Wednesday, November 25, 2009

6 Factors To Consider Before Purchase Your First Car

For those who just graduated and are planning to enter the workforce, a car is an important element. For example in Kuching, most of us drive to work. We cannot rely on the public transport. The local public transport is limited, inconvenient and not punctual.

There are several important factors to consider before you purchase your first car. I listed the factors as below:

1) Ability to pay the monthly repayment (car loan)
I listed this as the most important factor. One must know their budget well before they sign on the hire purchase agreement. Most bank will require a monthly income of at least three times from the monthly hire purchase instalment. To be on the safe side, I think it is a good idea if the monthly installment is 25% of our monthly salary. This will leave more space for our
money to grow.

2) Fuel consumption of the car
Unless someone else pay for your car fuel, you should really consider whether the type of the car that you are going to buy is high fuel consuming or not. I heard a lot of cases where one had to spend the same amount of car monthly installment for their car fuel. Bear in mind, the fuel price is increasing from time to time. It is wise to choose a car which requite less fuel for you to move around. It is environmental friendly too.

3) Yearly insurance of the car
Do check how much you have to pay for the car insurance. And do bear in mind that every year this should be in your budget. As no car is allowed to be on the road without an insurance.

4) Yearly road tax of the car
Imported cars and bigger car will require a higher road tax compare to locally made cars. The road tax also should be in your yearly budget.

5) Functionality of the car
Do you need a sedan car for your family? Or most of the time you travel alone? For family car, you will need a bigger car. And you will only require a small car if you are driving alone most
of the time.

6) Availability of spare parts
This is another factor which is always not in the considerations list of a new car buyers. It is normal for us to expect a brand new car to be able to serve us at least until we finish pay the car loan. But, unfortunately, even for brand new imported cars, someday, some parts will need to be changed and replaced. May be due to accidents or other matter. Try to get information on the car spare parts. You will not wish to know that, later, you will have to wait for months for the spare parts to be send from the original country. Or worse, the spare part is not more in production.

I do hope the above will provide first time car buyers with some information.

Anymore factors which I missed out? Do add in and share with me.

8 comments:

  1. Hi..nice article..Allow me to copy it :)

    PG
    -Dr.Hafizi Abdullah
    20rejab.blogspot.com

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  2. Dr Hafizi, Yes, sure... my pleasure :)

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  3. maintenance cost, which cost you about rm100-200 after 5000km drive.

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  4. I have been driving my current car for 6 years now. I bought it new last time. For my next car i'm planning to get a 2-3 years second hand japanese make. Why 2-3 years? because car owner tends to be more careful when the car is still new and 2-3 year to give enough time for the car to depreciate but still remain as semi-new. After seeing most of the new car here worth only USD15-18k, i don't really feel like buying a car that prices RM100k or more.

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  5. how about to consider getting an used car with lower monthly installment so that you have excess to purchase a house. invest in house could be a better choice than in a car. nevertheless, this depends on one's needs and wants.

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  6. Raymond - Yes, absolutely right! i missed out maintenance cost. Thank you for adding in.

    Zen - I heard a friend from London said he bought a new car with only about £10K while in Malaysia, that same car cost about RM100K. Buying a second hand Japenese car is a wise decision. Just make sure, the car still in excellent quality.

    Anonymous - I heard a lot of people said they prefer to invest in house than car, as car value depreciate very fast. As mentioned by Zen, a good quality second hand car is a wise decision. Thank you for dropping by :)

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  7. I just bought a motocycle two days ago. I never thought of buying a car which is burdern to fresh graduate. I just borrow car from my sister if needed. :)

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  8. Mrcoolku, great to hear that. You're really smart with money, especially as a fresh graduate. Motorcycle not only require less money, but also move faster, consume less fuel, easy and free parking as well. It will be great if can have both motorcycle and car. As you move on, you will find yourself need a car :)

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