This car was purchased and put on the road on 2007, probably around August. You have 6 years of COE left at about $1330 per year.Travailes wrote:I'm still confused !
I have seen an MPV for sale at $59,800.
COE states $13,301 - OMV $23,216
Registered Feb 2007.
If I keep the car for 2 years what can I expect back ?
Thanks
Respectfully, need to correct the above, this is not how one should look at the local value of a car. The market looks at car values this way:Strong Eagle wrote:This car was purchased and put on the road on 2007, probably around August. You have 6 years of COE left at about $1330 per year.Travailes wrote:I'm still confused !
I have seen an MPV for sale at $59,800.
COE states $13,301 - OMV $23,216
Registered Feb 2007.
If I keep the car for 2 years what can I expect back ?
Thanks
$13K + $23K = $46K. The difference between this and asking price of $60K is $14K or an addition $2.3K per year for the remaining COE time of 6 years.
Current COE is about $50,000 or $5000 per year. This car is being sold with a COE premium of $1330 + $2300 = $3600.
Other factors do come into play such as condition, but you really only need to see how much the COE costs per year after you pull out OMV from asking price.
To answer this question, let's do a bit of arithmetic as though the car were to be kept for the full COE, then scrapped.Travailes wrote:I'm still confused !
I have seen an MPV for sale at $59,800.
COE states $13,301 - OMV $23,216
Registered Feb 2007.
If I keep the car for 2 years what can I expect back ?
Thanks
Strong Eagle,Strong Eagle wrote:No disrespect taken, Chris. Good information.
Just to make it a little bit simpler... when you are looking at used cards (under 10 years old), it is easy to compare year on year costs for each car.
For example, you are looking at a car with a COE that expires in Aug, 2015, which means that there are 4 years left to drive the car before the COE must be renewed or the car scrapped.
The seller is asking S$25,000. The OMV is $10,000. You will get 55 percent of that back, or S$5,500 at the end of ten years (but not if you renew the COE). That's called PARF.
With a bit of arithmetic (25,000 - 5,500 = 19,500 / 4 = 4,875 per year), a figure referred to as 'depreciation'. Cars in roughly the same class should have roughly the same depreciation or cost per year, varying somewhat based upon mileage and overall car condition.
When it comes to buying a car more that 10 years old, there is no PARF refund. Thus, whatever you pay for the car divided by the number of remaining COE years is your cost per year.
Assuming all other factors are the same, except for age, the car mentioned above with 4 years left, should not sell for more than about $19,000 because there is no PARF refund at the end of the second ten years.
PARF cars and COE cars are those cars which are reaching the end of their COE life. For example, a car with one year COE left and an original COE amount of S$15,000 and a PARF value of $6,000 would sell for something above $21,000 because the new owner will be able to collect these rebates at the time the car is scrapped.
This is correct. I would like to add a caveat or 2:Strong Eagle wrote:To answer this question, let's do a bit of arithmetic as though the car were to be kept for the full COE, then scrapped.Travailes wrote:I'm still confused !
I have seen an MPV for sale at $59,800.
COE states $13,301 - OMV $23,216
Registered Feb 2007.
If I keep the car for 2 years what can I expect back ?
Thanks
a) Registered Feb 2007 means COE expires Feb 2017 which means from Aug 2011, car has 5.5 usable COE years left.
b) OMV of $23,216 means PARF of 55 percent of that amount or $12,769.
c) Total car cost is $59,800 - 12,769 = 47,301.
d) Per year cost is 47,301 / 5.5 = $8,551 per year.
Thus, without significant changes in the COE (up good, down bad), you can expect to sell this car two years from now for about $17,000 less or roughly $42,000/$43,000.
Users browsing this forum: No registered users and 14 guests