The Wong family consists of two working parents and two school-going children living in an HDB flat.
Their current 10-year-old petrol car has reached the end of its Certificate of Entitlement (COE). The COE needs to be renewed based on the latest prices if they wish to extend the use of their current car.
Mr Wong is considering the two following options:
Option A: Renew the COE of their existing petrol car for 10 years. No other upfront cost for this option.
Option B: Buy a brand-new Electric Vehicle (EV), the BYD Atto 3.
The fuel/energy consumption costs of his current car and the EV he is considering are given in the table below.
| Current Petrol Car | EV (BYD Atto 3) |
|---|
| Capacity (Petrol Car) / Max Power (EV) | \(1800\text{ cc}\) | \(100\text{ kW}\) |
| Energy Consumption Rate | \(12\) km per litre | \(16\) kWh per \(100\) km |
| Energy Unit Cost | \(\$3.00\) per litre of petrol | \(\$0.65\) per kWh of charging |
Calculate the total annual cost of petrol for his current car and the total annual charging cost for the EV, assuming that the family drives \(15000\) km a year.
Petrol cost[1]
EV charging cost[1]
In addition to the two options indicated above, Mr Wong’s cousin recommends him to consider a third option as given below.
Option C: Switch entirely to a mixture of public transport (bus and train) and limited Grab rides per week.
Public Transport (MRT & Bus): The family will take a combined total of \(40\) standard trips per week. The average cost per trip is \(\$1.70\).
Grab / Ride-Hailing: The family estimates taking a total of \(10\) Grab trips per week.
Assume there are exactly 52 weeks per year.
Taking into account the relevant information given above, calculate the family’s total transport cost if they adopt Option C over a full 10-year period.[2]
Mr Wong has put aside a family transport budget of \(\$200000\) for the next 10 years if he continues to maintain his petrol car or change to a new car.
Taking into account the inconvenience of giving up driving if he chooses to, he is willing to consider Option C (public transport option) only if the total transport cost is less than \(70\%\) of his allocated budget for use of a car.
Evaluate each of Options A, B and C defined above to determine the option(s) which are financially feasible for Mr Wong, given his budget of \(\$200000\) and his condition regarding Option C. You must show full calculations for each option.[5]
| Latest COE Prices |
| Category A | Cars \(\leq1600\) cc or \(\leq110\) kW | \(\$121847\) |
| Category B | Cars \(>1600\) cc or \(>110\) kW | \(\$121502\) |
| Category C | Goods Vehicles & Buses | \(\$93001\) |
| Category D | Motorcycles | \(\$9989\) |
| Option A: Renew COE (Petrol) | Option B: Buy new EV (BYD Atto 3) |
|---|
| Upfront cost | COE Renewal Only | Price of car \(\$61000\) (COE to be bought separately) |
| Annual Road Tax & Insurance | \(\$2200\) | \(\$1500\) |
| Annual Maintenance and Inspection | \(\$1800\) | \(\$600\) |
State one non-financial disadvantage for one of the feasible option(s) you have identified.[1]