Planning Ahead. Things You Need to Be Ready Before Buying a Car

3 years ago, I was working very hard towards getting my first house, thank goodness the painstaking process is finally over; so as it is like a taking care of a kid for a house, so it is the same for a car; another baby to take care.

A lot of people mentioned, "ah, get a new car, and just pay the hire-purchase so that you don't have to worry about the car for the next 5 years"

But these very same people do not mention all the hidden costs that comes with the car besides monthly installment.

Today, as I am writing this sharing my experience, this is also my logbook reminding myself how cringing I must need to be very discipline and every cent count on all expenses.

Then again, God can still extend my tent anytime, and hopefully crypto bull will return!

So what are the hidden costs that could come?

1. Insurance
   Depending the size and the capacity of the car, especially in Malaysia, insurance coverage is very different.
   Worse still is that after the major flood in Shah Alam, some car insurance have already decided no longer covering flood damages! Therefore it is very important to know what happens.

2. On the road tax
   Some countries do not have these; but in Malaysia, there is a yearly road tax. Therefore the bigger the capacity of the car, the higher the horse power, the more expensive the annual On the Road Tax will be.

3. Petrol (gas) monthly expenses
   Yes getting a bigger capacity car would be a lot nicer, but it also comes with a price! Bigger gallon compartment = more money ; not to mention a bigger car will drain more petrol (gas) fees. Even electronic cars have other hidden chargers like motherboard malfunction and repairs charges, etc.

4. Tyre expenses
   Yes! Tyres! A bigger car will require bigger sets of tyres, and even though this is an annual thing, it is something that MUST be budgeted before purchasing a car.

5. Quarterly maintenance (especially labour charges!)
   Yes. Some new cars actually have free first year maintenance, but they usually do not include labour chargers. These are the tiny little unseen expenses that usually catch you off guard.
   For people who wants to plan to keep the car running for more than 5 years, then it is wise to keep aside these "future expenses" whenever possible in a compounding interest so that there are less headaches in the future.

All the costs above MUST be included as additional cash that is not spent in the other usual expenses like mortgage, utility bills, food, lodging, personal insurance, emergency funds, etc.

So before looking for a car, one must know what is the additional cash he / she can spare for the car, before even thinking of getting one

Therefore, the best way to look for a car is:

Based on the affordable monthly car instalment, look for the car that fits the instalment.

Bottom line is, big liability materials like these are like kids.... there are so much more than just paying cash over the counter / applying for a loan

How about you?

Do you own a car yourself? What did you go through before you own a car?