit comfortably within your budget.
What is the cheapest new car in Malaysia?
The source article identifies the Perodua Axia E at RM22,000 before insurance as the cheapest new-car option considered in its calculation. It comes with a five-speed manual transmission.
How much take-home pay do you get from RM1,700?
In the source's example for an employee below 60, RM1,700 gross salary becomes approximately RM1,501.45 after EPF, SOCSO and EIS deductions.
How much does an Axia E cost per month?
The illustrative budget estimates an Axia E at approximately RM541 per month, including an estimated loan instalment, fuel, insurance and road tax, maintenance and wear reserves.
How much does an Axia G cost per month?
The illustrative calculation puts the Axia G at approximately RM680 per month, excluding parking and tolls.
Is a used car cheaper than a new car in Malaysia?
A used car can have a lower purchase price and loan instalment, but older vehicles can require more spending on maintenance and repairs. The vehicle's condition and service history are therefore important.
Should I buy an old car with cash?
Paying cash removes the monthly loan instalment, but using most or all of your savings can leave you without an emergency or repair fund. The purchase should be considered alongside the cash buffer you will have left afterwards.
How much should I save before buying a car?
There is no single amount that suits every buyer, but the source suggests testing the commitment by saving RM500–RM600 per month for six to 12 months before taking on car ownership.
What costs should I include when budgeting for a car?
Include the instalment, fuel, insurance, road tax, routine servicing, tyres, battery and a reserve for unexpected repairs. Parking and tolls should also be added based on your actual commute.
How can I check my car's value in Malaysia?
Motorist provides a free car valuation using vehicle details and offers from its network of dealers and direct buyers, with valuations typically provided within 24 hours.
Check your car's value before making your next move
Motorist Valuation gives Malaysian car owners a free way to check their vehicle's current market value and receive offers through Motorist's network. The valuation is free and comes with no obligation to sell.
Download the Motorist App to keep vehicle reminders, information and Personal AutoConcierge assistance in one place.
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