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5 Things To Look Out For When Buying A New Car

Buying a new car is fun.  Well it should be anyway.  The excitement as you start your research online, scrolling through websites, forums and social media for reviews and feedback; heading to the showrooms to get a hands-on, test driving, hopping around the Alexandra / Ubi belt. But things sometimes take a turn toward the wrong direction as you journey down your purchase, and what was a fun (and bloody costly) experience changes to something of a nightmare. 
OneShift Editorial Team
OneShift Editorial Team
23 Sep 2019

Buying a new car is fun.

Well it should be anyway.

The excitement as you start your research online, scrolling through websites, forums and social media for reviews and feedback; heading to the showrooms to get a hands-on, test driving, hopping around the Alexandra / Ubi belt.

But things sometimes take a turn toward the wrong direction as you journey down your purchase, and what was a fun (and bloody costly) experience changes to something of a nightmare.

So we thought we’d talk about some things you should take note of before signing above that line, and also after, because one too many times we tend to see a difference in service level after committing to a purchase.

1. To Guarantee Or Not To Guarantee

No, not warranty.

We’re talking about COE packages here.

Unless you’re buying the like of ultra-luxury sports cars, most layperson cars are sold with COE priced into the list price.

But COE is bid for in an open auction – which means that premiums could go higher or lower than what you know is the “current” premium.

The “current” premium would usually be the premium at which the auction closed in the last exercise, and is what most car retailers use to price their vehicles.

Sometimes if they feel that COE is on an uptrend they might use a slightly higher hedge, and vice versa on a downtrend.

Because of the volatility of the premiums, most retailers offer an option to “guarantee the COE” – which means that regardless of the premium they will secure a COE for you.

This comes at a higher cost; usually you’re asked to top up some money, because the risk is higher for the retailer.

Just imagine if premium trends were like that of say 2011 and kept rising sharply, it would cost dealers a lot of money to secure a COE for you, but they would be contractually obliged to if you opted for “guaranteed COE”.

If you had a “non-guaranteed” package, it just means that the dealer has absolute discretion whether or not to secure a COE for you, and when too.

So make sure you’re clear what you’re agreeing to in this regard; if COE is on a persistent uptrend you may consider it prudent to get a guaranteed package.

2. Discount Fine Prints

These days retailers like to bundle lots of discounts into their price lists; and advertise the lowest possible price so as to attract you.

But there’s a catch.

Well there are usually several.

Commonplace these days are things like “trade-in discount”, “finance discount”, “insurance discount” and so on, all usually with the word “in-house” in front of them.

What these mean is that the discounts you see applied on the price list are subject to things like you trading in your car, taking a loan with the dealer and insuring your car with them.

But people are savvy nowadays – we offer an easy way to get the best quote for your car, online insurance quotes can be requested for in a matter of seconds and so on.

Gone are the days when car dealers monopolised trade-in prices, loan interest rates and insurance premiums.

But being savvy isn’t necessarily being clever, because you lose out on the applicable discounts.

So go ahead and make the calculations.

See which options save you more money and go with that.

Perhaps the dealer’s financing interest rate is higher that your friendly neighbourhood shark; but bear in mind that forgoing the finance discounts could cost you more ultimately.

3. Stock Volatility

One of the most common complaints is a delay in delivery of the vehicle after purchase.

This is oftentimes due to a lack of communication or even a miscommunication between salesperson and customer.

What do we mean?

Know whether the car you’ve booked is an ex-stock, incoming stock or indent vehicle.

If you’re unfamiliar, ex-stock is a car that’s arrived and waiting to be prepared once COE is secured.

Incoming stocks are, as the name suggests, on the way here somewhere over some body of water.

Indent vehicles are typically either ordered specifically upon request, or where a dealer has no visibility on when the particular vehicle would be shipped and arrive.

Simply put, if you are in a rush to get your car, book an ex-stock vehicle. Sometimes this means having to choose a colour that’s not your first choice.

A vehicle in stock also puts the dealer in a position of pressure, because they’ve got money locked up in the physical vehicle and want to get rid of it as quickly as possible, which means it’s easier to negotiate on these.

If you’ve decided to go with incoming stocks because you insist that black is nicer than white (in which case you’re in for a hard time with maintenance), then be sure to get a firm date as to when the vehicle is expected to arrive to avoid future dispute where you’re given excuses that shipments are delayed etc.

For indent stocks, most of the time the dealer would only be able to give you a best guess of how long stocks typically arrive, so be patient but also be aware of the estimated timeline.

4. Warranty Terms And Conditions

CCCS made headlines when they announced that consumers could go to a workshop of their choice to service their cars and still be able to enjoy their factory warranties.

Prior to this announcement, dealers had an iron grip on customer warranties where they would scare customers into servicing with them for the duration of the factory warranty.

People were afraid that if they went to a third-party workshop the dealer would “void their warranty”.

But hold your horses there.

Yes, CCCS might have made some headway into reducing the monopoly car dealers used to have; there are certain things that you must understand about warranties.

For instance, not all warranty advertised and accorded by car dealers are factory warranty.

Factory warranty is basically the manufacturer’s guarantee that manufacturing defects within the stipulated period will be rectified at its cost, provided the car is bought from an authorised dealer (read not parallel imported).

This is what CCCS is referring to – if you service your car outside of the authorised dealer, the factory warranty should still be accorded to you, provided your workshop didn’t cause the defect by not maintaining the car in the manufacturer’s specified way.

For example, if engine oil is stipulated to be changed every 6 months or 10,000 km but you only send your car for an oil change once a year because you’ve only travelled 5,000 km, you’re still in breach of the recommended servicing interval and could be reasonably held responsible for the damage to your engine.

That’s where your warranty could be put at jeopardy because you didn’t maintain the car according to specifications.

Another aspect is dealer-borne warranty.

A popular multi-brand distributor gives 10 years engine warranty on some of its brands.

But make no mistake – this is an extension to the manufacturers’ warranties of usually up to five years only.

Hence, this dealer may not be obliged to honour this warranty it bears at its own cost if you don’t maintain your car with them, since it’s considered a local warranty on top of the factory warranty.

5. Service Packages

Attractive promotions nowadays come with a good amount of free servicing included in the price.

While this is well and good, be sure to ask what is covered and what is not.

Different companies offer different things in their service packages.

While most are comprehensive and include at least fluids and filters, most of the time wear and tear components are not included.

These include things like brake components, tyres, wipers, bearings and so on.

Before you get too excited that maintenance for your car is being taken care of for the next three to five years, be sure to find out what else you will have to pay for during servicing, because services at different intervals require different things to be replaced / inspected, and additions could cost you more.

If your salesperson is not equipped to advise you on the technical service aspects, ask that they get a service advisor to explain the details to you.

Don’t get caught off guard after you’ve bought the car and kick up a fuss at the service reception because you thought that free servicing meant you didn’t have to pay a single cent.


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