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Car advice - buying/leasing

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gg2004
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Car advice - buying/leasing

Postby gg2004 » Thu, 04 Aug 2011 3:49 pm

Deciding whether to buy a car seems to require a Ph.D. for someone not familiar to Singpore laws, so I'm coming to this board for advice.

I'm getting a fixed amount as car allowance from my company, up to me what I decide to do with it. I have decided I need a car for sure (taxis/public transport don't fit our needs), so now the question is whether to buy or lease. I will be here for 3 years.

Someone helped me figure out the depreciation calculation, so it seems that if I buy a 2-3 year old car, depreciation + road tax + insurance work out about 30-35% cheaper than leasing on a monthly basis. So, I have 2 questions

1. Why do so many expats lease rather than buy, other than for the Hassle free experience
2. Since COE prices are extremely high right now, used prices are high, too. How should I factor in what happens after 3 years if COE prices are low and I need to sell my car- what am I missing in my calculation?

Thanks for your help

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Postby ScoobyDoes » Thu, 04 Aug 2011 5:14 pm

Well, I'm an expat and don't lease and I don't know where you get the idea that 'most' do as my experience is that most buy.

Best is to buy second hand, 1-2yrs old and something Japanese that is simple and cheap to repair as costs seem to be the major concern. From that, ignore what will happen to COE between now and the next three years. If your car has lost any value it is more than made up in the money saved between buying and leasing.
'When Lewis Hamilton wins a race he has to thank Vodafone whereas in my day I used to chase the crumpet. I know which era I'd rather race in.'

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Postby Strong Eagle » Thu, 04 Aug 2011 5:21 pm

I don't think that COE prices will be going down any time soon. Prices rose in response to a significant tightening of quotas, and they will probably be tightened again as road traffic continues to increase.

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Postby taxico » Thu, 04 Aug 2011 7:46 pm

IMO...

there're a good number of cars that are not being scrapped earlier (because a replacement is now pricier or because resale price exceeds PARF or...?) due to the higher priced COE of recent times.

when these "cheap" COEs expire, a corresponding number of certificates will gradually become available again, helping to meet some demand from the reduced quota.

hopefully by then, singaporeans will become accustomed to car prices circa mid-to-late 90s and there will be less buyers. i expect car prices to dip from last month's peak in a few years' time.

do your math and don't over pay to buy a car. strong has some sensible advice about how much to pay for a used car in another recent thread.

the value of a top dollar COE will always be there even if COE prices dip - just scrap your car to unlock that value!
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Postby gg2004 » Sat, 06 Aug 2011 12:37 am

ScoobyDoes wrote:Well, I'm an expat and don't lease and I don't know where you get the idea that 'most' do as my experience is that most buy.

Best is to buy second hand, 1-2yrs old and something Japanese that is simple and cheap to repair as costs seem to be the major concern. From that, ignore what will happen to COE between now and the next three years. If your car has lost any value it is more than made up in the money saved between buying and leasing.


That's a good perspective, but why do you say "don't worry about the COE" - do COE prices not impact used car prices much?

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Postby Strong Eagle » Sat, 06 Aug 2011 7:22 am

gg2004 wrote:
ScoobyDoes wrote:Well, I'm an expat and don't lease and I don't know where you get the idea that 'most' do as my experience is that most buy.

Best is to buy second hand, 1-2yrs old and something Japanese that is simple and cheap to repair as costs seem to be the major concern. From that, ignore what will happen to COE between now and the next three years. If your car has lost any value it is more than made up in the money saved between buying and leasing.


That's a good perspective, but why do you say "don't worry about the COE" - do COE prices not impact used car prices much?


COE prices impact used car prices a lot. The point was you don't need to worry about the COE because there is no evidence of it going down anytime soon. More people want to drive, less certificates available for auction.

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Postby ScoobyDoes » Sat, 06 Aug 2011 4:38 pm

That, and the fact OP said he would be here for three years so by buying a car that is 1-2yrs old, if he/she scraps it they can get half the COE vale back again anyway on top of the PARF......otherwise it will still be an option to sell the car on if that is better.
'When Lewis Hamilton wins a race he has to thank Vodafone whereas in my day I used to chase the crumpet. I know which era I'd rather race in.'



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Postby gg2004 » Sat, 06 Aug 2011 6:27 pm

ScoobyDoes wrote:That, and the fact OP said he would be here for three years so by buying a car that is 1-2yrs old, if he/she scraps it they can get half the COE vale back again anyway on top of the PARF......otherwise it will still be an option to sell the car on if that is better.


