Buying a car is a huge financial commitment and you will naturally have many considerations, especially for first-time car buyers. Questions such as which car to get, how to go about your car search and whether there is anything else that you should look out for can be overwhelming. Here is a simple guide that takes you through the car-buying process in a nutshell, so that you can focus on enjoying your journey to car ownership.
Before You Begin
Do your sums before you even start shopping for a car. Work out how much you are prepared to fork out in cash upfront for the down payment, as well as how much you can afford in monthly instalments. These figures will help you to narrow down your car choices. It is easy to get carried away once you start car shopping so know your budget and stick to it.
Not sure about all the fees and taxes you need to factor in? Check out our helpful infographic here about how much it costs to own a Toyota Corolla Altis in Singapore.
What are Your Options?
The same budget can probably get you a brand new but smaller car, or an older but bigger one, so buying new or pre-owned really depends on your preferences and priorities. Purchasing a new car is more straightforward as you are shopping for current models and you do not need to consider factors such as the age of the car, its mileage and whether it is accident-free etc.
To buy new or pre-owned, Continental or Japanese/Korean brand are just some of the options you need to think about. (Image: carbuyer.com)
It is common knowledge that you tend to pay more for Continental marques versus Japanese/Korean brands. If brand matters a lot to you and you are willing to pay a premium for a luxury brand, by all means, go for it. But if the badge is secondary, Japanese and Korean brands can also offer top-notch design, quality, reliability and most importantly, good value-for-money.
The Big Search
Websites such as SgCarMart is a good search engine for vehicles of all makes and models and is especially useful if you are looking for a 2nd hand car. Locally-published motoring magazines usually provide a price list of all new cars.
Knowing where to look and who to buy from is half the battle won.
These days, many new car distributors also have pre-owned divisions. Prices tend to be higher than other used car dealers but they usually perform stringent checks on their pre-owned cars and offer extended warranty, which can provide you with greater peace of mind.
Some new models are only available from Parallel Importers (PI) but not the car agents, although the latter may have close equivalents with a different model name or made in a different country. Do take note that for models sold by both the agent and PI, there are usually some differentiation in terms of specifications, equipment and options so be sure to find out exactly what you are paying for.
Choosing the Car That’s Right for You
Be realistic when it comes to choosing the right car.
The type of car to buy depends on your lifestyle and needs. If you need to ferry an extended family, the most sensible choice would be a 7-seater MPV. Leave the 2-door/2-seater coupes and convertibles to the swinging singles or couples without kids. If you lead an active lifestyle, an SUV would probably appeal to you.
Also, would you prefer an automatic or manual car, given that Singapore now allows one to just get an automatic car license? Read here to help you make a better choice.
The Monetary Authority of Singapore (MAS) eased rules in 2016 regarding motor vehicle financing so you can now take up to 70% loan over 7 years’ tenure. Car distributors and dealers usually have banks that they tie up with but if you prefer to do your own research, websites such as www.stcars.sg/car-loan-calculator/ can help you work out how much your loan instalments will cost, while others like bankbazaar.sg allows you to compare car loan rates offered by various banks.
Other (Hidden) Costs
Besides the purchase price of the vehicle and upfront costs such as road tax and car insurance, bear in mind recurring costs pertaining to the day-to-day running and maintenance of the car such as scheduled servicing, petrol, parking, tyre change and other unforeseen repairs or replacements.
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As with car financing, most car agents and dealers have insurers that they tie up with but you are not obliged to take up their policy. It’s always best to do your homework and do the comparison yourself. Familiarise yourself with the different types of car insurance coverage such as Comprehensive, Third Party Fire and Theft (TPFT), or Third Party Only (TPO). Explore the optional benefits that you can add on to better suit your specific needs, such as getting a new replacement of the same make and model should your car be stolen or total loss within 24 months of first registration, sending your car to any workshop of your choice for repairs, No Claim Discount (NCD) protection etc.
There are also many ways you can explore to help you save more on car insurance. For instance, if you drive an off-peak car or only drive less than 8,000 km a year, you might be eligible for our low-mileage option for a discount off the regular premium. Another way is to install an in-car camera which entitles you to a 4% discount off your premiums.
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