Goal # 3: Buy your First Car
Buying a car is probably the second-biggest investment an average person will make in his life, so you should really study and review all your options, make a proper investment plan, try out and experience the vehicles you’ve short-listed as extensively as you can, and seek advice from family members and friends who are knowledgeable about cars.
January: Decide on your needs and wants, and do research.
The first step is to determine what your auto needs are, set a budget, and be honest with yourself regarding your needs and your financial capability. How and where will you use your car? Every day, on long drives over poorly surfaced roads, hauling heavy cargo... the list goes on.
As for your budget, aside from the acquisition cost of the car, you must also consider the average running cost (fuel consumption and cost of depreciation), maintenance cost, insurance, and LTO registration cost of your choices as these vary among models and brands. On a side note, maintenance cost (i.e. the cost of parts, services, and labor fees) of a particular car can determine the insurance cost as well. This is because the more expensive the overall maintenance cost, the pricier it will be to have it repaired in the event of an accident. A car can also eat into your income, so be sure that your monthly cash flow can afford you the vehicle of your choice.
March: Prepare your questions and visit different dealerships.
Once you’ve identified your needs, log onto the Net. Research online about all the cars on your short list, and make sure the reviews and websites you’re reading are from local sources. The same car can be sold in different places around the world, but people’s views on them will be different because the culture, trends, vehicle prices, and running costs are different, too.
List down information that needs clarification, and ask a sales representative about it when you drop by the dealership. Set aside an entire day to do your rounds of car shops. It helps to bring along someone who’s knowledgeable about cars with you on these trips.
May: Prepare your budget.
For most financing companies, the required minimum down payment for a brand new car is 20 to 25 percent of the total cost. Remember to factor in the cost of comprehensive insurance, the chattel mortgage fee, and two year’s worth of LTO registration (all mandatory for a financed car). BPI, BDO, Metrobank, East-West Bank, and PS Bank are the top vehicle financing companies in the country today.
On the average, financing companies charge about 7.5 to 8.5 percent interest per annum on the total remaining balance of a car. With this in mind, it’s advisable that you minimize your loan amount by making a big down payment and paying off the balance in the shortest term you’re comfortable with.
July: Shop around for the best deal in town.
Check the level of professionalism, courtesy, and product knowledge of each dealership you visit. Sometimes, a great car is hampered by poor service from the dealership.
Check also which dealership of the same brand can give you a better deal. Some offer free window tint and free LTO registration for up to three years; others give an umbrella, free emergency recovery or towing service coverage for a year, and/or free service coupons. After considering all these factors, make your decision and make that purchase. Congratulations!
October: Three months after buying the car or 1,000 kilometers on the odometer.
This is your first scheduled service interval, so it’s important not to miss it! Remember to ask your dealer about questions you may have at this point. Drive safely!
Botchi Santos is the consumer editor of Top Gear Philippines. He also writes a column in the Motoring section of the Philippine Daily Inquirer.
Photo from flickr creative commons