With the amendment to the rules on car financing, in which you can loan up to 70% of the car selling price and with a repayment period of seven years, people who are on the fence on whether to get a car has been visiting car showrooms and second-hand dealers.
While car ownership is still ridiculously expensive, the amendment has made buying car somewhat easier for some. The selling prices of new and second-hand cars are correlated due to the simple mechanics of demand and supply. While buying new cars is relatively safe, buying a second-hand car is a different story altogether.
Here’s a video about car ownership in Singapore we’ve done:
Stories of how dealers ripped off unsuspecting customers are plentiful on the Internet. I won’t advocate buying a car unless you really need it or if you’re financially ready, but if you think you’re ready to take the wheels and be a car owner, here’re the ten common mistakes car buyers face while they buy a second-hand car.
P.S. If you prefer to “watch” this article instead, here’s a video we’ve done based on this topic:
Still here? Well, here you go.
Believing that you have to pay the full “admin fee”
Second-hand car dealers like to charge an admin fee from $500 to $1,500. Some people online claimed that if you’re good enough, you can get them to waive it off. If not, fight to get it down to just $500—I mean, yes, they’re a business and need to make money, but if this is essential, why is the range so big?
Not checking thoroughly as the car is advertised as “good as new” and “doesn’t need repair”
It’s imperative to check and check and check when you’ve shortlisted a car, because words are just that: words. Believe in your eyes instead. Here’re the parts you have to check when it’s not moving.
Body: Check for uneven colours or dents. If there is any, that could mean the car has been in an accident, and accident vehicles are generally not that reliable. Also, check for rust—trust me, getting rid of rust is one heck of an expensive lesson, because rust = corrosion = alamak, siao liao.
Suspension: Push down the car on the side and see whether it rebounds more than two times. If it does, there could be something wrong with the suspension—and the problems usually only surface after a few months.
Engine: Open the bonnet and check the engine. Some dealers make the effort to clean it, but if you spot any leaks around, you’ll better sound it out. A broken gasket could mean an engine overhaul soon enough.
Seats + carpets: This isn’t for cosmetics: discoloured seats or carpets could mean bigger problems like a leakage somewhere. Also, look out for the airbag warning light: if it’s on, they’ve better had a good explanation because it meant the airbag has been replaced before—a clear sign of a major accident.
Test driving and but not focusing on the important things
Don’t just test drive to feel the air-con or the power. Check these instead.
Brakes: Make sure the brake pedal isn’t too spongy. If there’re unusual sounds when you brake, sound out immediately. It could be due to the rotors and they’re way more expensive than the brake pads.
Steering: When you let go of the steering wheel and let it move forward by itself, the steering wheel should be straight. If not, the alignment is out or there’re some wear and tear somewhere.
Engine: Make sure there’s no knocking sound. Also, if the car is vibrating a lot when the car is stationary, it could mean that the engine mountings are worn out. And anyway, this is the engine, so be extremely sensitive to everything because one small problem could mean an engine overhaul. Never let the lemon law give you a false sense of security—the onus is always on you.
Transmission: When speeding up or slowing down, you shouldn’t feel a jerk as the transmission changes gear by itself. If it’s very unresponsive, check out whether it’s just an old engine or there’s something wrong with the gearbox. If you’re getting a manual car, the chances of encountering any problem with the transmission are much lower.
Not using the Internet
If you’ve a family member or relative who is going to buy a new car, and he or she lives in the dinosaur age whereby Internet is a whole new creature altogether, go persuade him not to trust his trusted twenty-years-of-friendship salesperson and instead, scour the Internet for the best deals.
While the intentions of the salesperson might be good, he would only have access to a limited number of cars—the Internet has almost the entire fleet in Singapore (like, seriously). The tradition of going to a physical car mart to see all the second-hand cars belongs to the 90s.
Not checking out the average cost of the insurance premiums
Every car needs to be insured, and sometimes, the insurance premiums could be higher than the monthly instalments. You can use websites like DirectAsia to agar agar know how much the premiums are going to be like, not if you might just have enough to buy the car but not the insurance.
Believing everything the dealer says
Captain Picard once said this in Star Trek: TNG: “…villains who twirl their moustaches are easy to spot. Those who clothe themselves in good deeds are well camouflaged.” There’re good dealers and there’re bad dealers, but if you prefer to believe in everyone, you’ll have set yourself to a trap.
Let’s face it: check out the Internet and you’ll see several cars being advertised as “family’s second car”. You honestly believe there’re so many rich families who parked money in a car park?
Getting tricked by the dealer to go down
This is a common trick used by dealers: you see a good deal online and call the dealer. The dealer requests that you come down instead. Once you’re there, you realize the car is “sold” or the price isn’t true.
Then the dealer will start to promote other cars to you. You intended to get a good relatively new Toyota but get a lousy old Honda instead—all at the same price due to the persuasive salesperson.
The solution to this? Be firm. The car is going to stay with you for years. Don’t let a moment’s folly spoil your years (and your wallet).
Not finding faults to get a better price
Trust me, you can always get a better price if you can bargain effectively. There’re bound to be small scratches, dents or a small leakage somewhere: use them to your advantage. Ask for a renewal of the road tax if it’s expiring.
Dealers don’t just earn from the car sale, you know: they earn commissions from your insurance and bank loans, too.
Not looking for your own insurance
Dealers are affiliated with just several insurance partners, so they might not offer the best price. Shop around for the best insurance yourself—sometimes, those insurance agents you find online will even give you freebies like a cashcard or petrol vouchers!
Not going with a friend who’s a car expert
I’m sure you’ll have one: I have a few to choose from when I first got my second-hand car. They’ll do the checking for you and most importantly, you won’t feel pressured to put a deposit.