5 mistakes to avoid before buying a car

5. Buying a (new) car at the wrong time

A lot of people commit this mistake but it is not exactly within your control.

[For instance], if you had bought a car in 2010 or 2011 when the COE was sky high (at around $50,000), you will be suffering now as you will be paying [for] a really high depreciation and selling the car now is unfavourable [in returns]. You will be lucky if you broke even. There is [also] no way you can predict that COE [will go up or] drop the following year, hence, a lot of people make this inevitable mistake.

4. Focusing on wants instead of needs

Know clearly what your needs are and do not focus too much on your wants. The Porsche 911 may be the car that you want so badly but no, your family of six or seven is not going to fit so you [have to] be more practical.

ALSO READ: Buying a used car in Singapore? Here are 5 common mistakes to avoid before making payment

3. Dismissing an option prematurely

Remain open-minded so that you don't miss out on potentially good deals. For example, [if] you have an option to buy a used car but the current COE is $30,000 (which is relatively low), you may want to buy a brand new car. Used cars do not necessarily mean bad, they may be just as good.

2. Rushing into a deal

Do not rush into things, make impulse decisions or let the salesperson push you just so that he/she can earn your money. Be sure that you are financially stable and [fully aware of] what you are getting yourself into. Homework and research are important in order to see whether the car is worth every bit of your money.

Have at least two or three cars in your mind before going into a showroom; have a clear idea in mind of what you want and how much money you are allowing yourself to spend.

1. Not thinking far enough

Instalments, road tax, fuel consumption, maintenance, and insurance need to be put into perspective before buying a car. It is said that the more expensive the car, the more expensive the maintenance [will be].

Many people do not think about the running cost of the car because buying a car can be an emotional decision. Buying a car, more often than not, is not a problem for many people, but maintaining a car [the hidden costs] is actually the problem.

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This article was first published in MONEY FM 89.3.