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9 Things to know before you get your first car

Planning to buy a car in Singapore? Surely it can make your life easier, especially if you have a family, but it does not come cheap. Along with a car comes great financial responsibilities. Besides costing an arm and a leg on the right documents and licenses before obtaining your car, you would also have to consider expenses on parking and maintenance after that. If you are about to get your first car, here are the 9 most important things you need to know!

Before buying a car in Singapore

1. Get a dealer to bid COE on your behalf and save (BIG)

Before making the decision to get a car, check the prices of COE ( Certificate of Entitlement) first. If COE prices are low, it means that there is a huge chance the next COE bidding will be around the same prices. A great way to save money is to have the dealer bid on your behalf when current COE prices are low. You won’t get the car on the same day, but you are most likely going to end up with a lower COE price. If you are in a hurry, you can also get an open COE, which allows you to just drive the car straight away without waiting. Car dealers are well-versed in the prices of COE, so ask around when you visit showrooms.

2. Need to borrow money to own your dream Ferrari? Maybe you have to give it a second thought.

The Total Debt Servicing Ratio (TDSR) is a framework set up for your car and housing loans to ensure that you don’t overstep the limit when it comes to your monthly debts. Your monthly debt repayments for your house and car should not exceed 60% of your monthly income. Be mindful of that and plan well before getting a new car, especially if you don’t have a housing loan yet. If your monthly salary is set at $6,000, your TDSR is capped at $3,600.

3. Budget first.

Car dealers are known to be very persuasive. Make sure you have a number in mind before stepping in a showroom. Having a budget is important if you are interested in buying a car. One tip would be to tell the dealers that you can only afford lesser than the budget you have in mind. So if your budget is around $150,000, tell them you can only afford $130,000.

4. Are you in a hurry to own a car? Will you be able to wait? If yes, you can get the “latest” model with a better deal!

Decide on your car model beforehand by researching thoroughly online about the prices offered for the particular car models you have in mind. By knowing what other showrooms or salesmen are offering, you are at a better position to negotiate for the best deal in town. If the car that you are looking for is a new model, the prices offered could be a little higher than if you were to buy the same car a couple of months after.

5. Second-hand car can be sweet for you (and your wallet)

While most people would want to buy a brand new car, there are others that would prefer to buy a second-hand car, especially when there are budget constraints. A car’s value depreciates over the most in the first few years of the car’s lifespan. If you can’t afford to buy a new car, a second-hand car is still a good choice, especially if it is still considered to be relatively new (i.e. 3 to 5 years old). For example, a new Toyota Corolla Altis today is set at about $90,000 while a second-hand model of only 3 years is listed at about $65,000.

6. Everything is about timing

If you are willing to wait to get an even better deal and to save money, wait until the COE price goes down before purchasing the car. It is advisable to purchase your chosen vehicle at a time when you are most likely to get the best deals. Usually, the slow sales period is in May and June or in the middle of the year. January and December are known to be the busy period for car dealers as year-end bonuses can result in a surge of demand. It is less likely you can score a good deal relative to a slow sales period when there’s more urgency for dealers to hit their sales quota.

7. Make sure your care users are as comfortable as you are

Take the car you are considering on a test drive with your family or friends to get an idea of how they feel about the vehicle. If there will be other people driving the vehicle other than yourself, they too need to see and feel whether they are comfortable with the car’s design and features. Every car is designed differently and everyone have different preferences when it comes to driving. It is important that everyone feels comfortable being in and using the car before you decide on buying it.

8. Ask a lot of questions, just ask!

If you are interested in buying a particular second-hand model, definitely take the chance to inspect the car up close. Look at the tires to make sure there is no feathering involved. If there is feathering, especially if the tyre treads look a bit smooth or too flattened out, this might be a suspension and alignment problem. Problems like these are not cheap to fix, so it is better to take a close look at all the parts that you can see on the vehicle before making your choice. 

If you are really interested in a model, don’t be afraid to ask the right questions. Ask the dealers about the parts of the car and the difficulty level of getting replacement parts when the car breaks down. It is vital to consider the maintenance cost or the ease of getting replacement parts before purchasing a car. Bear in mind that not all motor insurance companies offer the option of using your choice of workshops.

9. Last but not least, choose the best car insurance plan in Singapore

After finally deciding on your choice of vehicle, you need to decide on which insurance plan to buy for your car. At InsureDIY, it is quite easy to view and compare the plans available. Comparing the premiums and most importantly the benefits offered by the top insurers in Singapore, like MSIG, NTUC Income, AXA, Liberty, Hong Leong Assurance (HLA), and Sompo is also easy. You will only need to fill in your details once and you will get to see multiple customizable quotes for your car model based on your insurance needs. You will also get to choose the coverage of your choice in terms of whether you select an “Any Workshop” or “Authorised Workshops Only” option. Whether you have any “Loss of Use Benefits” or whether you want to add on an “NCD Protector”.

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