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Buying Your First Car? Heres What You Need To Know Before Making That Big Purchase
By Michael Mutia | MoneySmart.ph - Wed, Nov 12, 2014 8:00 AM PHT
While having your own car offers convenience going to and from work, it doesnt change the fact that private vehicles add up to Metro Manilas massive traffic jam each of us have to deal with every single day.
With car dealers offering cheap financing and discounts, an average pinoy can easily fall to buying his first ever investment. After all, the economy is booming, youve got enough savings and a hard-working individual like you deserves some “luxury” diba? But owning a car is almost a major expense, and is a long-term commitment that you have to prepare for and think about. To help you decide, we list down a few pointers to remember when buying your first ever ride:
The Cost
Before you get overwhelmed with the freebies and how much discount your sales guy is willing to give, ask yourself first if this is something you can commit financially in the next 3 to 5 years. You know, the expenses doesnt end after purchasing your ride.
Just like a high-maintenance jowa, owning a car means you have to bring it to the shop for tune ups and scheduled maintenance which can cost you somewhere around Php3,000 to Php6,000 depending on what type of car youre planning to buy. That and of course your weekly gas expenses plus some extra items like air freshner, mats, and better seat covers to make it look nicer.
When I bought my Mirage last year, I only took the basic model. No frills, just a cute hatchback type for everyday use. Its cheap, fuel efficient plus the maintenance isnt that expensive compared to a bigger car or SUVs. So when buying a car, consider not just the actual amount but also the expenses it entails after buying it.
Cash vs. Financing
Im no math genius and my bosses at MoneySmart are fully aware of it. But the practical way of choosing between cash or monthly installment is simple: when you have extra cash and dont want monthly obligation, you can go ahead and pay it in full.
In general , a larger downpayment and a shorter repayment period means greater savings. But of course, most sales agent will highlight you the cheapest scheme without you realizing that going for a 5 year repayment means that your car dealer earns extra Php100,+++ from interest and you paying more than the actual retail price of your car. So choose wisely which car model and payments scheme matches your financial capacity. Best is to also check and compare with your own bank about their car loan schemes and see if they can offer better rates for existing clients.
Freebies
Ok so here comes the interesting part- Freebies. Its the magic word most sales agent use to get you biting the offer.
Before you do, ask your car dealer for the following basic freebies:
- LTO Registration: New cars registered for the first time and bought from a local dealership will have an automatic three-year LTO registration by law. After that, you will have to renew every year for a fee.
- Insurance: Most car dealers offer a free 1 year comprehensive car insurance that also cover Acts of God. After a year, you can either stick with an in-house insurance service, or shop around for better deals. If you are financing your car, it is highly recommended to have it insured within the loan tenure to protect you and your auto from any untoward incidents and possible expenses. Dont worry because as your cars value depreciates every year, so does the amount you pay for insurance coverage.
- Early Warning Device and Spare Tire: Best to have incase you are caught by a flat tire. Of course, having some knowledge on how to change your tire when no vulcanizing shop is in sight can lessen your trouble.
- Window Tint: Not quite sure if there is such laws prohibiting dark car tint. But for your own safety and decency, please note that you are not suppose to have a shade darker than the Vice Presidents skin tone, else whatever you do inside your car is subject to a malicious judgement from the chismosa conservatives in your neighborhood.
- Rust-proofing: Brand new cars dont really need it, as rustproofing comes straight out of the factory. Even basic models should have it. If not, it will cost about Php3,000 depending on the size of the unit.
- Floor Mats, Seat Covers and Car Kits: These are things definitely you should have for free. The cheapest floor mats in Handyman cost about Php1,500 and seat covers at Php800 depending on cloth used.
Of course, these freebies shouldnt be your sole guide. Look at these items only after you have made the comparison of rates given by the different financing institutions.
Warranty & After-sales Servicing
This is something you need to discuss with your sales agent with full attention. Warranty means that the the dealer will make sure that your car and majority of its components (suspension, engine, transmission and electronic systems) will last for a minimum of X number of years, or X amount of mileage, whichever comes first. Some car companies give a warranty coverage of three years or 36,000km, three years or 50,000km, or five years or 100,000km. If replacement is needed, some parts and maybe labor can be waived for cars under warranty.
Most car dealers offer free maintenance only for the first 5000km, then subsequently put a price tag come next maintenance check. The key to spending less is to religiously follow the preventive maintenance schedule, and have your car serviced only at authorized dealership within the warranty period.
If you think youre being smart by having your car checked at a friends talyer just because hes offering it for free, chances are your warranty will be revoked. Why? Because thats what you actually signed for when you bought your car. By signing the deed of sale, you agree to the warranty coverage, which means you also agree to the vehicles service schedule mandated by the cars manufacturer, which will be carried out by its dealership network.
Rule of thumb: when in doubt, ask. Better to sound stupid than act smart and end up doing something you might regret for a very long time. Remember that when buying a car, just like any other major purchases, it is important to do your homework first to help you weigh the pros and cons.
Source: Yahoo! Philippines She!
