Car ownership is treated like a rite of passage into adulthood. Most people consider this an indication that they have done well financially. Often, a car is one’s first big purchase. Before one thinks of buying a house, they consider buying a car first since this is usually cheaper.
However, in a country like Singapore, where public transportation is efficient, one should carefully consider a decision to buy a car. Before going to a Hougang money lender or someplace else for a car loan, here are some things you should consider.
How Much Money Do You Have?
Before you even decide what car to buy, you have to consider how much money you have. If you have enough savings, you can opt to use that instead of applying for a car loan. If you do not have enough funds, try to find a car that you can afford with how much you have right now.
Even if you do not pay the full purchase price immediately, you will be required to pay a down payment. By taking available funds into account, you can strategize on what car you should get and how to afford the payments. This will enlighten you on whether or not a car loan is inevitable.
Also, car expenses don’t end with just the vehicle itself; you should also consider car registration, gas allowance, and funds for maintenance and repairs. Car maintenance is crucial, especially if you are thinking of selling the car later on. It is also important to note that once the purchase is made and you have taken out the car from the car dealership’s office, the value goes down.
Do You Have Other Alternative Mobility Options Available?
Another major thing you need to consider is your purpose for buying a car. Are you having trouble getting to places for your work? Or are you planning to purchase a car so you can travel across the country?
Since there are other available transportation options aside from public transportation, such as car-hailing applications and companies offering cars for rent, are there specific reasons why you still need your own car? By being honest with yourself regarding your motivations, you will be able to make a wiser decision.
How Much is Your Budget for Car Loan Repayment?
Another wise thing to do before applying for a loan and availing of credit options is to plan out your debt repayment scheme. Consider your total income, your regular expenses, and whether or not you can afford another obligation. Your cash flow will greatly affect how easy or hard car loan repayment will be.
How Will Debt Repayment Affect Your Lifestyle?
Aside from the financial constraints that come with another debt, you must also consider how it will affect your lifestyle. Can you forego future purchases to buy a car now? Can you manage to not go on vacations? Can you pass up on other opportunities that will require you to spend on additional training and education while you are still paying for your car?
Can You Afford Car Repairs and Insurance?
On top of the amount needed to buy or make a downpayment on the car, you need to have money for car repair ready beforehand. You just never know when it will break down or an unexpected, untoward incident may happen.
Car insurance is another necessary expense. Since you’re already going to get one, it would be wise to avail of comprehensive car insurance to ensure you will not have to pay the entire cost of the damage in an accident.
Conclusion: A Car Loan Is A Huge Commitment
It’s alright to be excited with the idea of taking out a car loan; you should first examine why you want a car in the first place. Consider every single expense that comes with owning one and your current income and expenses. That way, you won’t have borrower’s remorse with your vehicle in the years to come.
