We have seen many people who regret buying new cars over the years. These are the eight most common signs that buying a brand new car may not be suitable for you.
1) Struggling with 40%-50% down payment on the new car
Assuming that a car cost $100 000, a down payment of $50 000 is needed. That can buy you 45 years of chicken rice. Puts things into perspective, doesn’t it? A good loan needs to be financially make sense!
2) Warning alert if you are hitting the TDSR limit soon?
Adding all your repayment obligations (housing loans, student loans, credit card debts, car loans, personal loans, etc.) cannot exceed 60% of your income if not, well, we don’t want to know what happens to you.
3) If you are considering other forms of ‘high loans’
If you are taking a big loan, there is a possibility that you have insufficient cash to eventually pay it off
4) Don’t have emergency savings in your account
It is always wiser to have a safety net. Better safe than sorry.
5) How is your credit score?
Paying your bills late and having too many cards is definitely not a good sign
6) Just graduated?
You are just starting your journey in the working world. Settle down financially first before buying a brand new one. Maybe opting for a used car would be a better choice, since we cannot deny the importance of it.
7) You change cars like you change clothes
A car is a huge investment and if you are going to change your preferences every once in the while, a used car probably your best option.
8) A car is just a ride to you, the functions provided doesn’t really matter to you
If you’re not too fussed about the specifications of the car, why spend the large premium buying a brand new car (and even paying for COE?!) when you can easily by a cheaper used alternative?
Disclaimer: I’m not saying that you cannot have a car. I am just saying that buying a new car may not be a the best option for you. There will always still be a way for you to drive around without burning a hole in your wallet.