[Saving Tips for Car Owners] Guide to running a car in Hong Kong 2020

【車主慳錢貼士】2020年香港養車費用全攻略

In Hong Kong, despite the great convenience public transport has brought to our lives, owning a car as an alternative means of transportation is notwithstanding an irreplaceable experience when it comes to superiority, comfort and convenience. Nevertheless, a number of car junkies have stepped back from becoming a “car owner” as a result of the immense cost for running a car such as parking rate, insurance, fuel, and license fee in addition to the budget for buying a car.

Many car owners look for ways to reduce the cost of running a car in Hong Kong. To do so, you must first understand the different types of expense. In today’s special lecture of Kwiksure, our experts will discuss the most common expenses for running a car and suggest ways to help car owners to reduce cost.

Car Park Charges

Due to the shortage of land and trend of speculation in Hong Kong, car park charges are by no means cheap. The hourly parking rate in an HA’s estate is around HK$13 to HK$17, while that from Link REIT is more than HK$17. The hourly parking rate in large shopping malls ranges from HK$20 to HK$25. In popular areas such as Causeway Bay or Tsim Sha Tsui, the hourly parking rate generally exceeds HK$30. When parking on holidays, the hourly parking rate of some shopping malls can be as high as HK$70.

Notwithstanding, the monthly rate is not as affordable as you think. The monthly rate of an HA’s car park is marked by the occupancy rate and district area, which also increase annually. As shown in the data provided by HA, the current monthly car park charge is up to HK$3,000 for covered spaces with 90% or above occupancy rates in Hong Kong and Kowloon. Comparable spaces in Tuen Mun, Yuen Long, Tin Shui Wai, Tung Chung and Islands are relatively cheaper, with a rate of HK$1,640.

Monthly car park charges under Link REIT and private housing estates in different districts can vary greatly. Monthly rents in Hong Kong Island and Kowloon are more expensive than that in the New Territories. The majority of car parks in large housing estates with insufficient parking spaces charge between HK$3,000 and HK$3,800.

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Car Insurance

According to the laws of Hong Kong, third-party insurance must be provided for all vehicles using the roads by the driver, where offenders can be fined HK$10,000 and imprisoned for 12 months. Although third-party insurance is cheaper than comprehensive insurance, it offers less coverage for your vehicle, which only protects the rights and interests of third parties instead of providing protection for the insured driver and the vehicle itself.

The premium of car insurance is affected by a basket of factors ranging from the market value, performance, driver's driving record, driving experience, age, occupation, compensation record and traffic violation record of the vehicle. Whether the driver itself has NCD or whether the insurance has deductibles and excess will also affect the premium. For more information, you can refer to ‘car insurance expense: how the insurance company calculates your premium?’ and ‘7 ways to save money on car insurance in Hong Kong’.

Fuel Expense

Hong Kong is one of the most expensive cities in the world for fuel. Although fuel prices have plummeted recently, Hong Kong's fuel price has not changed significantly. At the time of writing this article (May 7th, 2020), the fuel price per litre was HK$13.40.

If you would like to save money on petrol, one of the ways is to drive a car with low fuel consumption such as diesel / electric / hybrid vehicle, but the price of these kinds of vehicle is slightly higher than the petrol counterparts. Before buying the vehicle, it is recommended to determine whether you can cover the cost, i.e. whether you will drive this car for a period of time so that the fuel savings can compensate for the difference in the price of the vehicle.

In addition, driving habit is another factor affecting fuel consumption. If a driver frequently goes speeding, rides the brakes, or keeps the air conditioner on, more fuel will be consumed. Therefore, it is more fuel-efficient to drive on unobstructed highways than in urban areas where drivers always need to stop by the traffic lights.

Vehicle Depreciation and Repair

As the vehicle gets older, especially for second-hand cars, problems may arise easily and the repair fee usually goes higher.

In addition to the repair fee in the event of an unexpected breakdown, a vehicle generally requires inspections every 6 months or about 5,000 km (whichever comes earlier) and replacement of consumables such as fuel, fuel filter, air filter, and air-conditioning filter. Subject to the vehicle brand and model, the garage fee is generally HK$1,500 to HK$2,000; new vehicles usually have purchased the official warranty, and the average fee is HK$3,000 to HK$6,000 per time.

The government also implements compulsory annual vehicle examination for private cars aged six years or above. The license can only be renewed upon passing the examination. The vehicle examination fee by the government is HK$585, whereas most of the garages in the market offer from HK$2,500 to HK$4,000 with one-stop service for basic repair and examination handling subject to the vehicle model, engine capacity and examination scope.

Vehicle maintenance costs thousands of dollars every year. If you want to save money by postponing or even skipping examination and maintenance, the lifespan of the parts may be shortened, triggering problems of important parts such as engines and gearboxes and even pose a danger to safe driving. Therefore, it would be better to save a little more in other aspects rather than on maintenance and repair. After all, the game is not worth the candle.

License Fee

Under the requirements of the existing legislation in Hong Kong, drivers of all vehicles using the roads must pay for the license fee with an option for yearly payment or once every four months. But if you opt for the latter, the total cost will be higher. As a result, the driver who is sure to continue using the vehicle usually chooses to renew the license yearly to save more.

The license fee of a private car depends on the use of petrol or light diesel and the size of the engine capacity. The larger the capacity, the higher the cost and vice versa. Whereas the license fee for electric vehicles is determined by the vehicle's net weight.

For petrol vehicles, the annual registration fee ranges from HK$3,929 to HK$11,329, and the 4-month registration fee ranges from HK$1,404 to HK$3,994.

For light diesel vehicles, the annual registration fee ranges from HK$5,389 to HK$12,789 and the 4-month registration fee ranges from HK$1,915 to HK$4,505.

To know more about license fees, you can take a look at ‘A guide to registering and licensing vehicles in Hong Kong’ or click here for more information from the Transport Department.

Contact Kwiksure to Compare Insurance Policies

In conclusion, the cost of running a car in Hong Kong is undoubtedly high, but as long as you know how to save money, you can still save a lot in some aspects such as vehicle insurance.  In addition to the above tips, the most important thing is to find an experienced and reliable vehicle broker to advise you on a plan that meets your requirements and budget.

Contact us now for free quotation!

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