It has been years since we can renew our driving license at any branch of Pos Malaysia that has the JPJ system. Only since late last year driving license renewal date has been synchronized to our birthday, for ease of remembering when to renew it (but it may be still difficult to memorize the year though).
My 5 years license is expiring soon (early Feb). I made an effort to go to the Pos office @ Ikano to renew it. I was lucky that there weren’t many people at the queue, and got it done in less than 5 minutes. I wanted to renew it for another five years and given that my expiry and renewal is more than six months, I was initially delighted that I actually “gained” from renewing it. However, I found out from the officer, for those with birthday more than six months from the day of expiry, there will be an additional RM 15.
Including the service charge of RM 2, I paid RM 167 for five years. Well, first of all, paying for five years ease the stress (and hassle) of going to the post office every year. Second, it saves up yearly service charge of RM 2 (we think).
Furthermore, I guess there is really savings if the value of what we pay for yearly renewal is calculated based on present value.
Here, calculation is made based on the assumption that the price tag to the yearly renewal remains unchanged
If I were to pay RM 32 (RM 30 +RM 2) next year, at an inflation rate of 3.5%, the amount is actually worth RM 30.92 today, at an inflation of 3.5%.
Year 2: RM 29.87
Year 3: RM 28.86
Year 4: RM 27.89
Adding up those figures plus the RM 47 paid today (RM 45 + RM 2), it sums up to RM 164.54. This amount is compared to the amount paid today for five years renewal, which is RM 167. So, there is a dis-saving of RM 2.46. This excludes the value of parking and petrol that you will need to pay yearly to visit the post office.
From the surface, one would think that they could save RM 2 each year for renewing at the post office. However, the problem is we have not take into account inflation. If you do so, you actually lose out to inflation but you may gain on the cost of travelling.
Therefore, paying a lump sum for a longer period or renewing annually, bi-annually or three-yearly remains a choice. And, of course, it depends on the cash availability.