Source Link: https://ph.she.yahoo.com/buying-first-car-know-making-big-purchase-000000492.html
By Michael Mutia | MoneySmart.ph - Wed, Nov 12, 2014 8:00 AM PHT
While having your own car offers convenience going to and from work, it doesnt change the fact that private vehicles add up to Metro Manilas massive traffic jam each of us have to deal with every single day.
With car dealers offering cheap financing and discounts, an average pinoy can easily fall to buying his first ever investment. After all, the economy is booming, youve got enough savings and a hard-working individual like you deserves some “luxury” diba? But owning a car is almost a major expense, and is a long-term commitment that you have to prepare for and think about. To help you decide, we list down a few pointers to remember when buying your first ever ride:
The Cost
Before you get overwhelmed with the freebies and how much discount your sales guy is willing to give, ask yourself first if this is something you can commit financially in the next 3 to 5 years. You know, the expenses doesnt end after purchasing your ride.
Just like a high-maintenance jowa, owning a car means you have to bring it to the shop for tune ups and scheduled maintenance which can cost you somewhere around Php3,000 to Php6,000 depending on what type of car youre planning to buy. That and of course your weekly gas expenses plus some extra items like air freshner, mats, and better seat covers to make it look nicer.
When I bought my Mirage last year, I only took the basic model. No frills, just a cute hatchback type for everyday use. Its cheap, fuel efficient plus the maintenance isnt that expensive compared to a bigger car or SUVs. So when buying a car, consider not just the actual amount but also the expenses it entails after buying it.
Cash vs. Financing
Im no math genius and my bosses at MoneySmart are fully aware of it. But the practical way of choosing between cash or monthly installment is simple: when you have extra cash and dont want monthly obligation, you can go ahead and pay it in full.
In general , a larger downpayment and a shorter repayment period means greater savings. But of course, most sales agent will highlight you the cheapest scheme without you realizing that going for a 5 year repayment means that your car dealer earns extra Php100,+++ from interest and you paying more than the actual retail price of your car. So choose wisely which car model and payments scheme matches your financial capacity. Best is to also check and compare with your own bank about their car loan schemes and see if they can offer better rates for existing clients.
Freebies
Ok so here comes the interesting part- Freebies. Its the magic word most sales agent use to get you biting the offer.
Before you do, ask your car dealer for the following basic freebies:
- LTO Registration: New cars registered for the first time and bought from a local dealership will have an automatic three-year LTO registration by law. After that, you will have to renew every year for a fee.
- Insurance: Most car dealers offer a free 1 year comprehensive car insurance that also cover Acts of God. After a year, you can either stick with an in-house insurance service, or shop around for better deals. If you are financing your car, it is highly recommended to have it insured within the loan tenure to protect you and your auto from any untoward incidents and possible expenses. Dont worry because as your cars value depreciates every year, so does the amount you pay for insurance coverage.
- Early Warning Device and Spare Tire: Best to have incase you are caught by a flat tire. Of course, having some knowledge on how to change your tire when no vulcanizing shop is in sight can lessen your trouble.
- Window Tint: Not quite sure if there is such laws prohibiting dark car tint. But for your own safety and decency, please note that you are not suppose to have a shade darker than the Vice Presidents skin tone, else whatever you do inside your car is subject to a malicious judgement from the chismosa conservatives in your neighborhood.
- Rust-proofing: Brand new cars dont really need it, as rustproofing comes straight out of the factory. Even basic models should have it. If not, it will cost about Php3,000 depending on the size of the unit.
- Floor Mats, Seat Covers and Car Kits: These are things definitely you should have for free. The cheapest floor mats in Handyman cost about Php1,500 and seat covers at Php800 depending on cloth used.
Of course, these freebies shouldnt be your sole guide. Look at these items only after you have made the comparison of rates given by the different financing institutions.
Warranty & After-sales Servicing
This is something you need to discuss with your sales agent with full attention. Warranty means that the the dealer will make sure that your car and majority of its components (suspension, engine, transmission and electronic systems) will last for a minimum of X number of years, or X amount of mileage, whichever comes first. Some car companies give a warranty coverage of three years or 36,000km, three years or 50,000km, or five years or 100,000km. If replacement is needed, some parts and maybe labor can be waived for cars under warranty.
Most car dealers offer free maintenance only for the first 5000km, then subsequently put a price tag come next maintenance check. The key to spending less is to religiously follow the preventive maintenance schedule, and have your car serviced only at authorized dealership within the warranty period.
If you think youre being smart by having your car checked at a friends talyer just because hes offering it for free, chances are your warranty will be revoked. Why? Because thats what you actually signed for when you bought your car. By signing the deed of sale, you agree to the warranty coverage, which means you also agree to the vehicles service schedule mandated by the cars manufacturer, which will be carried out by its dealership network.
Rule of thumb: when in doubt, ask. Better to sound stupid than act smart and end up doing something you might regret for a very long time. Remember that when buying a car, just like any other major purchases, it is important to do your homework first to help you weigh the pros and cons.
Source: Yahoo! Philippines She!
Source Link: https://ph.she.yahoo.com/buying-first-car-know-making-big-purchase-000000492.html
