So, before you go ahead and book a car, consider these first:

1. Positive cash flow

Given the current economic conditions, Mr Tony Ong, director at IPP Financial Advisers, cautions potential car buyers to ensure that they have a positive cash flow for at least one to two years first.

This means an adequate cash flow to cater for living and household expenses and the servicing of the car loan.

Mr Leong Chin Huah, a senior consultant at wealth management firm Providend, said that as a guide, the total amount of your gross income that goes towards servicing all loans, and not just the car loan, should be capped at below 35 per cent. Avoid having to dip into your emergency funds.

2. Costs of owning a car

Mr Leong said consumers should consider other costs on top of the purchase price of the car.

These include the car loan (if you take up a loan), regular maintenance costs, fuel charges, road tax, insurance premium, Electronic Road Pricing (ERP) charges and parking fees.

He noted that while car taxes were reduced by about 15 per cent recently, there are also more ERP gantries being erected.

3. Needs versus wants

Ask yourself if you really need a car or is it just to pander to your desires. After all, it is a big-ticket item.

Ms Tan of the MTA said you should consider if you and your family are going to need a car for the next five to 10 years.

'If so, then this is a good time to buy when prices are at a historical low,' she said.

'Consider also that the COE quota will definitely be cut come April next year, so all other things being equal, car prices should trend up from here.'

4. Determining the type and size of car

IPP's Mr Ong suggests using your budget and potential usage of the car to help determine the type and size of car you should get.

5. Buying from an established firm

In these times, it is important to buy from an established company, be it cars or any big-ticket item, said Ms Tan. This is because you want to be sure that your deposit or down payment is safe.

In particular for cars, you want to be sure that the distributor that sold you the car will be around to deliver on promises on repair and warranty services down the road.