It is very rare in Singapore to purchase a car in full because it is simply too expensive. Not only will you have to deal with costly Certificate of Entitlement (COE) premiums but you’ll also have to consider the steep Open Market Value (OMV) of the car and all the charges that go with it. Great news is that, with the recent easing of MAS guidelines, car loans are much more accessible to get. However, there are still some things that you have to keep in mind before signing up a car loan plan. In this blog post, we will list down four car loan tips to get you the most suitable car loan deal for you.
1. Do your research.
Before settling on a decision, make sure you have done enough research. There are so many different car loan instalment options available in Singapore today. However, not all of them will be tailored for your needs.
Research on all your financing options – you can choose from bank financing and in-house financing. Bank car loans can provide you with a greater number of options but you’ll need to have a good credit score in order to get a good deal. On the other hand, in-house financing can be provided to those with a bad credit history but interest rates will be significantly higher than those found on banks. Regardless of the financing option you choose, you have to list down loan amount, loan terms, and interest rates.
2. Act like this isn’t your first car loan.
When approaching a car salesperson, avoid telling them it is your first car loan. Because car salespeople benefit from high interest rates, they might take advantage of your limited knowledge to be able to get a deal that is more beneficial for them.
3. Calculate your total loan amount.
Low monthly repayments can seem like a very good deal but it can cost you a lot more especially if it is a much longer loan term. Once you have researched the different interest rates and loan terms available to you, you have to calculate your total loan amount. This ensures that you can see how much the loan will really cost you. By comparing total loan amounts, you gain perspective on the cost of each bank loan will cost you.
4. Read the Fine Print
Prior to committing to any loans, you have to review the contract first. There are some agreements that include additional fees that you might not be aware of. These “secret” clauses can increase your monthly loan expenses significantly. By reading the fine print, you avoid getting into a situation where you are taken by surprise by your monthly loan payments.
Despite premium costs, cars are certainly still a worthy investment for most Singaporeans. What do you think of some of the tips mentioned above? Let us know your comments in the space below.
Get a car insurance quote online now. Choose the plan you want. Pay the way you want. You are insured!