When I brought up yr point to a friend, he ask me few questions. If the second hand is only cheaper than the new car by few K, think no one will buy the second hand car, then finally the second hand car will be scrap. by scraping the car, the owner will be loosing quite an amount too, maybe loosing the same amount as a new car buyer but dont enjoy driving a new car. Is this possible??Originally posted by fondue:I think old car's depreciation curve is more linear. Once you calculate the annual depreciation, the actual differ between first few yrs is only slightly more than the last few yrs. When you sell, that is when you benifit from the higher COE.
For new cars, the depreciation for 1st few years is much higher. Even if it cost only 3-4k more than a 2nd hand car, when you try to sell it after 2yrs, you might end up getting less than the same 2nd hand car that you use to compare.
hence, if you are the type who likes to change cars every 2 yrs, then buying 2nd hand car does limit you losses thru depreciation.
but if you are the old faithful type, then a new car would be a good option.
I think this is true. Second hand car seller will benefit if the new car price is still the same high as few years ago. For example, 4 years ago, a 2-3 years old Nissan Sunny was 20k lower than brand new Nissan Sunny. People might still choose second hand one.Originally posted by coolblue6699:When I brought up yr point to a friend, he ask me few questions. If the second hand is only cheaper than the new car by few K, think no one will buy the second hand car, then finally the second hand car will be scrap. by scraping the car, the owner will be loosing quite an amount too, maybe loosing the same amount as a new car buyer but dont enjoy driving a new car. Is this possible??
The interest part is really interesting. Yaloh, anyone calculates that? Maybe interest rate is higher.Originally posted by coolblue6699:Secondly, if I am taking a loan, higher paper (higher COE) will cause a higher interest payable cos I need to load more. Am I right or I have miss out sometime??
I have a couple of friends were being offered slightly over they paper+body for their 1.5-2 yrs old Japanese car. But on newspaper, all selling so near to new car price!!!
For those who sold to the dealer really let the dealer chop chop chop into eight pieces!!!
This is my understanding ... let me break it down. Same brand and model.Originally posted by findingnewidea:heard now only got 10k second hand car transactions, compared to last year (all time low by then) 30k. As this year has few months left, it is predicted to break the all time low record.
the second hand dealers talked something about high COE of old car gives better sense of security. i don't understand what was he saying.
can anyone help me?
i have this feeling that second hand owners don't want to suffer much loss, so they just slightly lower the car price to remain competitive with new car. However, i feel it is not worthy. A price of 3-4k difference, getting 2-3 year old car is not worthy. true? some calculation is of course welcome.
thank you
high COE dont gif u higher security. dont listen to those bullshit. the higher e COE the more ur depreciation is every year.. jus do ur sums and u will know. the lower ur COE the better. but of coz e purchase price has to be low too..Originally posted by findingnewidea:heard now only got 10k second hand car transactions, compared to last year (all time low by then) 30k. As this year has few months left, it is predicted to break the all time low record.
the second hand dealers talked something about high COE of old car gives better sense of security. i don't understand what was he saying.
can anyone help me?
i have this feeling that second hand owners don't want to suffer much loss, so they just slightly lower the car price to remain competitive with new car. However, i feel it is not worthy. A price of 3-4k difference, getting 2-3 year old car is not worthy. true? some calculation is of course welcome.
thank you
Bro it depends ... depreciation can sometimes look attractive but really its not. Its tied to how long you wanna own the car.Originally posted by jonathan_n80:high COE dont gif u higher security. dont listen to those bullshit. the higher e COE the more ur depreciation is every year.. jus do ur sums and u will know. the lower ur COE the better. but of coz e purchase price has to be low too..
Ok your car is 37K in paper value.Originally posted by sunnyMAN:wow..very comprehensive..good job!!
however, i still have a question...so say my paper value now is $37 (2002 Sunny)..if i were to change to a new car..the $37k can only be used to cover the ''paper value'' of the car i want to buy issit?? Which means it's not worthwhile since papervalue of a $60K car now is ard $28-30k right??
and if im on a 7 yr loan of 40K since jan2002..how do I calculate the loan structure for a new car??
