Things You Should Know Before Buying A Car

Things You Should Know Before Buying A Car
August 17, 2020 hcfjack

If you’re a first-time car buyer, here are some tips to help you stop turning the thrill of buying into regret for ownership. A car is a message to some Singaporeans that they did it, which we think is crazy. Getting financial freedom is much easier, rather than buying a symbol of it. It’s like paying for a jewelry box so much, you can’t afford to put a ring in it. Here’s why you should think again about your decision to purchase a car.

Owning a car is a heavy economic undertaking, especially in Singapore where cars cost several times the annual salary of the average person. That’s why it’s important you remember everything

Factors wisely to stop making a wrong or impulsive decision, just to end up resenting your costly purchase.

If you’re a first-time car buyer, it’s worth remembering these common mistakes people frequently make, so you’ll appreciate the experience of ownership more down the road.

Finding a lifestyle fit

Although coupes and convertibles boost your sex factor, don’t let your heart overpower your brain, especially if it’s your only vehicle. It’s important to pick a car, like the first point, that fits your needs and lifestyle. Sure, a two-door convertible might be a big boost to your ego, but think about the trouble of ferrying around your elderly parents or the trouble of installing a child seat at the rear.

Take a list of the requirements or upgrades your car will have to help you make a more informed decision. This list can also be helpful in budgeting, as it will allow you to decide how much money you will be able to spend on these mods and requirements.

If you’re a parent, it’s crucial to make sure the car you ‘re buying can comfortably and safely accommodate your kids. Younger kids will need to ride in child seats so carry one while you’re in the showroom to check whether the car you ‘re buying is child seat-friendly.

Car affordability

First time vehicle owners are frequently tempted to splurge on their first ride. You should think sensibly as temptingly as it may seem, and hold off the vision of driving a luxury car. As the proverb goes, living within your means is necessary. Do not make the mistake of buying a car which you would not be able to sustain.

Note, a car should be viewed as an asset that makes your life simpler and not a product that financially holds you down. You should also consider the other extra costs and fees of owning a car, in addition to the above points. With time, these extra costs accumulate to include vehicle maintenance fees, road tax, car insurance, parking, to fuel. While buying a car, remember to incorporate these costs into your decision, including the occasional breakdown and car towing service.

One benefit you have for current car owners is that you can sell your old vehicle to cover the New Car’s down payment. If your car’s worth is fairly high you won’t have to fork out a single cent for down payment. One way to optimize your returns is to get your vehicle from multiple sources to accurately valuate the business. To do so, either you can drive down and the dealerships to get a valuation that’s very difficult frankly, or you can get a free , no-obligation car valuation here within 24 hours.

A liability instead of an asset

A car’s value within the first year will fall in value by as much as 60 per cent. A car’s worth nothing more than its deregistration and junk money by the time 10 years are up.

In fact, cars are not cash-generating assets (unless you’re a full-time Grab driver, or something similar, again). Each month, cars actually cost you money, in terms of insurance, road tax, fuel, parking and more. It makes your car a liability, and potentially the most expensive you’ll ever be taking on.

Affecting home loan eligibility

The Total Debt Servicing Ratio (TDSR) system caps the maximum amount you can borrow when you get a home loan. This means that monthly repayments on all of your debts (home loans, car loans, educational loans, etc.) can not reach 60% of your monthly income.

You have a couple of other debt commitments now on top of that. You have a renovation loan, and a loan from your wedding, which includes repayments of every month. Including the car loan will increase your monthly debt obligations. When it reaches your TDSR and you will refuse your home loan. This might mean paying a heavier down payment, or failing to get the house you want.

Know all hidden costs

You have to continue to pay other prices, such as your auto insurance premiums, irrespective of whether you are using the vehicle.

Even if you haven’t been using the car for half a year, you still pay for the premiums, aircon maintenance, taxes. This is a huge deal in financial-crisis times. You would be forced almost inevitably to sell the car at a loss because it depreciates when conditions turn grim.

Just find out if there are any extra hidden costs and don’t worry about saying no to, or negotiating the number. Everybody needs to go home satisfied at the end of the day so sit down, have a cuppa and hammer out something fair for both parties with them.

Car payment terms

Much like the car shopping, when it comes to loans, you too can look around for the best offers. Many banks are approaching to see what each of them can do. Some banks may offer you lower interest rates, whereas others offer you more flexible terms. Some could even throw freebies at them when they take out a loan.

At the end of the day, the interest rate charged and the characteristics of the loan are important to look at. A longer period of loan or a smaller sum of instalments may not actually be the best option because you would potentially end up paying more interest over your loan tenure. Remember, borrowing is a huge financial commitment so be sure to shop around at the best rates.

Know the details

Buying a car can be a difficult process and often dealers can try to mislead you with all sorts of traps and fine print. Some dealers can even sell you ‘attractive’ car loan and insurance policies but if you’re unhappy with it, it’s not a must to take them up. The same applies to Guaranteed COE packages.

And understanding your rights as a customer is critical. Consumers in Singapore are covered under Lemon Law. In the case of new vehicles, this means that if a flaw is discovered on the purchase within six months, the manufacturer will have to fix or rebuild the vehicle as necessary, unless it can be proven that it is not a fabrication fault. Consumers may also report a faulty vehicle for used cars within six months of delivery, but the seller has an duty to show that the alleged defect was not present at delivery time.