You need to avoid these 5 car buying mistakes at all costs!

Aside from a house, the next biggest purchase would be a car. Easily costing tens of thousands of dollars or more, it is a decision that should not be made in haste. Making all the wrong choices when buying a car will not only be a financial mistake, it can also result in unending frustration.

Here are five fatal car buying mistakes that you must avoid at all cost.

1. Not thinking far enough

Buying a car is much more different than, say, buying an iPhone, and we are not comparing the prices of these two objects here. What we are talking about is the costs incurred in the long run. Buying an expensive phone, exquisite jewellery or a gold bar involves a one-time payment. With a car, however, you need to consider the running costs.

If you are financing the purchase of your car, you will need to consider the monthly instalments. Even if you have paid for the car in full, you still have to consider the road tax, insurance, parking, fuel, various maintenance costs such as engine oil change, tyre change and unexpected repairs. While you may be able to buy a fancy sports car or luxury sedan with your savings, these cars often incur substantial running costs as well, and with all things considered, you might pick up a baggage that you simply cannot handle in the long run.

2. Rushing into a deal

Buying a car can be an emotional experience, but it is, however, important for you to make rational decisions as it is not a minor purchase. Every salesperson hopes to close a deal, and the faster they can do it, the better. Some of them will even go to the extent of making it seem so urgent that you won't have the time to think through your decision.

While it can be argued that you should strike while the iron is hot, so as to not miss out on a good deal, you could have been coerced into making a bad decision. Such as buying a car at a higher price, or worse still, ending up with a lemon that will cost you more than what you thought you have saved. Always stay calm and manage your emotions when looking to buy a car. Do the necessary 'homework', especially so for used cars. You should also avoid impulse decisions, which you might regret later.

3. Dismissing an option prematurely

While it is not wrong to have your own rules to live by, you can possibly end up with the shorter end of the stick by fixating on a certain mindset. It will be beneficial to keep an open mind.

Take brand snobbery for example, you may gloss over an entire range of cars simply due to your prejudice, causing you to disregard amazing cars. Or you can be someone who only believes in buying a brand new car, but by doing so, you may miss the opportunity to purchase a relatively new used car in stellar condition for a steal.

These are just some examples of why you should not dismiss any option prematurely. When making decisions for such a substantial purchase, it will be wise to consider all your options.

4. Focusing on wants instead of needs

Many feel that cars are inherently a want instead of a need, due to the efficient public transport system here. But that is not what we are discussing here. You are buying a car because you have established it as a need.

When choosing the car that you want to buy, that same argument comes into play. You may have strong desires for that Porsche 911, but is it really something that you can afford in the long run? Is such a car really a need? Would it fit your family of five? This is a want, not a need, and stretching your budget to accomodate a want will most definitely be a huge financial mistake.

As much as possible, it is important not to stray from your needs, the main purpose of buying a car.

5. Buying at the wrong time

Cars' prices fluctuate and it is simply impossible to accurately predict whether they will go up or down without being a clairvoyant. However one should always research and observe the market trends to minimise the probability of buying a car at the wrong moment.

If the famous investment adage 'buy low, sell high' is anything to go by, you should most definitely buy a car only at the right moment - the lowest price point. This holds particularly true in Singapore, due to the COE system. If you were to purchase a car during the peak COE period, you will face trouble trying to sell your car when the COE nosedives as your car will have an unfavourable depreciation. Even if you choose not to sell the car, you will still have to bear the higher depreciation.

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