Daniel started work on 1 January 2021 with a monthly salary of \$4300.
His salary increases by 3% annually.
Daniel has savings of \$100 000.
With his savings and monthly income, he intends to buy a car in January 2026.
Daniel wishes to maintain savings equivalent to at least 5 months of his current monthly salary after purchasing the car.
Daniel is deciding between buying a 1598cc petrol car or a 208kWh electric car.
The table below is used to calculate the cost price of the car:
| Car Type | 1598cc petrol car | 208kW electric car | |
|---|---|---|---|
| a. | Base cost | \$120 000 | \$130 000 |
| b. | COE | Refer to Table (COE Prices) | Refer to Table (COE Prices) |
| c. | Rebates | Not Applicable | \$30 000 |
Total cost price of car \(=a+b-c\).
A Certificate of Entitlement (COE) in Singapore represents the right to vehicle ownership in Singapore for a period of 10 years. Every car owner in Singapore must purchase a COE for the car. The COE prices for the year 2025 can be seen below.
| Category A (Cars up to 1600 cc or 110kW) | Category B (Cars above 1600 cc or 110kW) |
| Category C (Goods vehicle and bus) | Category D (Motorcycle) |
| Category E (Open) |
Daniel intends to make a down payment using his savings and take a bank loan for the remaining amount.
He wishes to borrow the maximum amount possible. The loan amount can be calculated using the information below.
| Car Type | 1598cc petrol car | 208kW electric car |
|---|---|---|
| Maximum loan amount | 70% of cost price of car | 60% of cost price of car |
| Maximum loan period | 7 years | 7 years |
| Interest Rate (simple interest) | 2.48% per annum | 2.48% per annum |
Assume that the COE price in January 2026 will not exceed the maximum COE price recorded in 2025.
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