Thinking of buying a car? This is the probably the second most expensive thing you will buy other than your property.
Below is a 7-part comprehensive guide that is essential to know for prospective car buyers.
So, sit back, relax and read on!
Part 1 - Why and Budget?
We link these two questions together because you will need to list the pros and cons and see which situation will benefit you more. Unless you have a lot of money to burn of course.. which means you can just skip to Part 2!
Ask yourself:
Do I really need a car? For example, I have a large family and elderly parents or children to ferry around or... my job requires travelling around a lot and it saves my time and increase my productivity greatly
Am I better off taking public transport and saving the money for other expenses?
Is it better to look at mobility solutions or rent a car only when I need it?
What is the down payment I can afford? (Which is 30% or 40% of the car selling price).
How much can I set aside from my monthly salary? Is the budget enough to cover:
o Monthly car instalments
o Petrol expenses
o Parking charges
o ERP charges
o Routine maintenance
o Potential repairs
o Yearly motor insurance
o Yearly road tax
Our advice is not to spend more than 20-25% of your monthly salary on a car unless it is really a must.
For example, if your employer gives you a car allowance then of course utilize it.
If not, do not starve yourself of a good meal because of the car….
Part 2 - What Type of Car Do I Need?
Now that you’ve convince yourself that you need a car, the next thing to do is to decide the type of car you need and one that fits your budget.
Do I just need a car that brings me from point A to point B? or
Do I need a 7-seater for my large family? or
Do I need a luxury car to show that I am doing well? (For salesperson and businesspeople)
Does my budget allow me to get a new or used car? Please also consider maintenance costs and warranty options. Speak to vehicle owners that you know for advice and to understand the potential expenses involved owning a new car vs a used car.
Once you have decided the type of car you want, it is time to go hunting!
Part 3 - Hunting!
We are using the scenario that you are buying a used car as this tends to be a bit more complex.
There are a few things you can do:
Go online, search for the type of car that fits your budget, list them down before making an appointment to visit the dealer
Visit the auto megamalls like Automobile Megamart in Ubi or Grandstand at Turf City to start looking and asking around
Do some research about the dealers and get reviews and feedback. Of course, CaseTrust dealers will give you the ultimate peace of mind but there are also many non-Casetrust dealers with good track records and professional practices as well.
You will probably have a shortlist of 2 or 3 cars now. In some cases, your heart is already telling you which is the one for you. Next step…
Part 4 – Testing & Checking
It is normal to be a bit excited when you feel that you have found the car for you. Take a deep breath, calm yourself down and do the following:
Test drive the car to make sure that it is running smoothly and that you will be happy to sit through the driving experience for the next few years
Request to send the car for an independent inspection, especially if there is no warranty. Spend a bit more and reassure yourself. You do not want to pay for a major breakdown a few weeks after driving the car
Part 5 – Negotiating
If the test drive and checks go well, it is time to negotiate. The salesperson wants to close the sale as well and he will have his sales budget that he can utilize. Put on your poker face and..
Ask for a discount on the selling price
Ask for a warranty if there is none
Request freebie accessories (window films, car mats, in-car camera etc.)
Anything else you can ask the saleperson to throw in as part of the deal (petrol vouchers, maintenance vouchers etc.)
Once you are sure that you have squeezed the best deal for yourself, it is time for the paperwork and processes.
Part 6 - Paperwork and Processes
Sales Agreement – ensure that everything that is agreed is written in the sales agreement before you sign and pay the deposit
Loan Application – The salesperson will probably send requests to a few banks and leasing companies and may give you a range of interest rates, for example 2 to 5%
Tip: One good practice is to tell the dealer that if an interest rate goes above a certain limit eg. 3% you have the right to cancel the sales agreement and get your deposit back. Make sure this is recorded in writing in the sale agreement so that you do not receive only quotes with high interest rates!
Loan Approved – Dealer will inform you of the loans approved and ask you the one that you will like to go for. Normally, we will go for the lowest interest rates but check online for the services provided by the finance company to make sure that there are no horror stories
Motor Insurance Quotes– Again there will be a few to choose from and always check online for reviews instead of just going for the cheapest
Down Payment – By this time the dealer would have given you the new breakdown and the driveaway costs, which include the balance downpayment, 1st instalment payment usually 3 options to pay :
o Cash (not recommended)
o Cheque
o Bank Transfer
The most important thing is that there are ways to verify or track that you have made the payment to the dealer, which is why we discourage cash payment.
Our preference is cheque payment and making our way down to the dealer so that they will update or issue the sales agreement with the new cost breakdowns. Ensure a signed acknowledgement of the down payment. Take a photo of the sales agreement and cheque to leave no doubt!
Note: Most of the transactions for vehicle transfer is done online on the Onemotoring website and by using Singpass. Please do not give your ID card or passport to the dealer. There are also certain steps you need to be aware of if you are trading in your old car. We will dedicate another article for this.
Part 7 – Collection
The day has come! Time to get your hands on your new ride. Again, your excitement will be at an all time high. Do not just take the keys and ride off. Take a deep breath, calm yourself down and do the following:
Inspect the car. Make sure there are no damages on it that were not there before and if there is, ask the dealer to make good
Check that all the freebies that have been promised are installed or given. If not, ask the dealer to indicate in the sales agreement and sign off
Ensure that the car is transferred to your name in the Onemotoring website. You should have already accepted it online
Ensure that your motor insurance documents are issued and in force on the day that you collect the car
Ensure that road tax is valid or renewed (dealer might have promised to renew your road tax if it was expiring when they made the sale)
Ask the dealer to go through with you the different functions of the car so that you will know how to set and use them. For example, make sure you know how to open the fuel lid!
All good now? Have a great car ownership experience and enjoy the ride!
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