Buying a car is a major milestone for many people, especially for first-time buyers who can easily get overwhelmed by unfamiliar procedures and options. Should you look at cars first or apply for a loan? How do you set a budget without falling into financial traps?

This article will guide you through the key considerations to keep in mind when buying your first car, helping you understand the entire process from start to finish.

1. Set a realistic budget

When purchasing a car, there are factors to consider beyond the car price, including insurance, road tax, and potential financing costs, such as down payment, interest rates, and loan terms, as well as ongoing maintenance. Therefore, make sure you calculate how much you’ll need to spend on car-related expenses each month.

There are several car loan eligibility calculators in Malaysia that can help you estimate the costs before making a purchase. Through the Key Plus site, you can find the estimated monthly installment and total costs of purchasing your dream car.

2. Choose the Right Car for Your Needs

Flashy designs or tempting promotions can easily distract one when making a car purchase decision.

Start by thinking about your daily routine and priorities:

• Do you commute long distances? If so, fuel efficiency should be a top priority. 
• Do you have a family or frequently drive with passengers? You’ll need more cabin space and solid safety features. 
• Love road trips or outdoor adventures? Consider vehicles with ample boot space and off-road capability.

Once you’ve defined your needs, make a shortlist of 3 to 5 cars that match your criteria. Research their pros and cons, read user reviews, and compare ownership costs.

By doing this, you not only save time but also maintain focus during test drives, avoiding the influence of sales pitches or impulsive decisions.

Don’t just chase the trend! Select the car that works best for your journey.

3. Compare the Lowest Car Loan Rates

Financing your first car? Don’t just sign the first loan offer you get! Shop smart and save big. The interest rate you lock in today will impact your monthly payments and total cost for years to come. That’s why comparing rates is just as important as choosing the right car.

Different banks offer different interest rates for car loans. On platforms like Key Plus, you can compare loan offers from major banks, including Maybank, Public Bank, and others. It’s easy for you to secure the lowest interest car loan in Malaysia.

Key Factors to Understand Before Choosing a Loan:

Fixed vs Floating Interest Rates

Fixed rates mean your interest rate stays the same throughout the loan term, making it ideal for budgeting. Floating rates may start lower but can fluctuate in response to market conditions, which could result in higher payments later. Know your risk tolerance before choosing.

Down Payment Ratio

A larger down payment means you borrow less, which reduces your total interest cost. While 10% is the usual minimum in Malaysia, putting down 20% or more can significantly reduce your financial burden.

Loan Term (Tenure)

A longer loan term spreads out your monthly payments, but it increases the total interest paid over time. A shorter term means higher monthly payments but less interest in the long run. Balance what’s affordable monthly with what saves you most overall.

Need for a Guarantor

If your credit score is low or you’re new to the workforce, banks might ask for a guarantor, someone with strong credit who agrees to repay the loan if you can’t. It’s a serious commitment, so ensure that both parties understand the responsibilities involved.

4. Test drive and inspection

A test drive is more than just a formality; it’s a valuable chance to observe, experience, and determine whether a car aligns with your expectations. Regardless of a car’s appearance on paper or online, nothing compares to experiencing it firsthand.

Take the car on different road conditions to feel its performance and handling. It is recommended to test the car’s brakes, steering, engine noise, gear position, and other components. The car’s exterior, interior, engine, and tires also need to be inspected to ensure there are no obvious defects.

Whether it’s a new or used car, a thorough inspection can help you avoid costly surprises.

5. Get Your Car Insured

Before hitting the road, it’s essential to understand and secure the right type of car insurance for your needs.

In Malaysia, third-party liability insurance is mandatory by law, as it covers injuries or damages you cause to other people or their property. However, to protect yourself and your vehicle more comprehensively, many drivers opt for comprehensive insurance, which also covers your car in cases of accidents, theft, fire, or natural disasters.

To get the best value, don’t settle for the first quote you see. Instead, compare insurance plans from multiple providers to find the most cost-effective and suitable coverage.

Platforms like Keyplus make this process easy by allowing you to instantly check online car insurance quotes in Malaysia. You can view detailed coverage options, premiums, and even add-ons side by side, thus saving you both time and money.

6. Know The Procedure To Buy A Car

Before finalizing your car purchase, it’s crucial to understand the entire buying process to avoid any hidden surprises. Begin by reading the contract terms carefully to ensure you understand all terms and fees, including the deposit, price, payment method, and delivery time.

When you are buying a car for the first time in Malaysia, you’ll typically need to prepare the following documents:

• NRIC (MyKad)
• Valid driving licence
• Payslips for the latest three months
• Bank statements for the latest three months
• Income tax or Employees Provident Fund (EPF) statement

Once the purchase is complete, keep all important documents safely stored. These include:

• Purchase agreement or contract
• Payment receipts
• Car invoice
• Loan approval letter (if applicable)
• Car insurance policy

These documents are not only important for warranty claims, servicing, or future resale but may also be required for road tax renewal or insurance updates.

7. Things to Note After Buying a Car

Familiarise yourself with your new car

• Read the owner’s manual to understand your car’s key features, functions, and recommended usage.
• Learn how to inspect essential components, including engine oil, tire pressure, coolant level, and dashboard warning lights.

Follow a regular maintenance schedule

• Stick to the manufacturer’s recommended service intervals (usually every 5,000 to 10,000 km).
• Regular maintenance helps prevent costly repairs, keeps the vehicle running efficiently, and ensures the safety of the driver and passengers on the road.

Practice safe and responsible driving

• Always observe traffic laws and avoid reckless driving.
• Abide by speed limits, wear seatbelts, and stay alert, especially if you’re a first-time driver.
• Traffic violations not only risk your safety but can also lead to summonses, fines, or demerit points on your license.

Make your monthly payments on time (if under loan financing)

• Avoid overdue payments, as late repayments can negatively impact your credit score, affecting future loan approvals or credit applications.
• Consider setting up auto-debit payments or monthly reminders to ensure you don’t miss a due date.

Here are a few helpful tips for first-time car buyers in Malaysia. Buying your first car in Malaysia is an exciting milestone, but it’s also a major financial and lifestyle commitment. From setting a realistic budget and choosing the right car to securing the best loan and insurance deals, every step requires thoughtful planning.

Remember to:

• Understand your needs before selecting a car
• Compare financing and insurance options to get the best deal
• Carefully review contracts and prepare all necessary documents
• Test drive and inspect the car before confirming your purchase
• Maintain your car regularly and drive responsibly
• Make timely loan payments to protect your financial future

With the right preparation and mindset, your car-buying journey can be smooth, rewarding, and stress-free. Let this guide serve as your starting point for responsible car ownership and safe driving.