Description	Cost per month	Monthly total	Cost per year	Sub total	Total	Cumulative
Initial cost
1a	Purchase a “new”  ex Japan car.					1,000,000
1b	Install car tracking system, sound and rims					80,000
Running costs
2a	Fuel of Ksh 500 per day to go to work and back	6 days a week, 4weeks a month	500*6*4 = 12,000	12,000* 12 =	144,000
2b	Parking fees at Ksh 300 per day	6 days a week, 4weeks a month	300*6*4 = 7200	7200 * 12 =	86,400
2c	Service	5,000		5000 * 12 =	60,000
2d	Replace 2 tyres per year at Ksh 10,000 per tyre			10,000 * 2 =	20,000
2e	Insurance at 7.5% of the value of the car				75,000
2f	Wear and tear 10% of the value of the car				100,000
	Sub total					485,400
	Total cost in year 1					1,565,400
	Year 2					485,400	2,050,800
	Year 3					485,400	2,536,200
	Year 4					485,400	3,021,600
	Year 5					485,400	3,507,000
	Year 6					485,400	3,992,400
	Year 7					485,400	4,477,800

Assumptions

1. The car is not a fuel guzzler.
2. You live 15km from your place of work.
3. You are a safe driver thus you are not having to repair other peoples cars.
4. You strictly obey all traffic rules even the 50KM / hr rule thus you are not fined.
5. For the subsequent years, let’s assume the running costs remain the same.
6. We have worked with 6 days a week, assuming that you don’t use the car on Sundays and or that there is normally some fuel left at the end of the week to take you wherever you want to go on Sunday.
7. We have assumed that you did not borrow from a bank to buy the car.
8. We have assumed that you are not given a car maintenance or miliage allowance.
9. Other costs that might be missing have been included in the 10% depreciation.

 

Summary.

• At the end of the 7 years, the value of your car has really depreciated to maybe 30 – 40 % of its initial value.
• The car needs a change of many parts or maybe even an over whole.
• You are still living in a rented house.
• You are thinking of buying a bigger car to fit your new position at work.

Conclusion:

If this math holds true, in 7 years, you have just forfeited owning a 2 bedroom master en suite apartment off Mombasa road or in Ruaka which average Kshs 4.5 Million or buying a plot of land and building a house to shelter “your people”.

#fanyahesabu

Kariùki Wawerù