First Time Car Buyer Checklist: Tips on Buying a Car, Insurance, Loan

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Buying your first car can be an exciting experience. If you have been planning to buy your first car, you must be eagerly looking forward to that day when you can finally do a deal. All first-time car buyers feel the same excitement, but it is important not to get carried away.  You may need help because the whole buying process may also involve a few things you may not even have considered.

Please remember, when picking a good car at the right price, to get adequate insurance to protect yourself and your car against problems on the road.

Here’s a checklist for first-time car buyers that will help you to avoid some common mistakes.

Your Budget

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  • Set yourself a budget. Make sure that you include your insurance and tax costs as well as your purchase price.
  • Monthly running cost should be taken into consideration too. Fuel economy does vary from vehicle to vehicle.
  • Regular maintenance will keep your car in good condition and that cost should be considered.
  • If there is a chance that you will have other significant outlay in the months ahead, is your budget something that you can sustain even then?

Make & Model

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Good cars for first time buyers are usually not high-powered ones.  You must decide on the features that are important to you, everything from fuel economy to automatic or manual.

Think practically about how you will be using your car and your mileage expectations. Here are a few questions to ponder on.

  • Do you need something big enough to seat other passengers comfortably?
  • Will your car have to operate well on poor roads?
  • Do you have sufficient parking space for the size of car you would like?
  • What safety features do you want, for example blind spot monitoring?

For example, if price is the deciding factor, you may look at options like Perodua Bezza 1.3 premium X (A) or a Nissan Note 1.2 Lite (A) (among others) – both have excellent fuel efficiency. Apart from these, cars like Toyota Prius CVT and Mitsubishi Space Star 1.2 A are highly fuel-efficient.

If you are someone concerned about issues like climate change and carbon emissions, you may be interested in exploring hybrid car models which are both fuel-efficient and are known for lower emissions – couple of examples are Toyota Camry Hybrid 2.5 Ascent, Honda Vezel Hybrid 1.5 etc.

Concerned about parking space? Go for the hatchback like the Mercedes B200, Mazda 3 Hatchback or Honda jazz.

If you are looking for a spacious vehicle for family, you may go for a Honda Civic or a Mitsubishi Outlander. Other options include Nissan Sylphy, Toyota Camry and more. 

What can be termed as a good car for a first-time buyer depends on the requirements of the buyer. Thus, it’s important to decide what you want before you dive into research and explore options.

Best Car for First Time Buyer – New or Used?

New

There are a few options for finding your first vehicle, including private purchases and dealerships.

If you buy new, there are a few advantages worth considering

  • You will enjoy the latest technology
  • The car can be personalised in whichever way you want.
  • Insurance may be cheaper
  • You can enjoy a comprehensive warranty

Do not forget there are downsides if your budget is tight.

  • The value of your new car drops quickly with probably 20% depreciation in the first year.

Used

There is a case that you will get more for your money by buying a used car.

  • Whichever manufacturer you prefer, you will find that you can get something higher up the range.
  • There should be no significant depreciation on your car as you begin to enjoy it.

It is important to consider a few things once you opt for a used car.

  • If you are buying privately, get someone to help you. Whoever you get should understand cars and be able to identify any problems. Unless you are a mechanic, get someone to look at more than the superficial things in the car and look at the condition of the tyres and the bodywork for yourself.
  • Dealerships should be safe because their used cars are checked if they are part of a trade association.
  • Check the paperwork that comes with your potential purchase and the invoice to be provided by the seller.

Test Drive

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  • Test-drive your choice before buying and satisfy yourself about important aspects such as clutch and brakes.
  • Ask yourself whether you are comfortable in the car and whether its dimensions are suitable for you. That should involve the ease of parking and vision when reversing.
  • Take independent advice on the price and whether it is competitive. There is plenty of information available as an initial guide but still get some independent advice.
  • Take your friends or relatives along with you. You can take their feedback as well. Moreover, you’ll be able to see the performance of the car when you have more passengers.

Negotiating Price

Bargaining is a skill and sometimes it is fun, but it is not a skill that everyone possesses.

  • Try to be non-committal.
  • Suggest a price and settle at a price that suits you without it stretching you beyond your means.
  • Openly ask for discounts and freebies. Make sure that the discount offered is more than the standard discount or if not negotiate further for a higher discount.

Auto Loans for First Time Car Buyers

Car loans for first time buyers depend upon your financial status, not your driving experience. If you can satisfy potential lenders of your financial status, you should have few problems obtaining finance.

Many first-time car buyers only have a deposit against their purchase and need a term loan to be able to buy their first vehicle. It is the detail of any financial agreement that you need to fully understand before you sign up.

  • The maximum amount you can borrow depends on the car’s OMV but as a guide, think 70% and you will not be far wrong.
  • What interest rate are you being offered, and does it compare with other loans in the market?
  • You should look at the monthly instalment payments and the term of your loan. Is your priority the lowest monthly instalment in which case the lowest you will find for an auto loan will have a term of 7 years. If you opt for a shorter term, is the instalment figure affordable?
  • Do you fully understand all the terms and conditions relating to the loan?

You can use an online calculator to tell you the commitment you will be making over any given period and at varying interest rates. Look at loan providers to get the best interest rate. Typical loan terms are between 5 and a maximum of 7 years but you can take one for a shorter period if you can afford it.

Choosing the Best Car Insurance

If you are new to the roads, it is unlikely that there are any major discounts available to you. There are different levels of coverage available and you need to know what is included, and equally what is not included, in the level you opt to take.

As a first-time car buyer, you usually have no driving record that you can use to get a discount. The best insurance for first time buyers is provided by well-established companies with a reputation for quality and service.

Good car insurance companies have flexibility that has been learnt from experience in the industry. No one wants to pay for things they do not need. However, everyone should pay for those things they certainly need and that applies to car insurance.

You can get a car insurance quote online for a specific model which helps with your budgeting.

Types of Car insurance

Third Party Only Insurance

You can save money by opting not to get comprehensive car insurance but understand that you will not get compensation for some problems you might experience on the road. So, what does third party only insurance cover? Under this policy, you are buying:

  • Cover against injuring a third party
  • Cover against damaging a third party’s property
  • Legal costs following an accident

Third Party Fire & Theft Insurance

As the name suggests, Third Party Fire & Theft Insurance has two elements not included in third party only insurance.

  • Cover against damage by fire
  • Vehicle theft.

Comprehensive Insurance

Comprehensive car insurance gives you peace of mind but be sure to read the small print. If you have saved for a time to be able to afford your first car, you do not want to find yourself in trouble because you have selected the wrong policy.

Comprehensive policies include things like:

  • Cover if you crash into something other than another vehicle.
  • Window or windscreen problems
  • Any non-crash damage
  • Cover against flood or natural disaster

Summing it up

It’s an exciting time as you prepare to buy your first car and you should enjoy the experience. Don’t let the process intimidate you and if you follow this checklist, there is no reason why it should. Refer to it regularly and double check you have not forgotten anything during the buying process.

Looking forward to purchasing your first car? While we hope this post helps you take the right decisions regarding the budget, vehicle and the loan, you don’t have to worry about choosing the right car insurance – we’ve got your back. At DirectAsia, we will be happy to listen to you and create a policy that is tailor-made for your needs. Get in touch with us today for a quote on your personalised car insurance policy!

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