What expenses do I need to consider before buying a car?
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Buying a car entails more than just being able to stomach its purchase price. You'll have to take into account the costs incurred to keep the car on the roads too.
If you are a first time car buyer, this can be hard to ascertain. But fret not - we've broken down some of the miscellaneous expenditure you'd have to deal with!
1. Deposit
Ensure you have sufficient funds for a downpayment. This is usually about 25% of the car's cost. Lower downpayment amounts may not get approved by your finance company or the bank.
2. Monthly Instalments
Ensure you can also stomach the monthly instalments. Stretching out your loan tenure to lower your instalments can result in having to pay excessive amounts in interest.
3. Fuel/Car Charging Cost
You'd need to pay for fuel or electricity. EVs tend to cost less to run, but you'd have to endure lengthy recharge times if a slow charger is employed.
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4. Maintenance/Car inspection Cost
Preventive maintenance is cheap insurance against catastrophic and premature failure. As a general guideline:
- Check the tires and wheel alignment every 6 months or every 5,000 kilometres
- Check the brake disc system and front brake pads every 6 months or every 5,000 kilometres
- Synthetic oil and filter should be changed every 6 months or every 5,000 kilometres
- Should check the clutch system every 6 months or every 10,000 kilometres
- Brake fluid should be changed every 24 months or every 40,000 kilometres
5. Compulsory Motor Insurance/ Voluntary Motor Insurance / Road Tax Fee
Factor in the cost of insurance and road tax when doing your calculations. A top tip - remember to pay them on time to avoid spending more on late renewals/fines!
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6. Parking Fee
Monitor the places you frequent, and work out your parking costs of those venues. Season parking can also cost quite a hefty sum monthly, especially if your work place requires it!
7. Toll Fee
Toll charges are put in place to dissuade road users from utilising the expressways. Passing many checkpoints can mean a huge sum of cash monthly. Look for alternative routes, or consider other forms of transport if the figures are too great for you to swallow!
8. Additional Car Accessories Costs
We are not talking about aftermarket performance parts here. These accessories refer to gadgets that make you feel more comfortable on the roads. Think wireless phone chargers, Bluetooth, car air purifiers, car cameras, car perfumes, and more!
9. Car Wash Fee
In case you don't live in a house with a car wash area, such as a dorm or condominium, you may have to rely on car care services instead which is considered as another additional expense. But if you can clean it yourself, it will help save money in this part.
10. Other expenses
Throughout the period of using the car, of course, we may have to encounter some unexpected things, such as traffic fines, accidents requiring emergency car repairs, having to call a tow service, emergency tire changing, etc.
Financial planning is key, and you should have emergency funds before buying a car. Think of the worst-case scenario, and see if you can stomach the expenses. Only then should you buy a car!