For eg:
cost of car: $62k
paper: $29k
$62k - $29k = $33k
so this is the amount of money i have to pay right? And say i'll take a loan of $25k over 7 yrs..wouldnt I be paying lesser than wad I have to pay monthly now?
true, but 2nd hand car dealers will adjust the selling price of a car with low COE so that the depreciation is on par or just slightly lower than a similar car with higher COE, but if you take away the COE component, you'll find that you are actually paying more for the car with COE.Originally posted by jonathan_n80:high COE dont gif u higher security. dont listen to those bullshit. the higher e COE the more ur depreciation is every year.. jus do ur sums and u will know. the lower ur COE the better. but of coz e purchase price has to be low too..
Well, I am sure the 2nd hand car sells for less than new car, so your absolute loan amont should be less. The interest may be slightly higher, buy the loan period will be shorter.Originally posted by coolblue6699:Secondly, if I am taking a loan, higher paper (higher COE) will cause a higher interest payable cos I need to load more. Am I right or I have miss out sometime??
yap if the owner wan to sell a low COE car it fetchs lower value but thats basically because the owner paid a low price for e car too.. IMO i think e price for 2nd hand car should be priced jus slightly above paper value. else it wont be attractive .. esp e COE car.Originally posted by fondue:true, but 2nd hand car dealers will adjust the selling price of a car with low COE so that the depreciation is on par or just slightly lower than a similar car with higher COE, but if you take away the COE component, you'll find that you are actually paying more for the car with COE.
In this situation, you save a bit on dep. if you drive over the remaining life-span. If you sell it earlier, you'll find that t fetchs a lower price because of the low COE.
So, it all boils down to how good you are at bargining, and it helps to buy direct from owner cos chances are, used car dealers will offer them the same low price.
Originally posted by sghotimports:
This is my understanding ... let me break it down. Same brand and model.
[b]New Car Purchase Price : S$60K
Actual Paper Value (this is very important) : PARF + current COE + Body Value = S$13000 + S$15000 + S$5000 = S$33K
Your New Car Purchase + Interest will cost you = S$75K (est)
Your Negative Equity = S$75K - S$33K = S$42K
In other words ... your new car is only valued at 33K on its first day you drive out of the showroom. You owe bank S$75K. If anything happens (accident / stolen) ... you will have to pay the bank that 42K you still owe them.
To breakeven with a new car ... you need at least 6 yrs of instalment payments. Meaning no new car for you for 6 years, you have to stick to this new car you bought for 6 long years.
2nd Hand Car Purchase Price (2003 model) : S$50K
The first owner bought the car likely at 70K plus, with added interest will cost him about S$80K for the car.
Actual Paper Value (this is very important) : PARF + current COE + Body Value = S$13000 + S$31000 + S$2000 = S$46K
Your 2nd Car Purchase + Interest will cost you = S$65K (est)
Your Negative Equity = S$65K - S$46K = S$19K
The first owner lost about 80K - S$46K = 34K in 2 yrs of ownership ... the car is valued at 46K on your day of purchase. You owe bank S$65K. If anything happens (accident / stolen) ... you will have to pay the bank that 19K you still owe them.
To breakeven with a new car ... you need at least 3 yrs of instalment payments.
Thus 2nd hand car is a safer buy cause you owe bank less monies.
1) You can change to another car in 3 yrs vs 6 yrs for a new car
2) You owe a much lesser amount with the bank. Should anything happen, 19K is easier paid off than 42K
3) The brunt of the loss is paid by the 1st owner.
Thats the "safety" feature most 2nd hand car dealers are talkin about.
[/b]
there is always room for bargaining. Its buyer's market now, so if you know the export value, most dealers would consider selling if the offer is higher than export value.Originally posted by findingnewidea:This sounds good, but nowadays 2nd car is only selling at 2-3k lower than new car price. It is not 10k as mentioned in the calculation.
Dude ... what I am giving you is only as an exampleOriginally posted by findingnewidea:This sounds good, but nowadays 2nd car is only selling at 2-3k lower than new car price. It is not 10k as mentioned in the calculation.
Originally posted by sghotimports:
Dude ... what I am giving you is only as an example
Now ... dont look at the 10K diff or lesser , you'll make a huge rookie mistake there.
