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Questions about buying 2nd hand cars

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queenie71
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Questions about buying 2nd hand cars

Post by queenie71 » Sun, 26 Jul 2009 4:10 pm

we're moving to Singapore later in the year and am doing a bit of research to work out whether there is a way to drive a decent car without totally breaking the bank...?

a few specific questions:

- in many countries depreciation is not linear and cars tend to lose eg 20% in yr1, another 15 in yr 2, 10-15 in yr 3, and then after that tthe depreciation becomes more manageable, say below 10% per year; so would like some advice on this in Singapore - is there a sweet spot in terms of number of years where the bulk of depreciation has taken place and it starts being more reasonable?

- on some 2nd hand website, it indicates an 'annual depreciation' figure? - is that an 'official' figure, or an average suggested by the trade, or an owner's estimate? how should we look at that figure?

- how are prices for 2nd hand cars set?

- on 2nd hand websites, some similar cars indicate a very different COE amount - i understand that is because the COE varies over time, but am ot clear what difference it makes to the buyer..? is it better to buy a car with a high or low COE..?

and any other tips woudl be greatly appreciated!

thanks

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Post by hg » Wed, 29 Jul 2009 9:48 am

I was in your shoes a month ago and did buy a 2nd hand car. So I can answer some of your questions based on whatever research I did.

The Car market in SG seemed fairly transparent to me. The trick is to find an agent/ dealer whom you can connect with. There is one very good website for listings -> http://www.sgcarmart.com/main/index.php This site lets you filter based on many criterion and you can get a very good idea of the price band for any car/ year combo.

2-3 year old Cars in SG will be the best bet. I bought a 3.5 year old basic car at a very decent deal from an agent who I really liked. The depreciation is a very published number and totally transparent.

Annual depreciation figure you see in 2nd hand websites can be believed I guess (Although I will know for sure when I resell after 2 years :-) !!). However after 5+ years of use many people find it better to scrap than to resell (The govt will give you back some part of registration and COE cost when you scrap)

There is not fixed formula for 2nd hand pricing as one would expect. I have seen as much as 4-5K difference is very similar cars. Research the listings and you will get to know the band anyway.

COE cost will directly impact the resell value. As I said COE amount gets back to you (pro-rated) so higher the COE, higher is the intrinsic value (or scrap value) of the car. This means higher COE cars should fetch slightly higher resell value too.
Last edited by hg on Wed, 29 Jul 2009 11:39 am, edited 1 time in total.

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Post by sundaymorningstaple » Wed, 29 Jul 2009 10:15 am

It fine to post link to URL here unless they are URL belonging to one of the local media's parent company or subsidiaries. The only links we do not allow are advertising links (this means you have a financial interest in the link). A recommendation or information link if fine to post. In fact we encourage "recommendations" here. It's one of the reasons we exist. Recommendations can only come from satisfied users not owners.

So feel free to edit to add the link. As long as it's not a Real Estate Link - none are allowed, recommendation or otherwise as this board is graciously hosted by a Real Estate Portal and like a Toyota Dealership, you wouldn't let a Ford Salesman sell his cars from your lot. :wink:

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SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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Post by hg » Wed, 29 Jul 2009 11:42 am

sundaymorningstaple wrote:It fine to post link to URL here unless they are URL belonging to one of the local media's parent company or subsidiaries. The only links we do not allow are advertising links (this means you have a financial interest in the link). A recommendation or information link if fine to post. In fact we encourage "recommendations" here. It's one of the reasons we exist. Recommendations can only come from satisfied users not owners.

So feel free to edit to add the link. As long as it's not a Real Estate Link - none are allowed, recommendation or otherwise as this board is graciously hosted by a Real Estate Portal and like a Toyota Dealership, you wouldn't let a Ford Salesman sell his cars from your lot. :wink:

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Hmm....today must be one of your I-am-in-great-mood day :-) Thanks for the permission anyway - I have edited my post.

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Post by sundaymorningstaple » Wed, 29 Jul 2009 12:23 pm

I'm am always in a good mood. I'm just opinionated. :P
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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Post by ceej1979 » Thu, 03 Sep 2009 10:19 pm

There is next to no second hand car market in Singapore. Dealers often just scrap any cars they receive as part exchanges on new cars.

