Getting a 2021 Toyota Vios? Here's the minimum salary required for a loan

UMW Toyota Motor has just released the official prices for the 2021 Toyota Vios facelift and the prices are nothing short of appealing. Starting from RM 74,623 for the base Vios 1.5 J, it is only RM 430 more than the base Honda City 1.5 S.

As appealing as the prices are for the Vios facelift, you might be wondering what's the minimum salary needed in order to apply for a loan. Well, you've come to the right place as we will show you how much is the minimum monthly salary required to purchase the Vios.

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 74,623 (on the road, without insurance), you could be looking at a monthly repayment of around RM 750, 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 3,750 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 87,584.

Calculated from the aforementioned factors, you’ll need to put aside around RM 880 a month for the monthly repayment. In other words, you’ll need to have a minimum net salary of RM 4,400 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%

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 1,250 (Vios 1.5 J) to RM 1,460 (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 13,700 to RM 16,100 in interests alone. Meanwhile, getting the shorter 5-year loan means you’re only paying between RM 7,600 to RM 8,900 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.