Smart strategies for car buying in today's market

[SINGAPORE] Buying a car is among the most significant financial commitments many people will make. And with that decision often comes a flood of well-meaning advice from coworkers, relatives, friends—and, of course, TikTok’s self-styled financial “gurus.” While some tips have merit, others are outdated myths disguised as tried-and-true wisdom.

Many of these long-held beliefs are rooted in how the automotive industry functioned decades ago. Today’s market, however, demands more strategic thinking—driven not only by modern advancements but also by the escalating cost of living felt around the world.

Several of the most persistent car-buying myths were dissected, along with practical ways to avoid falling into their traps.

Tech-Savvy Car Shopping: The New Normal

The impact of technology on the car-buying experience is profound. Online resources and mobile apps now arm consumers with detailed information to help them make informed decisions. Platforms like Edmunds, Kelley Blue Book, and TrueCar provide expert reviews, price comparisons, and valuation tools, equipping buyers with insights that make it easier to recognize a fair deal when they see one.

This digital transparency allows shoppers to enter negotiations with a strong understanding of what a vehicle should cost—and where they might find the best offers.

The “Always Pay Cash” Misconception

For decades, the idea that "cash is king" has shaped how buyers approach major purchases. But in the context of car buying, this can actually work against you. Telling a dealer you intend to pay in cash can undercut your bargaining power.

Why? Because dealers often earn additional income through financing—specifically via a "dealer reserve," which adds 1–2% to the bank’s interest rate when buyers finance through the dealership. This markup means financing is often more profitable for them than a straight cash transaction.

Moreover, financial conditions today are vastly different from years past. With variable interest rates and shifting economic trends, blanket advice to always pay cash doesn’t hold up. Buyers with solid credit can often benefit more from financing—whether it’s taking advantage of low-interest rates or retaining liquidity for other investments.

To stay in control of the deal, prioritize negotiating the total “out-the-door” price—including taxes and fees—before discussing how you intend to pay. Once the final cost is set, you can explore financing through the dealer, seek a loan independently, or opt to pay in full.

In some cases, financing can actually lead to savings—particularly when automakers offer 0% APR promotions. These limited-time deals let buyers borrow money without paying interest, which can make financing cheaper than an all-cash payment. Just be sure to review offers carefully and avoid being upsold on extras you don’t need.

Also consider the broader financial picture. While paying cash may eliminate debt, it can also drain your savings and reduce your financial flexibility. A well-structured financing arrangement could allow you to manage your budget more effectively and retain funds for emergencies or other priorities.

“Dealer Financing Is a Scam” — Not Always

It’s tempting to dismiss dealer financing as a rip-off, but doing so could mean overlooking real opportunities to save. Automakers frequently run special promotions through dealerships that offer interest rates as low as 0% or 2% for qualified buyers—often lower than rates offered by banks or credit unions.

That said, dealerships don’t always advertise these deals prominently—especially if they sense a buyer hasn’t done their homework. That’s why arriving with a pre-approved loan from your bank or credit union is a smart move. It provides a benchmark the dealer must beat to earn your financing business.

Additionally, dealers often have established relationships with lenders that can result in exclusive offers and incentives not available elsewhere. Taking advantage of these partnerships can sometimes unlock more favorable terms than you might expect.

Smarter Shopping, Better Value

The automotive landscape is shifting quickly, and buyers need to keep pace. Whether it’s deciding how to pay or choosing a financing route, the smartest car buyers are those who stay informed, challenge outdated beliefs, and make data-driven decisions.

In the end, a successful car purchase comes down to preparation, strategy, and a willingness to think beyond the conventional. By leveraging technology, understanding the financial nuances, and staying ahead of dealership tactics, consumers can drive away with a deal that truly fits their needs and budget.