There has always been a sense of independence associated with owning a car. And like all big financial decisions, you need to consider many things before you actually get a car. Sometimes it may not be financially viable to buy a new car. The cost of living in Malaysia has become quite high over the past few years, and purchasing a new car could become difficult. In such a situation, you can consider opting for a used car instead of a new one.
10 Things to Consider While Buying a Used Car
It is always a good habit to look in to these following 10 things when you are buying a second hand or used car:
- Condition of the Vehicle
- Research Is the Key
- Ask for the Vehicle’s History
- Status of Any Loan Attached to the Car
- Car Maintenance and Servicing Records
- Take A Test Drive, Analyse the Vehicle
- Get an Expert’s Opinion
- Look Out for Individual Deals
Lets look at each one by one:
Condition of the Vehicle
Used cars can offer great value if you are able to find one that is well-maintained. The condition of the car is perhaps the most important thing you will have to look out for. It is very important to test every aspect of the vehicle before you make the purchase. Getting the vehicle inspected by an experienced, third-party mechanic will help you identify problem areas. You will also be able to get a fair estimate of the car as well as an idea of the maintenance involved. This might help you make sure that you don’t end up paying a lot for the regular upkeep of the vehicle.
Research Is the Key
Compare the cost of the same vehicle on multiple platforms. This will give you an idea about the best place to buy your car. Also, if you are considering to apply for a car loan, check offers by different banks. A variety of car loan calculators are available on banks’ websites that will help you find an ideal loan scheme.
It is very essential to make sure that all the documents are in order to avoid unnecessary hassle. Get the paperwork, like registration certificate and insurance, checked before you go ahead with the deal. You need to keep in mind that the registration jurisdiction will need to be changed if it is not the same as yours. Not doing so will incur hefty penalty.
When it comes to car insurance, understand the terms and conditions of the policy. If the insurance does not cover some important aspect, your claim in case of an accident will get rejected. You could end up paying more than what you bargained for.
Ask for the Vehicle’s History
It is even more essential in case of a used vehicle as the car has been used by one or multiple people and on various locations. Though, a used car is less pricey in comparison to the new model, you are still spending a good amount of money to buy it. Therefore, being cautious is necessary to get the best out of your money.
Typically in one year, a car is driven around 10,000 to 15,000 miles. Use this judgement against the age and usage of your chosen car to get an idea about its mileage. The price of a used car is often determined by the distance (kilometres/miles) it has run over the years. Do the calculations to get a proper judgement.
Status of Any Loan Attached to the Car
Check if there is any loan attached to the car. If the previous owner had purchased the car by taking a loan, make sure to verify that the loan has been paid off. This is critical because the lender will still hold the car as collateral, and might raise objection to transfer of ownership.
Car Maintenance and Servicing Records
Obtaining detailed record of the maintenance is important. It will give you an idea of how well the previous owner has looked after the vehicle. You will also be able to find out if any major repair has been undertaken.
If you have done your homework and have decided that a second-hand car is the right choice, you will now need to look at your finances. While used cars are cheaper than new ones, you have to make sure it delivers value. The car has to be worth the price that you are paying.
Although it has become easier to buy pre-owned cars, it might not always be possible to buy one with your own savings. There are many banks in Malaysia that offer loans to finance the purchase of second-hand cars. If you need financial assistance, take a look at used car loans in Malaysia.
Take A Test Drive, Analyse the Vehicle
It is very important to not to fall for any marketing gimmicks and analyse the vehicle on your own. A dealer or owner might draw a rosy picture of a sellable car, but do not be ignorant about your requirements. Go on a test drive to get a first-hand experience before making a deal. See if it is meeting your expectations in all departments. If it fits the bill, make an offer to the seller.
Get an Expert’s Opinion
Talk to someone who is an expert on vehicles and their market prices. An expert’s perspective can help you at a great extent. You can hire a professional or take the car to a trusted workshop that can provide you nitty-gritty details about the engine, spare parts, and other characteristics of the vehicle. A skilled mechanic will check the vehicle thoroughly and will inform you whether the car is well maintained from inside or not.
Look Out for Individual Deals
Buying a second-had car directly from an owner can surprisingly be a cost-effective deal. While doing so, you can also consider a vehicle being sold by an expat. Because, chances are that you can get a better deal from a foreigner looking to sell his possibly not-much-old vehicle for a much affordable price because he needs to move out of the country. This could be a far-fetched possibility but if you find yourself such a deal, do not ignore it.
Over the past few years, the used-vehicle market in Malaysia has seen a steady increase in sales. This has been further boosted by the fact that pre-owned cars are exempted under the new tax reforms. The sale of used cars has in part increased because of the implementation of Sales and Services Tax. With SST being implemented on vehicle manufacturers, the prices of new cars has gone up. SST has helped customers save on the purchase of second-hand cars with vehicle prices dropping between 1% and 4%.
Buying a second-hand car has its own set of advantages such as:
- A used car comes with a lower price tag and a reduced overall cost of buying a car.
- Generally, new cars fall under a higher tax bracket when compared to pre-used cars.
- You can save on registration fee, dealer fee, and other costs.
- With proper financial planning and research, you could potentially be able to own a car that would otherwise be out of your budget.
Before you go ahead and apply for a car loan in Malaysia, you need to understand the terms and conditions of repayment. This is because car loans are secured loans; meaning banks issue loan/financing against your car. Make sure that you keep up with your payments and choose the car that offers value according to your budget.
Like two sides to a coin, you also have downfalls that you will have to keep in mind. If you are not careful, you could end up paying a lot for the maintenance of a used car.