Originally posted by kmkm:Also a newbie here...
If you intend to drive for a short 2-3yrs, resale is more worthwhile provided you buy one that is no older than 3yrs old. Upon resale or scrap 2-3yrs later, you will likely get back more rebate value compared to a new car.
I believe the previous post was saying getting one that's isnt more than 3 years old.Originally posted by canaan:Also a newbie here...
What is the reason why it is recommended to buy a resale car that is more than 3 years old? If someone is offering to sell me his car that is 2 years old, compared to looking for one that that is >3 years old?
Well, another question that I've always been wondering...is it more worth it to buy a 2 year old car (when COE were much much higher), or consider a similar model that is brand new?
Thanks in advance!
more than 3& half year the car deprecision rate is different formula.Originally posted by canaan:Also a newbie here...
What is the reason why it is recommended to buy a resale car that is more than 3 years old? If someone is offering to sell me his car that is 2 years old, compared to looking for one that that is >3 years old?
Well, another question that I've always been wondering...is it more worth it to buy a 2 year old car (when COE were much much higher), or consider a similar model that is brand new?
Thanks in advance!
Originally posted by zaxis:
more than 3& half year the car deprecision rate is different formula.
if you are new car owner that mean you do not have much discount when you purchase the car insurance,
bigger car purchase amount = more amount for insurance too.
lay man term you do not have discount. with 5 year owner ship of car or more can enjoy 50% for insurance perium provide you do not has any claim, NCD
my view is go small then go big in later stage
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For a new driver who intends to drive only for 2-3 years, buying a 2nd hand car has 2 advantages:Originally posted by kmkm:canaan, yes, if you intend to drive for a short 2-3yrs, resale is more worthwhile provided you buy one that is NO older than 3yrs old.
I agree with zaxis... go small then go big in later stage. I drove 3 resale cars before starting to buy new, but in the past COE was at different level.
Originally posted by kmkm:canaan, let me try to answer your question on depreciation formula.
We need to be clear about what depreciation and rebate value means. Depreciation is a calculation to assess the AVERAGE rate of value loss over a specific time. FORMULA is the SAME regardless of time.
Rebate value is the minimum amount to get back upon scraping the car (total of COE and PARF rebates) and this FORMULA WILL VARY AFTER 5 YEARS due to formula changes in the PARF rebate component (check it out at LTA website).
e.g. New car price at 50k, OMV = 15k, COE = 10k
1 yr later, Rebate value = 75% x 110% x.15k (PARF rebate) + 9k (COE rebate) = 21.4k
Value lost = 50k – 21.4k = 28.6k (57% of car price)
Depreciation of car over past 1yr = 28.6k per year
At year 3, Rebate value = 75% x 110% x.15k (PARF rebate) + 7k (COE rebate) = 19.4k
Value lost = 50k – 19.4k = 30.6k (61% of car price)
Depreciation over past 3yrs = 30.6k /3 = 10.2k per year
At year 5, Rebate value = 75% x 110% x.15k (PARF rebate) + 5k (COE rebate) = 17.4k
Value lost = 50k – 17.4k = 32.6k (65% of car price)
Depreciation over past 5yrs = 32.6k /5 = 5.7k per year
At year 7, Rebate value = 65% x 110% x.15k (PARF rebate) + 3k (COE rebate) = 13.7k
(Notice the PARF value rebate formula starts to change after Year 5)
Value lost = 50k – 13.7k = 36.3k (73% of car price)
Depreciation over past 7yrs = 36.3k /7 = 5.2k per year
At year 9, Rebate value = 55% x 110% x.15k (PARF rebate) + 1k (COE rebate) = 10.1k
Value lost = 50k – 10.1k = 39.9k (80% of car price)
Depreciation over past 9yrs = 39.9k /9 = 4.4k per year
1) Notice how depreciation of a new car is very much higher during the initial 3-4 yrs while its rebate value falls at constant rate?
2) Notice how the rebate value starts to fall faster after 5 yrs even though depreciation is getting lower towards the end of its lifespan?