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5 Things to Consider in Buying Your First Car.

Buying your first car can be very exciting - the thrill of stepping inside a showroom, inspecting the cars on display, going out for a test drive, closing the deal, and finally driving home with the car of your dreams. Sounds idyllic, right? But in reality, buying a car can be very overwhelming since it entails tons of financial responsibilities, as well as lots of paperwork.

For most people (and that includes me), a new car is the second most expensive item they will ever buy, aside from their home. Here in the Philippines, the retail price for a brand new regular sedan hovers around Php 681,000 - an amount accessible enough for the middle class. Of course, not everyone can cough up more than half a million pesos right away. As such, it is important to be fully prepared both mentally and financially, because buying a new car is not as simple as let's say, buying a new smartphone. 

There are several things to consider when buying a car, whether it's brand new or second hand, and here are some of them:

Your Needs
So why exactly, do you need a car? 

Kim Seon Ho in Start Up (2020).

Are you buying a car for the safety and convenience of your family so that they won't have to use public transport and avoid possible exposure to COVID? Or are you simply buying a car for long drives and weekend getaways? Do you need a posh-looking car for meeting with clients and executives? Or are you buying a car that can also be used for side hustles (think courier services and car trunk surprises)

As you evaluate your needs and your lifestyle, you will be able to pinpoint the car specifications that you need and which car model will suit you best.

Your Budget
Before you make a run for the showroom, you need to think long and hard if you can really afford to buy a (new) car.

Photo credit: Karolina Grabowska on Pexels.

As a rule, your car budget should be around 10% to 15% of your total monthly budget. This includes expenses such as car insurance, car maintenance, gas allowance, and parking and toll fees. Calculate your finances carefully, and look into car brands and models that will fit your budget. 

Car Options
In this digital age, it is now easier to "shop around" for a car. With the wealth of information that the internet has to offer, you can easily compare and contrast car brands and models and narrow down the choices within your budget range. 

Toyota Cars' virtual showroom.

Car dealerships and agents are now easier to contact too, thanks to messaging apps. You can ask multiple dealers to quote you prices without having to visit the showroom right away. Some of the leading car brands now have virtual showrooms which allow you to check out the latest vehicles right in the comforts of your home or office. How's that for some COVID-free car shopping?

Test Drive
Of course, nothing beats the experience of actually riding and driving the car that you've been eyeing and checking out its features firsthand. When you go out for a test drive, make sure to bring friends or family along so that you can also have a "feel" of the car from the backseat (comfort, leg space, cargo space, and the like). Pay attention to the small details such as the feel of the steering wheel, how comfortable the seats are, how the car feels when you make a turn, or how the brakes respond. 

Jung Hae In in Something in the Rain (2018).

If your test drive does not live up to your expectations, don't be pressured into buying that particular car. Check out other brands or models that will still fit your budget rather than be stuck with a car that you're not satisfied with.

Financing Options
Now that you've decided as to which car you will buy, you now have two payment options - pay for it in full, or have it financed either by the bank or or the dealership itself. 

If you're taking out a loan to finance your car, you need to consider these things - the loan amount (the price of the car), the loan term (the period of time that you have to pay the loan amount), and the annual percentage rate (the interest rate of your loan)

Photo credit: Erik McLean on Pexels.

To give you a clearer, more realistic picture of the amount that you'll be shelling out for your car, you can use the loan calculator at With this calculator, you can get an accurate calculation of the loan amount, monthly payments, and interest rate. You can also compare multiple loan options to see which payment scheme fits your budget. 

Keep in mind that a higher down payment can decrease your monthly payments, and while longer payment terms mean lower monthly payments, you may end up paying much, much more in total because of the interest rates. 

Buying a car is no joke. It's a major purchase that requires careful planning, decision-making, and of course, a huge amount of money. Make sure you do your homework before you buy a car, and be ready for the responsibilities that come along with it.

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