2020 Proton X50, what’s the minimum salary to get a loan?

Eric · Oct 27, 2020 12:26 AM

The highly-anticipated 2020 Proton X50 is finally here, after several preview sessions held across the country.

With prices starting from RM 79,200 for the Proton X50 1.5T Standard, it sure does look like a tempting deal, but is your salary enough to sign that loan?

Let’s find out more in this article.

How much do I need to make?

Starting things off is the entry-level Proton X50 1.5T Standard (RM 79,200, on the road, without insurance), the monthly repayment is roughly RM 800 a month, given a 2.27 percent interest rate with a 9-year loan.

As such, following the recommended guideline that you should not be paying more than 20 percent of your monthly salary for your car’s repayment, you’ll need to bring home a net salary of at least RM 4,000 a month.

With the cost of insurance, maintenance, tyres, and other associated running costs factored in, your car-related expenses should not exceed 30 percent of your monthly salary.

However, if you want the top-of-the-line Proton X50 TGDI Flagship (RM 103,300, on the road, without insurance), you’ll need to cough out roughly RM 1,040 every month for the monthly repayment, meaning that you’ll need to have a minimum net salary of RM 5,200 a month.

With that said, interest rates are always changing. Given our current situation, interest rates are very low, but you will still need to check with your respective banks for the latest rates. On top of that, the prices we quoted here are only valid until 31-December 2020, as it includes the Government’s Penjana sales tax exemption incentive.

Whether or not is the base X50 1.5T Standard worth your hard-earned Ringgit is up to you, as it lacks curtain airbags and the 6-speaker sound system - both of which are fitted to upper variants of the X50. We reckon it might be a better idea to step up to the X50 1.5T Executive variant (RM 84,800) or the larger Proton X70 1.8 Standard (RM 89,900).

Don't take the 9-year loan option

It doesn’t take a financial specialist to tell you this: Don’t take the 9-year loan option.

It’s a wiser choice to opt for the shorter 5-year loan tenure instead.

Granted, with the shorter 5-year loan tenure, you’ll need to fork out roughly RM 1,300 each month for the base X50 1.5T Standard, up to RM 1,700 for the range-topping 1.5 TGDI flagship variant.

By opting for the 9-year loan option, you’ll be forking out roughly RM 14,500 in interest alone if you went for the base X50 1.5T Standard, compared to RM 8,100 if you went for the shorter 5-year loan option.

The problem with 9-year loans is that the tenure is so long, the value of your car is depreciating faster than your ability to pay off the loan.

You could also end up in a situation where if for whatever reason, you are forced to sell the car or claim total loss from your insurance, you will have to top up more money before you can settle your loan because the outstanding balance is more than your car's market value.

So keep that in mind before signing for a 9-year loan.