Buying a new car in Singapore can often feel like navigating a complex maze. Between Certificate of Entitlement (COE) prices, various financing options, and dealer negotiations, it's easy to feel overwhelmed. Furthermore, the average price of a new car can be a substantial financial commitment for many Singaporeans.

However, despite these challenges, there are tried-and-true steps you can follow to make the process smoother and ensure you drive away with the best possible deal. This guide will walk you through those steps, empowering you to make informed decisions and approach your car purchase with confidence.

» Learn more: Find the best car loan interest rates in Singapore.

Before heading to the dealership, take time to research and identify the features that are most important to you. Think about what you need in a car for your daily life. 

For example, if you have a family, you'd probably want a car that boasts robust safety features and offers ample space both in the cabin and the trunk. You can refer to the ASEAN NCAP to find the crash test ratings of your desired car model. 

On the other hand, you might prioritise the fuel efficiency of a car if you drive a lot for work. The LTA’s Fuel Cost Calculator is a useful tool for determining the carbon emissions (CO2) and fuel economy data of your desired car model.

Before you set foot in a showroom, it's crucial to determine how you'll pay for your new car. There are generally two main options:

• Pay cash up front: If you're paying in full, establish a firm budget in advance. Remember to factor in additional costs such as sales taxes, registration fees, and car insurance. Additionally, be aware that you may miss out on rebates or discounts, or worse, incur additional charges on your car purchase.

• Take out a loan: This is the most common method of financing a new car in Singapore. When you get pre-approved for a car loan, you'll find out the maximum amount you can borrow and the interest rate you're likely to get. This puts you in a stronger negotiating position with the seller, as you'll have a benchmark and can potentially secure a better deal.

To figure out how much you can borrow, consider using a car loan calculator. These are available online at bank websites, motor dealers’ sales pages, and independent financial blogs. These tools can help you determine the ideal down payment and your corresponding monthly repayments. 

Furthermore, when setting your budget, it's important to consider the total cost of car ownership, which extends beyond the initial purchase price to encompass ongoing expenses like maintenance, insurance, and depreciation. You can estimate these long-term costs before narrowing down your options by using the LTA's Car Expenses Calculator.

» Learn more: Compare car insurance policies available in SIngapore here.

Once you have a few models in mind, schedule a test drive to experience their handling, comfort, and features.

It's often best to set aside a specific time during mid-week when dealerships tend to be less busy. Moreover, calling ahead to confirm that the specific model you're interested in is available will save you potential disappointment.

During the test drive, don't just stick to the roads immediately surrounding the dealership. Instead, choose a route that offers a variety of driving conditions. This could include:

• Hills

• Uneven or rough pavement

• Sharp curves

• A short stretch of highway

This varied route will allow you to properly assess how the car performs in different situations.

Before heading to the dealership, arm yourself with information about the car's market value.

In Singapore, you can use online car pricing guides, such as SGCarMart, to find out what others are paying for the same car model. Pay attention to factors that can affect the price, such as different trim levels, optional features, and colour.

If you're waiting for car prices to fall, that generally only happens when the Certificate of Entitlement (COE) price decreases. Since COE bidding closes on the first and third Wednesdays of the month, it’s a good idea to watch these dates. Try to avoid buying a car in the few days just before bidding ends — dealers often raise prices then to cushion against potential COE hikes.

Once you have a target price in mind, it's time to contact dealerships in Singapore to get their offers.

You can contact dealerships directly via email to request quotes. Alternatively, you can use platforms like SGCarMart, which allow you to request quotes from multiple dealerships simultaneously. This can save you a lot of time and effort in comparing prices.

When negotiating with dealerships, remember these tips:

• Focus on the "out-the-door" price, which includes the vehicle price, COE, taxes, and any other fees. Don't just focus on the monthly payment, as this can vary depending on the loan tenure.

• Ask for any discounts or freebies that the salesperson might be willing to offer you.

• Take your time and don't feel pressured to make a decision immediately.

• Ask for a detailed breakdown of all fees included in the price.

• Be prepared to walk away if the dealer isn't offering a fair deal.

If you have a car to trade in, it's important to know its worth before you head to the dealership.

You can use online platforms in Singapore that offer car appraisals to get an estimate of your car's trade-in value. Be sure to provide accurate information about your car's condition and features to get the most precise valuation.

The final valuation of your car hinges on three factors:

• Open Market Value (OMV): The base cost of your vehicle.

• Additional Registration Fee (ARF): A tax imposed on the registration of a vehicle in Singapore, calculated based on a percentage of the OMV value of your vehicle.

• COE: The value of your vehicle is also derived based on the remaining number of months and days on the COE.

By comparing offers from different sources, including online car platforms where you can sell your car online, you'll be in a stronger position to negotiate with the dealership and ensure you get a fair trade-in value.

» Learn more: Find out where you can sell your car for the most money.

You've found the perfect car and negotiated a price you're happy with. Now it's time to finalise the purchase.

Before heading to the dealership, it's a good idea to ask if they offer car delivery services. While not all dealerships provide this, it can be a convenient option, especially if you've been negotiating remotely.

At the dealership, take your time to carefully review the sales contract. Pay close attention to:

• The agreed-upon car price

• The details of your car loan, including the interest rate, loan tenure, and monthly payment amount

• Any add-ons, such as extended warranties, insurance products, or paint protection, and whether they are necessary

• All applicable fees, including registration fees and the documentation fee.

Don't feel pressured to sign anything until you're completely comfortable with all the terms and conditions.