The process of owning a car in Singapore can be quite mystifying, and if you do not properly evaluate every bit of it before closing the purchase deal, it could plunge you into making terrible financial mistakes. With many variables that can significantly affect the amount of money you pay for 2nd hand cars in Singapore, you ought to be careful in doing your research. Here is a guide to help you make an informed decision when purchasing a second hand car in Singapore.
1. Depreciation and purchase decision
People are purchasing used cars than before because they are more affordable when compared to new cars. Used cars tend to have lower depreciation meaning they lose their value slowly than new cars. Much of the depreciation in new cars occurs in the first couple years of use. New cars lose 20 percent in their value within the first year and about 10 percent over the next two years.
During the first three years of new cars, they are said to suffer the greatest depreciation in value. If you purchase after that period, you allow the previous owner bear the burden of heavy depreciation of the vehicle.
2. What pre-owned cars to buy- PARF or COE
The category of a pre-owned car will significantly affect the amount you spend. Used cars for sale fall into two categories: Preferential Additional Registration Fee (PARF) and Certificate of Entitlement (COE). A PARF car is one that has not been de-registered before the depreciation period, which is set at 10 years. This means that it is eligible for not only the COE rebate, but also the PARF rebate.
A COE car will not be eligible for PARF rebate since the owner chose not to de-register the vehicle but continue using it. The depreciation period and the rebate are set to help keep only newer cars on the roads. You should know which category of car you should buy, and how much it is likely to cost you.
3. Avoid unscrupulous practices
A trend mostly witnessed in the second hand car selling market is the tampering with the odometer. If you have previously shopped for used cars, you might have come across phrases such as “low mileage car deals” or “seldom used family’s second car.”
These kinds of gimmicks are used to set traps for people who are seeking for quality used cars but at cheaper price quotes. As the adage goes, cheap is expensive. When you search in classified ads and other spots where used cars are sold, you will come across very many of these phrases.
As a buyer, you have to think outside the box and more importantly, have to be logical. How many families in such hard economic times can own more than one car? Not only that, the car prices are so high and not many can afford to purchase cars and park them in their yards without use.
When you purchase 2nd hand cars in Singapore, make sure they have not been tampered with to reflect the wrong mileage covered. In essence, before you even think of buying a used vehicle, you should ensure that you have all the buying tips and advice at your fingertips because there may be some hurdles to cross.