Buying a car with 100% cash and no debt

It's the second day of Chinese new year and I hope all of you had a wonderful time with your loved ones especially your family members. The past few days I've been hanging out with my family and relatives. Its a good time to catch up and every Chinese New Year, it always seems to be a family gathering event.

My relatives seem to be getting richer every year. Recently, one of my uncles bought a new car paying $140k in cash. Its a higher end car but well they are rich enough to afford it. I also had the chance to ride in it. Most of my relatives have been paying full cash for their cars ever since many years ago. I am not very familiar with the interest rates of car loans in Singapore as i do not own a car but I did a rough check online for car loan rates. UOB indicated that they are offering an effective interest rate of 6.31% p.a for a five year loan tenure for new cars. Wow, 6.31% p.a is rather high. Am I seeing it correctly? Maybe those who have experience in buying a car can advice?

If interest rates are indeed at the 6% range p.a, then it makes sense to pay for the car in cash. If not, the interest that is compounded can amount to quite a substantial amount. It looks like what my uncle did was a wiser choice.

This brings me to the point that if you cannot afford a car, do not buy one. Period. Why succumb yourself to massive debt just to own a car? Paying monthly petrol, parking, insurance,  road tax is already taxing enough. With monthly loans to service also, it'll be an even greater burden. Think wisely before buying one. Are you rich enough to pay for the car? After paying, are you still able to live your life indefinitely? A wrong choice will lead to misery afterwards.

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