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Should I Buy a Home or a Car First?

Here are some fundamental points for consideration before making the all-important decision.

In life, we go through many milestones, and few are as liberating as entering the workforce. For many, it is a rite of passage that brings with it greater independence, with increased ability to stand on one’s own feet. A regular income also brings with it increased spending power. But with the current economic landscape, spending decisions have to be made very wisely, especially when considering the purchase of big-ticket items, such as a home or a

While there is no right or wrong answer, there are several factors that need to be considered prior to making this very important decision.

Purchasing a home

It is said, “home is the starting place of love, hope and dreams”. Indeed, the purchase of one’s first home is a major decision that can have a significant impact on one’s life. Buying the right home early can undoubtedly prove to be a great life investment as its value would typically appreciate over time, garnering good capital returns.

Nevertheless, buying a home would involve a much higher investment as it includes a down payment and payments for monthly loan instalments (for a tenure up to 35 years) which incur interest. On top of that, there are other costs that are not always considered when purchasing a home such as stamp duties, maintenance, repair, and assessment taxes.

Another important decision to consider is whether to purchase a landed property or a strata (high-rise) property such as an apartment or condominium unit.

A landed property would typically cost more than a strata property, but generally have more living space and a higher appreciation and resale value than a strata property. Strata homes, on the other hand, are generally more affordable for younger homebuyers with the convenience of shared amenities, with better rental yield. However, they are usually smaller and therefore more restricted. Most units would incur regular management fees, which go towards the maintenance of common and shared areas and amenities within the property.

Another alternative to buying a home is renting, which brings its own pros and cons. Renting property involves lower initial costs and paperwork, more flexibility while incurring little to no maintenance-related costs, which is borne by the owner. All these make it an ideal and alluring option for many. On the flip side, renters would have to face a potential increase in monthly rentals. Moreover, the homeowner may choose to sell the property, which may require the tenant to move out, if the new other chooses not to continue renting out the home. Renters also do not receive any tax benefits or equity on their homes, which homeowners enjoy.

However, whether buying or renting, it is a very good (and prudent) practice to protect your home, in the event of unfortunate circumstances. Many insurance companies offer both homeowners and renters solutions, with the added peace of mind of knowing that their assets and personal effects are protected at all times.

For instance, Liberty Insurance’s Houseowner insurance policy protects homeowners against a host of perils, including natural disasters, sudden impacts and accidents, that may cause damage to the home’s structure. Meanwhile, with Liberty Insurance’s Householder insurance, policyholders (including renters) can protect every aspect of their home against natural perils, sudden disasters, and any unforeseen circumstance that may arise over time, including loss or damage to residence contents due to fire or theft.

Purchasing a car

Buying a car involves a considerably lower overall investment than buying a home.

However, car owners will have to factor in other maintenance costs such as service and repairs, petrol, parking, toll charges, road tax and faster depreciation, amongst others.

Car buyers also have the option of whether to buy a brand-new car or a second-hand car.

Both have their own sets of pros and cons. A second-hand car may cost less than a brand new one, but maybe less reliable, involving higher maintenance costs. In this regard, those looking to purchase a car, be it new or second-hand, should also consider its quality and long-term prospects. A good and well looked after car will also generally have better resale value.

Currently, those in the market for a brand-new car can benefit from government incentives such as the waiving of Sales and Service Tax (SST) for vehicle purchases until the end of 2021. Many car dealers and manufacturers also offer new owners added benefits and savings such as additional rebates and free periodic servicing up to a certain amount of time.

The vehicle market in Malaysia has shown encouraging signs in recent times, which bodes well for those in the market for a new car. With plants and showrooms allowed to resume operations in mid-August, new car sales in Malaysia have picked up significantly. Data from the Malaysian Automotive Association (MAA) showed 44,275 vehicles delivered in September 2021, marking a 153% increase in sales from the month before it.

Meanwhile, positive signs are also seen in the used car market, with increased sales brought about in part by evolving consumer preferences, incentives by the government, and the increased buying and selling of used cars via online platforms.

Whether buying a new or used vehicle, owners should pay careful attention to motor insurance coverage, which is compulsory in Malaysia. Considering a driver usually spends an average of nine hours a week on the road, having a good and reliable insurance policy is an essential part of car ownership. Liberty Insurance’s EZY Plus Comprehensive policy offers car owners total assurance with guaranteed protection and comprehensive coverage.

Besides protection against bodily injury, disability and death, the policy also protects owners against third party costs, fire and theft. Furthermore, policyholders will also be covered for flood and side mirror damages, along with 24 hours of towing assistance for breakdowns and accidents, and a warranty for workmanship repairs.

Driving it home

Ultimately, the choice to buy a home or a car is a highly personal one, based on individual need, desired lifestyle and personal preference. No matter what the decision, it is very important to live within one’s own means. To make the best possible decision, it would help to spend substantial time to conduct personal research and weigh options based on need, affordability and preference. And once you do have your prized possession – don’t forget to protect your hard-earned investment!

For more information on Liberty Insurance’s offerings for house and car owners, visit

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