If I scrap my car at 5-yr old, I only get back voucher?

• PoRen

  6 Oct 05, 22:17

  If I scrap my car at 5-yr old, I only get back voucher (equivalent to scrap value + remaining COE value) but not cash? And the voucher can be used to buy a new car, am I right?
• fondue

  7 Oct 05, 01:40

  When I scrap my car just before 5 yrs, I got
  
  1. 5k cash from car exporter
  2. Parf Rebate (voucher) about 50k = equivalent to 130% OMV + balance COE
  3. Road tax refund (cheque from LTA)
  4. insurance refund (cheque from insurance co)
  
  used voucher to buy new car but could only use 40k to offset new car so left with 10K voucher which was sold to dealer at 3% discount.
• wbucket

  7 Oct 05, 08:35

  Meaning there is a cap to how much you can use the voucher when getting the new car?
• PoRen

  5 Dec 05, 04:07

  Originally posted by fondue:

  When I scrap my car just before 5 yrs, I got
  
  1. 5k cash from car exporter
  2. Parf Rebate (voucher) about 50k = equivalent to 130% OMV + balance COE
  3. Road tax refund (cheque from LTA)
  4. insurance refund (cheque from insurance co)
  
  used voucher to buy new car but could only use 40k to offset new car so left with 10K voucher which was sold to dealer at 3% discount.

  I see. So the maximum that one can use voucher to buy new car is 40K I supposed?
  
  If I don't buy a NEW car, I will have to sell the 50K voucher at 3% discount right? I always thought the market charges 6%.
  
  If my loan is 40k, and the voucher is 50k, dealer will charge 3% of 50k OR 10k (50k voucher minus 40k loan)?
  
  Thanks in advance!
• tre

  5 Dec 05, 21:52

  Sorry if off-topic. Just want to enquire, if I buy a COE car will it be better to get one with a higher paper value (COE at 2012) but pay more...or get one with lower paper value at cheaper price. What's the pros & cons? Thanks..
• fondue

  6 Dec 05, 00:35

  [quote]Originally posted by PoRen:
  [b]
  
  I see. So the maximum that one can use voucher to buy new car is 40K I supposed?
  The parf paper (voucher) can only be used to offset ARF (additional reg fee) and COE, so the amount you can use depends on the omv of the new car and the COE. Mine is abt 40+k cos my omv is abt 25k and coe 15k. (note: current ARF is 110% of OMV)
  
  If I don't buy a NEW car, I will have to sell the 50K voucher at 3% discount right? I always thought the market charges 6%.
  WRONG. Mine is 3% cos I bought a new car from the dealer, and they took in the balance of my parf at 3% discount. If you only sell the parf paper, the discount varies from 3 to 7%
  
  
  If my loan is 40k, and the voucher is 50k, dealer will charge 3% of 50k OR 10k (50k voucher minus 40k loan)?
  I m confused by yr question. Maybe i give an example ;
  
  Car price 90k
  your parf paper 50k
  suppose your car only can use 40k parf, then dealer will take 3% off (50-40)k = $300.
  So efectively your 50k parf paper is only worth 49,700.
  
  Therefore, you still need to pay the dealer 90k-50k+300 = 40300.
  You can either pay cash or take loan or a combination.
  
  The 3% discount on parf paper has nothing to do with your loan.
  
  If you want cash back, you can take a higher loan (i.e.50k) and the bank will give you 9.7K (50k-40300) cash.
  
  
  
  
• fondue

  6 Dec 05, 00:40

  Originally posted by tre:

  Sorry if off-topic. Just want to enquire, if I buy a COE car will it be better to get one with a higher paper value (COE at 2012) but pay more...or get one with lower paper value at cheaper price. What's the pros & cons? Thanks..

  I think most COE cars got very little or no scrape value when you sell. What you get back is only the unused COE.
  
  If COE is 20k, you lugi 2.0k per yr.
  If COE 12k, you lugi 1.2k per yr.
  
  So what do you think ?
• tre

  6 Dec 05, 19:00

  Thanks for the tip fondue .... But I 've heard ppl saying like if you get into accident & need to scrap early, the high paper value will help..& also some other positive benefits (can't remember what already). Dunno how that works exactly also....I've always thought that the lower the COE price, the lower your depreciation & hence better value-for-money also.
  So that means those cars which renewed at high COE ie. $30k...cannot justify the higher price they charge? That means there's no benefit to the new owner whatsoever? Thanks a lot..
• PoRen

  9 Dec 05, 12:25

  Originally posted by fondue:

  [quote]Originally posted by PoRen:
  [b]
  
  I see. So the maximum that one can use voucher to buy new car is 40K I supposed?
  The parf paper (voucher) can only be used to offset ARF (additional reg fee) and COE, so the amount you can use depends on the omv of the new car and the COE. Mine is abt 40+k cos my omv is abt 25k and coe 15k. (note: current ARF is 110% of OMV)
  
  

  Thanks for all the information, fondue!
  
  Let's take this scenario:
  i. If I have money to settle all my present car loan, my car loan outstanding will be 0.
  And if I scrap my car at the 5-year mark, I get back 130% of OMV + porated COE -> $50k
  Then if I decide to buy a NEW car, tha amount that I can offset is 40k (taking yr example), meaning my paper is now worth (50k-40k) = 10k.
  And if I sell to the dealer, I will be charged 3% of the 10k -> $300.
  
  ii. If I do not settle my present car loan, which say is $40k.
  My paper after scraping car minus car loan (50k - 40k) will be 10k.
  This means I can use the 10k to offset the new car purchase (PARF), right?
  If this is true, it is not worth the while to have a 0 present car loan.
  
• fondue

  9 Dec 05, 22:13

  Originally posted by PoRen:

  Thanks for all the information, fondue!
  
  Let's take this scenario:
  i. If I have money to settle all my present car loan, my car loan outstanding will be 0.
  And if I scrap my car at the 5-year mark, I get back 130% of OMV + porated COE -> $50k
  Then if I decide to buy a NEW car, tha amount that I can offset is 40k (taking yr example), meaning my paper is now worth (50k-40k) = 10k.
  And if I sell to the dealer, I will be charged 3% of the 10k -> $300.
  
  ii. If I do not settle my present car loan, which say is $40k.
  My paper after scraping car minus car loan (50k - 40k) will be 10k.
  This means I can use the 10k to offset the new car purchase (PARF), right?
  If this is true, it is not worth the while to have a 0 present car loan.
  

  i. the 3% is when I bought my car from TC. Don't know whats the current rate now. Could varies with different dealer.
  
  ii. The bank will not take your parf. They only take cash. What you do with your parf is not their concern. IF you use parf to offset your loan, it'll prob be thru a middle man (e.g. 2nd hand car dealer), and you would lose the % in the process. In this case, maybe 5% of 40k+.
• PoRen

  13 Dec 05, 14:59

  Thanks for all the info, fondue!