Buying your first car can be a daunting task for some. What should you look out for? Engine capacity, gas mileage, insurance, the list goes on and on… and the biggest factor of all, financing. To make things easier, the JE crew have put together this guide.
Source: Jupiter Enterprise
Set a Budget
Keep in mind that car ownership isn’t just paying off the loan. There are other costs to consider which include:
· Insurance - which can be costly especially if you are a new driver or under the age of 20
· Road tax – Depending on the engine capacity, age of vehicle, and whether it is a diesel car. We have included a handy road tax calculator from sgcarmart here: https://www.sgcarmart.com/services/roadtax_calculator.php
· Car maintenance and servicing
· Additional costs: parking, ERP, gas – Generally, if you drive every day, the average cost would be $50-$100 depending on the type of car (consider hybrid?)
· Last but not least, the infamous COE (for all overseas readers, COE stands for Certificate of Entitlement which usually costs >$30k SGD to own a car in Singapore for 10 years).
We know going for that fancy car sounds and looks tempting, but remember, it’s always better to start with something manageable. Instead of drowning yourself in loans, why not save up for that dream car of yours?
Financing
Singapore is notorious for being the most expensive country to own a car. In most cases, a 30% down-payment is required when purchasing a car. Be it a new or used car, it is advisable to get a short-term loan (preferably less than five years). You may be paying lower monthly instalments in the long-term, but the longer you drag it out, the more interest you will incur. Typically, interest rates can range from 1.98% (here at JE) per annum to 4.98%.
Needs vs Wants
Finding something within your budget and something that you actually like. Add in the different models, brands, specifications, and style. Trust us, it’s not as hard as it seems. Most people have some idea on the type of car they want and can afford. In this case, it’s needs vs wants. Decide on what you really need, and if you can afford to drop any of your wants. For example, Dan is looking to buy a new car for his family of six and he requires one that is wheelchair friendly. His needs would include:
· A car with enough seating to accommodate six people
· Wheelchair friendly
His wants include:
· Leather upholstery
· Infotainment system for Apple and Android systems
· Phone charging jacks
· Automatic high beams
What do you need and want? Have them listed out. Chances are, most of them fall into the latter.
Do Your Research
Now that you have decided on a few models, it’s time to do your homework. Look up the internet, search for reliable dealers, read up on their reviews, ask for recommendations, ask your friends and family. Research and research. The internet will be your best friend.
Bear in mind to include several things while researching. For example:
· The specifications of the car
· Gas mileage
· Typical time period for servicing/maintenance
· What others are saying about the car
· Financing options available
Off to Purchase!
Hopefully this guide will help you in choosing your first car. Remember, you may be overwhelmed at first, but you will never forget your first. Take as much time as you need. After all, buying a car isn’t like buying clothes. Even though it’s a tedious process, at the end of the day, did we mention about the happiness and convenience of having your own car?