There is no real affordable way to buy a car in Singapore. You’ll pay 200% (of what it would be in the west) on any car you buy.

You’ll also have to pay a one off lump sum fee just for the right to buy the damn thing.

The key to happy car buying in Singapore is to just not bother. You’ll save a lot of time and money just riding the train to work.

I’m unsure why you even want to buy a car anyway? Have you seen how many crashes happen on Singapore roads!?

Seeing a car parked, on the wrong side of the road, on double yellow lines, in the middle of the road, on a junction – night after night near my home – and it not even getting a parking ticket, tells me all I need to know about driving a car over here!

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Post by ksl » Thu, 03 Sep 2009 11:57 pm

ceej1979 wrote:There is next to no second hand car market in Singapore. Dealers often just scrap any cars they receive as part exchanges on new cars.

There is no real affordable way to buy a car in Singapore. You’ll pay 200% (of what it would be in the west) on any car you buy.

You’ll also have to pay a one off lump sum fee just for the right to buy the damn thing.

The key to happy car buying in Singapore is to just not bother. You’ll save a lot of time and money just riding the train to work.

I’m unsure why you even want to buy a car anyway? Have you seen how many crashes happen on Singapore roads!?

Seeing a car parked, on the wrong side of the road, on double yellow lines, in the middle of the road, on a junction – night after night near my home – and it not even getting a parking ticket, tells me all I need to know about driving a car over here!
They even park on Zebra crossings outside of school :lol: If the government thought about it, they could start earning a lot of revenue on the bad driving! 8-) I wonder if they will let the public freelance on a 50% 50% basis, with camera and fixed penalities....

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Post by ceej1979 » Fri, 04 Sep 2009 1:04 am

ksl wrote:
ceej1979 wrote:There is next to no second hand car market in Singapore. Dealers often just scrap any cars they receive as part exchanges on new cars.

There is no real affordable way to buy a car in Singapore. You’ll pay 200% (of what it would be in the west) on any car you buy.

You’ll also have to pay a one off lump sum fee just for the right to buy the damn thing.

The key to happy car buying in Singapore is to just not bother. You’ll save a lot of time and money just riding the train to work.

I’m unsure why you even want to buy a car anyway? Have you seen how many crashes happen on Singapore roads!?

Seeing a car parked, on the wrong side of the road, on double yellow lines, in the middle of the road, on a junction – night after night near my home – and it not even getting a parking ticket, tells me all I need to know about driving a car over here!
They even park on Zebra crossings outside of school :lol: If the government thought about it, they could start earning a lot of revenue on the bad driving! 8-) I wonder if they will let the public freelance on a 50% 50% basis, with camera and fixed penalities....

Parking, in the middle of the road, on the corner of a junction, is pretty common, where I live. As is parking on double yellows.

You're right - they'd make a fortune if they clamped down on parking laws. In the UK, where I'm from, you get fined $200, for having your bumper hanging over a double yellow zone - let alone park on it!

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Post by Strong Eagle » Fri, 04 Sep 2009 9:20 am

ceej1979 wrote:There is next to no second hand car market in Singapore. Dealers often just scrap any cars they receive as part exchanges on new cars.
Wrong - There is a good second hand market.
There is no real affordable way to buy a car in Singapore. You’ll pay 200% (of what it would be in the west) on any car you buy.
True about the 110 percent registration tax, but a used car takes a plunge in value just like everywhere else so deals (relative to the 200 percent) can be found.
You’ll also have to pay a one off lump sum fee just for the right to buy the damn thing.
Wrong. Used cars are sold with transferable COE (Certificate of Entitlement that lets you DRIVE it, not buy it). COE figures into the price. For cars that are 10 and more years older, the COE is often half the value of the car, and if you are buying a car you need a sweet deal if the COE is going to expire in a year or two. Typical COE auction prices right now - $16,000 for a 10 year COE.
The key to happy car buying in Singapore is to just not bother. You’ll save a lot of time and money just riding the train to work.
True to some extent but try to find a taxi in the rain. And if your work requires you to travel to clients a car is just about a necessity. Unless you own a motorcycle.
I’m unsure why you even want to buy a car anyway? Have you seen how many crashes happen on Singapore roads!?
Singapore is a lot safer than many places and it is reflected in the insurance rates as compared to many US cities of comparable size.

