Thinking of buying a car? Have you considered these easy ways to save on the purchase?
Buying a car, whether used or brand new, is different from buying a mobile phone or a microwave oven. You have to consider a lot of things before taking the proverbial plunge.
It is a decision that you cannot easily change. Once you have made the payment, you simply cannot back out unless you are ready to bear the depreciation cost.
While there is little you can do to stop depreciation, you can always use these tips to save a significant amount in the buying process.
1. Do plenty of research
Once you have made up your mind about the type of car you are interested in buying, start the legwork. There are many resources you can utilise to find all the relevant information about your dream car. You can read various automotive magazines, join car owner club forums, and check motor head websites for tips and comments.
In case you fail to find the information you are looking for, simply post a question on these platforms. Pretty soon, you will get answers from current owners when buying a car.
Alternatively, if you happen to have a good mechanic, you can always ask for his/her opinion. This way you will be able to get some valuable objective background information to make your buying process a lot easier.
2. Determine your comfort level
If you’re paying monthly instalments for your new car for months, you also have to think of your financial responsibility. Even though a shiny, swanky convertible may seem like an attractive deal, you need to keep all the aspects in mind before signing on those dotted lines.
Be fully aware of your monthly instalment payments, and that depends on how much financing you’re getting. Never make the assumption that it is going to be the only amount you will need each month. You also need to keep in mind the running cost and maintenance cost of your car.
There are, of course, parking expenses, insurance cost, and any other recurring costs of owning a car, like the cost of fuel. Therefore, make sure to calculate the weekly, monthly, yearly fuel charges depending on your usage and prevailing petrol prices.
Keep in mind that your car will also consume more petrol while driving in urban areas but less on highways. The best way to come to a safe estimate is to add 40% to the budgeted fuel amount. This is because most car owners end up driving more than they originally accounted for.
By adding up all the numbers, you can get a pretty good idea about the final sum. If you feel happy and comfortable with the figure, move to the next step.
3. Look for finance pre-approval
If you’re looking for financing for your next car, find a bank that offers lower rates. It’s a good idea to visit a few banks to check what kind of financing they offer.
Make sure to get letters of offer from all these banks to show to car dealers. You can extract a better deal from them, as these letters of offer are considered as good as cash.
Remember that your credit rating can be adversely affected by having several banks perform a credit check on you. Therefore, make sure to check on the local credit bureau regulations in your country. Some have a 14-day window wherein all credit checks don’t affect your credit rating.
There are also countries in which consumer credit reporting system is not linked to your credit score. If such is the case, feel free to get as many offer letters as you want.
When you have all those magical offer letters, you can enjoy an upper hand dealing with a car dealership. These offer letters give you the confidence and flexibility that you are getting the best deal possible.
4. Hit the market at the right time
There is always something new happening in the car market. Keep an eye on new models, improved versions of the old models, better deals, promotions, and end-of-the-year deals.
If you don’t have the patience to wait for such events, hit the market at the end of the month. This is the time when most of the sales persons are trying their best to make their quota for the month. More often than not, you will be able to get a better deal.
5. Learn the art of negotiation
You will find add-on fees and prices printed on the sales contracts that make the impression that these are compulsory. However, bear in mind that there is always room for negotiation.
If you happen to face an overly pushy salesman or a bad deal, do not hesitate to walk away. Choose a sales person who is calm and composed, and listens to you with full attention. It is always a good idea to take a close friend with you while shopping for your next car.
If you’re trading in your car for a new one, make sure to take a look at the used-car market. You do not have to necessarily trade it in for your new car. You can sell it to another dealership and get the cash and use it to buy your new car.
The next step is to find a good mechanic. Once you have your new car, it would be time to start looking for one.
It’s important to keep your new purchase in a good working condition.
A version of this article was first published on The Asian Parent.
Read these next:
Are You Ready to Get a Car Loan in Singapore?
7 Factors to Consider Before Buying a Car in Singapore
Why Your Car Loan Interest Is Secretly Double What It Seems
Renew COE: 5 Reasons Why It’s Better Than Buying a New Car
By The Asian Parent
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