Every teenager dreams of the day they can own their own car and will usually have wild dreams about what that first car is going to. If you are finally at a place in your life where you are financially preparing for the big moment where you purchase your new car, it is important that you tread carefully and do not make any hasty decisions. Buying a new car is a big decision and it will involve you having to make many decisions financially and otherwise. Most people tend to invest their savings in a car without too much of a thought and find themselves in debt a few months later without enough money to pay for the car.
Sorting out your finances
The very first thing you will need to do is to look in to your finances and set a solid budget for your new vehicle. Of course, your budget for your car should not be your entire savings. It is important that you leave enough in your savings account to survive in an emergency and to sustain you for at least three months in case you lose your income or find yourself in a financial emergency. Another thing you will need to think about is the additional costs that you will need to pay in addition to the actual cost of the car such as motor insurance in Singapore, life insurance and the fees associated with getting your driving license such as driving school fees. After all, there is no point owning car that you do not know how to drive.
A known formula for purchasing cars is to buy a car for which you can pay at least twenty percent of the total cost of the car upfront when purchasing the car and an installment plan that is as high as possible and therefore spans the shortest time possible that you can pay with your monthly salary. You will however need to consider any monthly or annual vehicle warranty charges that you will need to pay.
The reason for this is that not being able to pay at least twenty percent of the total value of the car upfront will eventually mean that you may not be able to pay for the car and it can also mean that you eventually will end up paying far more money for the car than it is actually worth inclusive of the high interest costs. Paying the car money off as soon as possible, even with difficulty prevents this from occurring.