5 Things to know before purchasing the first car

“The first car” is something that many may dream of because a car can facilitate us in traveling and it is also an asset that can show our social status. However, before paying an installment or purchasing a car, we should study the details and question ourselves thoroughly first. This time, ACU PAY will take you to know 5 important things before buying a car.

1.A budget to buy a new car

The first important step in buying a car is how much of a budget you have. Of course, you can get a car loan just by having a regular job and having proof of salary, but many have given up on paying installments for their new car and let the car be seized by a loan company because they can not pay installments anymore. 

Data from the National Credit Bureau (Credit Buro) revealed that there was a total of THB 2.6 trillion in auto debt in the first quarter of 2023. There are 350,000 auto loan accounts, and more than 53% of them are ‘Y generation people’ who have more than 30 days of outstanding debt.

Therefore, before you buy a car, it’s better to consider your budget carefully before making a decision.

2. Car installment burden should not exceed 20-30% of your income

This needs to be considered very carefully because if you buy the first car when you have too many burdens, you can be discouraged and have no passion to pay car installment anymore which will lead to your car being seized by the financing company. Not only will you not get your money back, but you will also be on the blacklists. Therefore, good car installments should not exceed 20 – 30% of your income because the money should be reserved for necessary expenses such as mortgage, water bills, electricity bills, food, and other expenses, including emergency funds.

3.Select a car to suit your usage

For those who want to buy a car, of course, everyone has a favorite car in mind. However, for those who want to buy the first car, apart from personal preferences, you should have the answer to the question about an objective of the car usage so that you can use it as much as possible.

The model of cars also affects the price of each car. Choosing a car that suits your needs will make you happy with the best performance and cost-effectiveness. If you choose a car based on your preference but is not right for your use, it could be a big burden to pay off over the next 5-7 years.

4.Buy in cash or in installment

Buying a car in cash is practical for people who have a lump sum of money that is not emergency money or want to invest this lump sum of money with something else that will grow more than to pay the interest on the car loan. It is better to buy a car in cash because there will be no interest burden that you have to pay to banks. In the case of paying an installment, you should pay a down payment as much as possible and pay installments in a high amount as much as you can to lower the interest. The accumulated interest on the car loan may reach hundreds of thousands if you pay a little on a down payment and pay an installment in a small amount. 

5. Hidden costs

Owning a car is not just about paying installments for it, there is also an additional charge called ‘hidden cost ‘ whether it is a car down payment, car installment, gas bill, car maintenance, car legislation Act fee, Insurance, car tax, parking fee, expressway fee, car wash. Anyone who thinks about having a car may have to prepare some money for these expenditures as well.

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