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There's a saying that car owners never forget their first car purchase. To help you get the best bang for your buck, avoid these six mistakes when deciding on your first vehicle.
Buying a car is one of the biggest and most important financial decisions you can make in Singapore. Just like applying for a house, purchasing a car can affect you financially for several years down the road.
If you happen to be a first-time car buyer, this decision can be both exciting and daunting. Instead of getting overwhelmed by the occasion, it's important to be mindful and avoid these six mistakes when buying your first car.
Drivers will never forget their first vehicle, so make your first purchase a good one.
1. Buying Without Proper Research
If you’re planning to buy a big-ticket item like a car, it’s important to perform thorough research before making a purchase. If you step into a car dealership without any prior knowledge, you might end up buying something that the dealer wants to sell you instead of making a purchase that best suits your needs. With the internet so readily available, you should research on the different car models and makes, as well as their specifications and prices, before committing to a purchase.
2. Insisting on Buying a New Car
Is “new always better” when it comes to cars? No, not really. First-time car buyers shouldn’t fall for this mindset as second-hand vehicles can be a great option as a first car. Not only are they cheaper, but they also suffer from less depreciation than their newer counterparts. Furthermore, if you’re only planning to drive for a few years, a used car would be a more feasible option than a new one.
3. Getting Pressured to Make a Purchase
Some dealers can identify first-time buyers the moment they step into their dealership. Once identified, they’ll hard sell you with “special promotions” and “freebies” to get you to make a purchase immediately. If you’re uncomfortable with such underhanded tactics, know that you are in control and have the power to walk away. These dealers are only interested in your money and have no concerns about your needs as a driver. If you can’t deal with hard sell tactics, bring someone you can trust to help you make a more informed decision.
4. Buying a Car for Its Look Instead of Its Function
Buying a car for its practicality and function is more important than its look and appeal. Yes, a sports car might seem awesome, but it would be a terrible vehicke if you need to ferry your family or elderly parents around. When deciding your first car, it’s always important to consider your needs first before anything else. A car will stick with you for a long time, and there’s no second option after you make your purchase.
5. Choosing a Long-Term Loan to Finance Your Car
A common mistake that first-time car buyers often make is to accept a long-term car loan with low monthly payments. Although it might seem like you are paying less each month, these financial options could actually increase the overall cost of the car. For example, a S$70,000 loan with an interest rate of 2.78% over five years would cost you $79,740. If that same amount is paid over seven years, it would end up costing you $83,664. That’s an additional $3,924. Make sure you weigh out your financial options before signing for a car loan. Remember, a car is suppose to be an asset, not a commodity that ties you down financially.
6. Failing to Take Your Car for a Test Drive
Test driving a car, especially a used one, is a good way to judge its road worthiness and your ability to handle it on the road. If you buy something you’re not comfortable driving, you might end up with buyer’s remorse.
Do you have any other tips for first-time car buyers? Let us know in the comments below.
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