So does this mean that if I scrap it, I get a straight line depreciated value of the COE back as well as PARF? ALso, does this come as credit towards another car, or do I get cash I can carry out of the country...?

Thanks for all your help

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Postby taxico » Sat, 06 Aug 2011 9:51 pm

it used to be credit towards your next car, but i believe it can be made out in cash now...
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Postby Strong Eagle » Sat, 06 Aug 2011 11:00 pm

gg2004 wrote:
ScoobyDoes wrote:That, and the fact OP said he would be here for three years so by buying a car that is 1-2yrs old, if he/she scraps it they can get half the COE vale back again anyway on top of the PARF......otherwise it will still be an option to sell the car on if that is better.


So does this mean that if I scrap it, I get a straight line depreciated value of the COE back as well as PARF? ALso, does this come as credit towards another car, or do I get cash I can carry out of the country...?

Thanks for all your help


CASH!

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Encashment

Postby christay » Sun, 07 Aug 2011 10:28 pm

Your Parf and COE rebates are encashable, once you've deregistered the car, and submitted the necessary disposal documents to LTA.

The disposal documents are usually proof of entry of the car to a registered export zone (EPZ), Bill of Lading showing the car has left the country, or proof from the company that cut your car in half.

If you sell the car body to an exporter/dealer, make sure they agree to submit the necessary disposal documents for you, otherwise LTA will not release the refund.

Once the disposal documents are submitted, LTA will send you the refund in cheque form, usually within 2 weeks (unless you have registered your bank account with LTA for Giro, in which case, they will credit your bank account directly).

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Re: Encashment

Postby ScoobyDoes » Mon, 08 Aug 2011 10:19 am

christay wrote:If you sell the car body to an exporter/dealer, make sure they agree to submit the necessary disposal documents for you, otherwise LTA will not release the refund.



Actually, if you 'sell' the car to a dealer for export he should pay you there and then the known scrap value maybe less his 10% for costs.

Whilst you might lose out on 10% you get a very quick cash without the paperwork and can get on the plane a happy bunny.
'When Lewis Hamilton wins a race he has to thank Vodafone whereas in my day I used to chase the crumpet. I know which era I'd rather race in.'



SIR Stirling Moss OBE

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Re: Encashment

Postby christay » Mon, 08 Aug 2011 5:14 pm

ScoobyDoes wrote:
christay wrote:If you sell the car body to an exporter/dealer, make sure they agree to submit the necessary disposal documents for you, otherwise LTA will not release the refund.



Actually, if you 'sell' the car to a dealer for export he should pay you there and then the known scrap value maybe less his 10% for costs.

Whilst you might lose out on 10% you get a very quick cash without the paperwork and can get on the plane a happy bunny.


Yes, the logical thing to do is sell the whole thing (Paper + Body) to a dealer / exporter. The maximum going rate for the discount on the Paper now is about 1-1.5%, and it's always best to negotiate the body price separately first, the bargain for them to include the paper purchase. One cheque for everything, no admin headache as the pp states...

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Postby Scott_Tanya » Thu, 11 Aug 2011 11:52 am

hey guys, maybe i can get some help here too.

We have been relying on public transport/taxis but with 2 little kids we have decided a car will be much less hassle and obviously a better quality of living.

We are weighing up which way to go. as monthly costs are roughly the same

Option A) looking at 2009 model (European brand) for around 75k. its still under warranty less than 30k on clock so should be relatively maintenance free. 8 yrs left on COE depreciation of high 7s

Option B) looking at a 2006 model (Japanese brand) for around 45k. outside of warranty but still reasonable low kms for its age. 5 years left on COE for depreciation in the low 7s

We don't have a return home date as my contract is open ended. But like a lot of things nothing is certain in life. Obviously the older model can be scrapped quicker and you get to your loan/scrap value sooner.

We are leaning the 2009 but any reason that we shouldn't?

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Postby ScoobyDoes » Thu, 11 Aug 2011 12:02 pm

Scott_Tanya wrote:We are leaning the 2009 but any reason that we shouldn't?



European cars suck in their maintenance costs and requirements, unless (maybe) its a VW.

My office is pretty close to Performance Motors (BMW dealer/workshop) and you have no idea the amount of times I see the same cars coming in again and again..... and I don't just mean for a service.

Stick with something Japanese, workshops are ten-a-penny and you won't 'love' the car in any way (it can get depressing seeing how many scratches, dents and knocks will get on a monthly basis purely caused by inconsiderate car park manners).
'When Lewis Hamilton wins a race he has to thank Vodafone whereas in my day I used to chase the crumpet. I know which era I'd rather race in.'



SIR Stirling Moss OBE


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