Planning to buy a used car? Use this checklist to ensure you have made the right choice!

checklist to ensure making right choice buying used car
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Understand your own needs – be honest with yourself

Buying a car is always exciting! From the regular workhorses that bring you from point A to point B to exciting sports saloons, the options are truly endless. While all of us have the “inner beng” that loves sexy and posh sports cars, it is important to remember to work around our budget and utilization needs.


Purpose of your car?

What are you going to use the car for? This would primarily decide the choice of car you are going to get.

  • Sedan (The traditional comfort choice most drivers)
  • Hatchback (For the nimble driver)
  • Station Wagon (For families or individuals that have to ferry big goods)
  • MPV (For big family!)
  • SUV (For the sporty driver)
  • Workhorse (The Toyota Vios and Altis that would never* breakdown)
  • Sports (BMW M series, Honda Civic Type R, Subaru WRZ, Audi RS series for the adrenaline lover) 
  • COE renewed car (For the car enthusiast or budget savvy individual)


Financial Planning

There are 2 essential factors here.

  1. Your TDSR (Total debt servicing ratio). This affects your future credit rating, hence, young couples who are applying for a BTO soon would have to take note of this. 
    • The total income and finances committed to service all types of loan combined is earmarked at 60%
    • Based on our humble experience, servicing a monthly repayment loan that takes up 20%-30% of your salary is the sweet spot.
  1. Your first down payment will be a hefty one and it’s best to be prepared for it. Everyone’s case is unique but let us show you an example of the breakdown for your first payment.
    • Down payment (Usually 30% of the car price)
    • First month installment 
    • Some dealerships charge an administrative fee for each purchase
    • Loan Processing Fee (If you take up an in house loan)
    • Motor insurance that ranges between $800 to $2500 depending on your “No Claim Discount”, also known as NCD and the type of car you buy. 
      • For example, the insurance premium of a normal sedan like the Toyota Altis is usually much cheaper than a Subaru WRX or Honda Civic Type R


Find out which finance package works best for you

While there are probably a dozen different hired purchase loan types available in the market, it basically boils down to 2 main types:

  1. Bank loans (Examples: Maybank, DBS, UOB etc)
  2. Inhouse Financing


Here are the basic summary of each type of loans

  • Bank loans offer a competitive and attractive interest rate. They also rarely charge any loan processing fees; so they are much cheaper to apply. 
    • However, they do record these loans into your total debt servicing ratios, so they might not be suitable if you are looking to make a property purchase in the near future
  • Inhouse financing is typically aimed at customers who might have weaker credit ratings. 
    • It usually comes with a much higher interest rate (sometimes 2 to 3% higher than bank rates)
    • There is also a loan processing fee charged. These can range from $300 all the way up to $2000, depending on your credit rating 
    • People who are highly leveraged also tend to prefer inhouse financing options since it does not show on their total debt servicing ratio


You should always spend some time thinking if you want to commit to a car loan because it can span up to 7 years; which is a long time. Remember to always buy within your means and if you have more questions about finance packages, our client advisors are always happy to help.


Shortlisting your car

There are many ways to help you find the car of your dreams. The most common method is to go to classified platforms like www.sgcarmart.com or www.carousell.com where they can compare and check out over 10,000 cars listed at any given time.

If you are looking for a workhorse or if you prefer a hassle-free car ownership experience, we would recommend that you consider Japanese or Korean make & models.

Again, it really depends on your needs. Do note that the cheapest car are not always the best purchase; rather than find the cheapest car, you should find the car that caters to both your needs and financial capabilities


Found a car you like? Make sure you send it for an inspection

No matter how experienced you are in buying a car, you should always send the car for an inspection. 

At otua.sg we always joke about how some beautiful cars look perfect on the outside, but once it’s hoisted up… all the ugly truth comes out. 

Like how we often advise our buyers – “No matter how good the car looks, always let a professional tell you if the car is in a good condition”. At otua.sg, we provide free inspections for all our buyers, once a deposit has been collected. 


Enjoy your ride

Now that you have gotten your new ride, don’t forget to take photos and share them with your family and friends!

To make sure your car looks picture-perfect, we have discounted grooming packages as well as servicing packages tailored for your car.

Feel free to contact us to find out more at 87671091

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