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Post by simonL » Thu, 10 Sep 2009 12:17 am

owning a car in Singapore is expensive! Please take into consideration also road tax, insurance, parking charges, ERP, petrol!

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Post by ksl » Thu, 10 Sep 2009 1:07 am

sundaymorningstaple wrote:I'm am always in a good mood. I'm just opinionated. :P
I tried to say that line above and i stuttered, it must be my Lancashire accent! :P :wink: But after the second drink it was easy to say it!

The price here is about the same as Denmark, although the infrastructure is 100 times better than Denmark...I still find the car a god send, when I want to do anything, almost instant aircon, without walking. I say if you can afford it buy one, if not don't buy, one can easy adapt without one. If your plan is for the long haul buy one. 3 year tour not worth it. Although there are many parallel imports about too, so those prices that you find good deals, may just be the grey area cars.

There is actually a good second hand market operating in Singapore most being low mileage cars, though spotting the right offers and spotting a repaired accident car takes an experienced person to spot. The average Joe would never see a difference, the car industry is no different from other places around the world, Garages are good and bad, you have to be able to spot the con, sales is all about breaking the ice, chit chat, the con goes a little step further to convince you, you are getting the best deal around, nothing is free, guarantees you pay for, it's all in the price. And even if something does go wrong, if he's a con, you have been conned! There are genuine people in the trade, but a salesman is there to sell, close the deal, don't expect him to be on your side! Unless he goes out of the way, to convince you in writing.

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more questions about the market and weekend plates too!

Post by queenie71 » Fri, 11 Sep 2009 5:19 pm

Thanks for all the replies.

Have been looking on the web and seen ok cars for our budget but still don't fully understand the "rules".

SO, there's a SALE PRICE.
Then, there's a COE - ok that's what they paid for the COE. That just carries over to the new buyer - correct?
Then there's an OMV open market value - is that the OMV at the current time of the ad? Is it set in stone somehow? Does it change month to month? year to year?

I thought then that the SALE price should be OMV + COE - but it's not!

Lastly, we're thinking of buying a car and registering for weekend only. How does this affect the purchase price or does it not? Maybe it only affect the road tax???

If you're allowed to on this forum, can you pls PM me on good second hand dealer - most important is car which has had no accidents

HELP!

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Post by queenie71 » Fri, 11 Sep 2009 5:22 pm

Sorry me again. another question.

Is it better to buy a more premium car which will somehow retain more value pro rata at resale or a cheaper car from the outset?

If it were not for a cashflow issue, which is better for losing LESS money in the long run?

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Post by jpatokal » Sat, 12 Sep 2009 2:33 pm

queenie71 wrote:Is it better to buy a more premium car which will somehow retain more value pro rata at resale or a cheaper car from the outset?

If it were not for a cashflow issue, which is better for losing LESS money in the long run?
Assuming you're talking about a new car, the answer is obviously the cheaper car. The usual rule of thumb is that a car loses 20% of its value the moment you tear off the shrink wrap, so just apply this to two hypothetical cars:

$50,000 new -> $40,000 used -> loss $10,000
$100,000 new -> $80,000 used -> loss $20,000

And even if your Mercedes Snob-Class were to retain its value better (15% drop) while your Chinese-made Geely Hairproduct loses 25%, you'd still be better off with the cheapo:

$50,000 new -> $37500 used -> loss $12,500
$100,000 new -> $85000 used -> loss $15,000
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Post by onlyvictor » Wed, 16 Sep 2009 11:42 am

other than losing money on the paper, I.e the OMV and COE depreciates linearly each year, also need to consider the value you can get for your car body when you sell. Typically, Toyotas represents the best value no matter what model, otherwise luxury cars like BMW and Mercedes are also good retainer of value, though they are much more expensive to begin with. Try not to get the likes of hyundai, kia, fiat, puegeot or ford for they are practically worthless in the resale market. Honda are a good bet too!

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