2021 Toyota Vios - What’s the minimum salary to get a loan?

CY Foong · Nov 19, 2020 10:00 AM

Now that Toyota has just announced that bookings are open for the new 2021 Toyota Vios facelift, the B-segment sedan market competition is heating up with the all-new Honda City and vastly improved all-new Nissan Almera launched not so long ago.

UMW Toyota has yet to announce the official prices and we were only given estimated prices for the Toyota Vios facelift. The estimated prices are slightly higher – ranging from RM 1,000 to RM 3,100 depending on the variant.

If you’re interested in getting one, we’ll show you how much you need to make each month before applying for a loan to purchase the Toyota Vios facelift.

How much do I need to make?

Let's take the cheapest variant of the Vios, the 1.5 J, as an example. Starting from RM 75,701 (on the road, without insurance), you could be looking at a monthly repayment of around RM 760, factoring in a 2.27% interest rate with a 9-year loan.

Based on the recommended guideline that you should not be paying more than 20% of your monthly salary on the car's monthly repayment, that's a minimum net salary of around RM 3,800 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.

But if you want the top-of-the-range Vios 1.5 G that comes with all the bells and whistles including the Toyota Safety Sense (TSS) ADAS suite, Android Auto and Apple CarPlay support, and a 3D 360-degree camera, that will cost you RM 89,232.

Calculated from the aforementioned factors, you’ll need to put aside around RM 900 a month for the monthly repayment. In other words, you’ll need to have a minimum net salary of RM 4,450 a month.

Below are the monthly installments for the 2021 Toyota Vios facelift for 5-, 7-, and 9-year tenures. These rates have already factor in an interest rate of 2.27%

5-year monthly installment
Variant Price (RM) Monthly payment (RM)
1.5 J  75,701 1,260
1.5 E  85,674 1,430
1.5 G  89,232 1,490
7-year monthly installment
Variant Price (RM) Monthly payment (RM)
1.5 J 75,701 940
1.5 E 85,674 1,060
1.5 G 89,232 1,110
9-year monthly installment
Variant Price (RM) Monthly payment (RM)
1.5 J 75,701 760
1.5 E 85,674 860
1.5 G 89,232 900

That being said, interest rates are always changing. Given our current situation, interest rates are very low but do check with your respective banks for the latest rates.

Plus, the prices quoted here are exempted from SST which are only valid until 31-December 2020.

Don’t take the 9-year loan option

It’s definitely worth repeating here that we don’t recommend taking the 9-year loan option.

The shorter 5-year loan tenure is a wiser choice.

Sure, you would be paying a bit more than the 9-year tenure with a monthly repayment that ranges from RM 1,260 (Vios 1.5 J) to RM 1,490 (Vios 1.5 G), but there are benefits to this.

To put it simply, 9-year loans aren’t recommended because of the higher interests. Opt for a 9-year tenure and you’re paying between RM 13,900 to RM 16,400 in interests alone. Meanwhile, getting the shorter 5-year loan means you’re only paying between RM 7,700 to RM 9,100 in interests – considerably less than the 9-year tenure.

The next issue with 9-year loans is that since the tenure is so long, the value of your car is depreciating faster than your ability to pay off the loan. Yes, even the king of resale value won’t save you from this.

There’s also the unfortunate situation where you could be forced to sell the car or claim total loss from your insurance. You would have to top up more money before you can settle the loan because the outstanding balance is more than your car’s market value.

Do keep this in mind before agreeing on a 9-year loan.