Look at the Bold & Italic Values
New Car Purchase Price : S$60K
[b]Actual Paper Value (this is very important) : PARF + current COE + Body Value = S$13000 + S$15000 + S$5000 = S$33K
2nd Hand Car Purchase Price (2003 model) : S$50K
Actual Paper Value (this is very important) : PARF + current COE + Body Value = S$13000 + S$31000 + S$2000 = S$46K
See ... even the diff is only 2k or 3k, the 2nd hand car (46K) has a higher Scrap Value than the New Car (33K)[/b]
Oh simple ....Originally posted by coolblue6699:Have a question, during the weekend my friend and I went to see a used S40T5, is a 2/05 car (10 months) asking 109K OMV 36k COE 23K. no spoiler, no solarflim, got xenon light, car phone.
New car list price at 132K and after all discount blar blar blar is 125K with OMV 35K. It also come with 6 mths road tax, free solar flim, low spoiler and potential 2-3K cash discount from the manager. No xenon and car phone.
I feel that 109K is way too ex, any suggestion on what is the reasonable price for the used car?? 90K?? 95K?? 99K?? My friend looking at this car. No car to trade in.
thanks for any remark.
No worries .... email [email protected] if you need to talk to me in private.Originally posted by findingnewidea:sghotimports bro, thanks for sharing
i have a really newbie question here. If I buy a brand new car and use it for 10years. my understanding is COE value will become 0. How about PARF value? Body value?
If COE becomes 0, then it will mean i better buy a brand new car and drive it for 10 years, rather than buying a second hand car (2-3year) and use for 7-8 years and still end up with $0 COE. Am I right?
Most definitely, but again depends on how you look at it. If its a need, then its not a waste of money cause it fill a need. If its a want, then probably lose money.Originally posted by vindicated:Lol!
Buy a car?
Waste money only!!
Thanks ... just helping out. Yeah I am a new car agent. I try to help out as much as I can and know, just like how I assist my clients. For me, client rapport is very important, I dont wanna sell to a client if I got this feling that he is gonna end up in trouble from my purchase in years to come. Yeah believe it or not, I'd encourage him not to buyOriginally posted by findingnewidea:sghotimport bro, you are awesome. you are one the few guys can really answer my question here.
looks like you are a car agent, never mind, you know the best the market mechanism.
let me try to describe my scenario to you.
i am thinking to buy a car. i don't really care about stylish. i want practical and affordable + minimum loss
i need the car for work. i will be driving the car heavily - maybe one day will be more than 60km (i guess you might know I want to take fuel consumption into consideration)
the next thing is performance or stuff versus value ratio. A cheap car with lousy everything means bad ratio too.
like what you said, i might be selling off my car in 5 years time. But, the problem is I might not buy another car, as I intend to leave Singapore. I know this will be a key point to the decision. Can you help me to analyse, if i don't buy another new car after 5 years, or if i want to buy another car after 5 years, or if i want to keep the car for 10 years - total 3 situation
basically, i want to know whether a brand new car is good for me, or a second hand car is good for me. If 2nd hand car is good, must buy old scheme car or new scheme car? let's take this is the first to answer before we move to the next relevant question.
thank you thank you.
Alright I've paid for 4 yrs of my installment which equates to $31 248..my loan plus interests amt to $54 600 (thereabout)Originally posted by sghotimports:Ok your car is 37K in paper value.
New car purchase scenario :-
1) I ask you .... I take in your car @ 37K.
2) How much you still owe finance ?
If nothing ... then 37K is yours to keep or you put in a 10K downpayment and keep 27K. If you owe finance more than 37K .... Rule 78 and Penalty for Early Redemption ..... then you must top up the diff. Sometimes this amount can be as high as 20-30K.
3) 40K since 2002. Check with your finance how much you still owe them. Then calculate the diff with your present Sunny. Like I say ... if your sunny is fully paid, no worries liao. Use the full paper, if not .... better to check.
For eg: (salah liao)
cost of car: $62k + interest = S$70K (example)
paper: $29k
$70k - $29k = $41k
In my line ... I see hordes of people comin in to change car after 2 yrs of ownership .... only to discover what kinda shit they got themselves into when they purchased their new car 2 yrs ago.
Most paiseh ... walkout of showroom knowing they cant buy a car for at least 4 more years. That 31K COE they bought their car with 2 yrs back have "locked them in".