Honda City Hatchback - What’s the minimum salary needed / monthly repayment?

• City Hatchback launched, faces up against the Toyota Yaris
• Prices start at RM 76k, Yaris starts off at RM 71k
• Monthy repayment from RM 780/month

The much-anticipated 2022 Honda City Hatchback is finally here.

The successor the popular Honda Jazz, is offered in three variants (for now): the Grade S, E, and V priced between RM 76k (Grade S) and RM 88k (Grade V).

The range-topping City Hatchback RS e:HEV variant will only be made available in early 2022, official prices are expected to be announced closer to the delivery period. 

Also read: Launched in Malaysia, 2022 Honda City Hatchback fights Yaris, priced from RM 76k

Now that we know how much the City Hatchback costs, the main question most Malaysian buyers would be asking is, what's the minimum salary needed to comfortably apply for a loan, and how much would I be paying every month in instalments?

Also read: Saying the Civic 1.8S is a better RM 100k car than the Honda City RS e:HEV is flawed logic, here's why

How much do I need to make?

First, let’s take a look at the exacting prices of each variant, OTR without insurance, along with the minimum 10 percent downpayment for each variant. 

Of course, we'll have negate the City Hatcback RS e:HEV in our estimates for now. Elsewhere, prices are quoted OTR, excluding registration and insurance, valid until 30 June 2022 (with SST discounts). 

These prices are not too far off the City Sedan's price range of RM 74,191 (1.5 S) to RM 105,950 (RS e:HEV).

Let's examine the cheapest variant of the City Hatchback Grade S as an example.

Assuming a typical downpayment of 10 percent factoring in an interest rate of 2.7 percent (prevalent for non-national vehicles) – you are looking at a minimum monthly instalment of RM 784 per month with a 9-year loan.

Also read: Toyota Yaris is still No.1 seller, but the Honda City Hatchback has target locked on it

Based on the recommended guideline that you should not be paying more than 20 percent of your monthly salary on your car's monthly repayment, that's a minimum net salary of around RM 3,920 a month.

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

Thus, if we factor in an additional 10 percent for running costs – you are looking at approximately RM 1,176 per month to comfortably own and drive the new City Hatchback (Grade S, 9-year loan tenure).

However, if you are looking to purchase the Grade V Hatchback that comes with 6-airbags, Honda LaneWatch, auto LED headlights, and 16-inch wheels, that will set you back RM 87,860.

When calculated using the aforementioned factors, you’ll need to put aside around RM 910 per month (9-year loan tenure) for monthly repayment. In other words, you’ll need to earn a minimum net salary of RM 4,550 a month.

How much will I be paying every month?

Check out the tables below for the summary of repayment, by variant for the Honda City Hatchback for 5-, 7-, and 9-year tenures respectively. As stated, in all cases we assume an interest rate of 2.7 percent.

As always, interest rates are subject change and may include special promotional offers from time to time. Interest rates are relatively low given the current situation but do check with your dealer or respective banks for the most attractive offers.

Also, note that the current prices are exempted from SST, which is valid till 30-June 2022.

Also read: Review: 2022 Honda City Hatchback 1.5 V in Malaysia – The more traditional, non-hybrid Yaris competitor

Also read: Think the 2021 Honda City Hatchback looks weird? There’s a good reason why