Hotouch Neutral Newbie December 28, 2009 Share December 28, 2009 Hi, I am looking at second hand cars and I've been searching for the longest time how certain values are derived. Example, Second hand Honda jazz selling for $40000, 3 year old car. OMV:14000. COE:10000 I understand that the parf benefit is derived by multiplying 110% to OMV to get the ARF ($15400) and multiplying another set of percentage depending on the age of the car. Since the car is only 3 years old, so ARF remains at $15400. COE will be (84/120) * 10000 = $7000 Thus, the COE+PARF= $22400 NOW! I really don't understand where does the extra $17600 (I minus the PARF (15400) and COE value(7000) from the asking price of $40000) come from?! I heard that for Japanese cars, if the above value (asking price - (parf+coe)) exceeds $9000, its deemed overprice. Any bros can clarify and teach me these basics? 1)What and how does the extra 17600 bucks come about? 2)What is a reasonable value for a honda jazz/ toyota yaris? Please enlighten me. Regards!! ↡ Advertisement Link to post Share on other sites More sharing options...
GSwhite 1st Gear December 28, 2009 Share December 28, 2009 Hi, base on experience, the 17,600 comes from the 'Body' value of this car plus profit of the dealer. In the used car market, there is a market value for 'body' which differs in every different make and model. Its usually set based on the popularity and demand of that particular model for export market. When the dealer buy this car from the previous owner, he probably bought it (or trade in) at PAPER+BODY. Just an example: If the body value of this car is 8,000 , then PAPER+BODY= 30,400 (22.4k+8k) So the dealer bought this car at 30,400 excluding transfer fees , maybe spend abit on touch-up, repaint etc.. So his cost is about 32K (without factoring in his advertising cost, salesman comm, etc.. So usually they will let go if anybody offers at 38k-39k. which means he made a profit of 6-7k for this car. The value of 8k is just my estimation, to get a more accurate 'hang cheng' (market value) I suggest you call up used cars exporters to check how much is the 'body value' of this model at this age... Hope it helps.. Link to post Share on other sites More sharing options...
Civicblade 2nd Gear December 28, 2009 Share December 28, 2009 (edited) You have made a mistake in your calculation. The PARF is 0.825xOMV The COE rebate calculation is correct. The amount of premium over the PARF+COE rebate that dealer is asking for is dependent on many factors. The base price of the dealer is PARF+COE (cash from government) + export value of the car body. This means that is the dealer is not able to sell locally, he can still export the vehicle. He is unlikely to sell at the base price unless the dealer is also a financing firm that makes interest from the car loan. To cover the overhead, parking, cleaning and advertisement cost of putting a used car on sale, the dealer will have to get it from the buyer. So the selling price is always much higher than the base price that the dealer can get by exporting. The used car dealer will also take into account the pricing of new cars of the same model. When dealers sells, they always used the averaged annualized depreciating calculation to convince (or shall I say confuse) potential buyers. When dealers buys used cars, they will use PARF+COE rebate + export body - processing fee to pyscho seller than their cars command low low value and that they are doing the sellers a favour by taking in their cars. Singapore is a willing seller willing buyer market for used cars (on the front) but.... the main reason why dealers can command high premium for their used cars is largely due to the fact that many used cars buyer needs either overtrade to get rid of their old cars or they need large loans at low cash outlay. Another reason is that private sellers have an aversion to dealing with direct buyers, scared of this, scared of that. They would rather sell low to dealers. Buyers on the other hand, scared of this, scared of that, rather deal with companies than individual for used car purchase. Typical Kiasi mentality + spend now repay later habit keeps used cars dealers alive. There is no reasonable price for used cars.. Whatever price that you are willling to pay is reasonable. Edited December 28, 2009 by Civicblade Link to post Share on other sites More sharing options...
Passion 5th Gear December 28, 2009 Share December 28, 2009 bro,your parf is wrong.The parf is only 11550,not 15400.Once the car is registered,we're looking at PARF not ARF.ARF is the amount you paid upfront when registering the car.Since the car already registered,meaning this is transparent to you.When buying used car,we're looking at PARF + Body + COE.The rest is dealer commission and overhead.From what I derive,PARF is 11550,COE base on your 3 yrs car,I assume your COE left is 7000.So total PARF + COE = paper value is 18550.Since the OMV of this car is 14000,I think best price the body can fetch is half the OMV it command,which I would say 7k or more.Lets take it as 7k,18550 + 7000 which is around 25550.We're looking at around 15k profit(Including ads,touch up,change tyre,STA and servicing).I would say this car is overprice. Link to post Share on other sites More sharing options...
Winningeleven 4th Gear December 28, 2009 Share December 28, 2009 Like dat it seem those 2nd hand fit and yaris are overpriced liao,even direct owner also asking the same price as dealer....as seem from sgcarmart. I thought PARF is 100% OMV if car is less than 5 years old...let say the OMV of fit/yaris are average about $15k and COE is about $12k, So by now selling it ,it still made at a profit of $10K after using for 3 years?As the Average price is more than $35k for both model. Link to post Share on other sites More sharing options...
Keranjang Neutral Newbie December 28, 2009 Share December 28, 2009 What value? If car $80K .. you loose $80K (more if you take loan) Loose = E.g. Burn $80K Cash Link to post Share on other sites More sharing options...
Tanly Neutral Newbie December 28, 2009 Share December 28, 2009 (edited) Dude it's not possible for a dealer to earn $15K for a car worth $35k.Speaking from someone in the trade let me tell you this.Sellers nowadays have knives sharper than the the dealers. They see a similar aged car as theirs on sgcarmart asking for $40K and they demand dealers take in their car for $38-$39K,Not knowing the fact that dealer's advertised price is not the eventual selling price due to price negotiation and without considering the $$$ the dealer needs to spend to restore the car+ renew road tax etc. bro,your parf is wrong.The parf is only 11550,not 15400.Once the car is registered,we're looking at PARF not ARF.ARF is the amount you paid upfront when registering the car.Since the car already registered,meaning this is transparent to you.When buying used car,we're looking at PARF + Body + COE.The rest is dealer commission and overhead.From what I derive,PARF is 11550,COE base on your 3 yrs car,I assume your COE left is 7000.So total PARF + COE = paper value is 18550.Since the OMV of this car is 14000,I think best price the body can fetch is half the OMV it command,which I would say 7k or more.Lets take it as 7k,18550 + 7000 which is around 25550.We're looking at around 15k profit(Including ads,touch up,change tyre,STA and servicing).I would say this car is overprice. Edited December 28, 2009 by Tanly Link to post Share on other sites More sharing options...
Passion 5th Gear December 29, 2009 Share December 29, 2009 Dude it's not possible for a dealer to earn $15K for a car worth $35k.Speaking from someone in the trade let me tell you this.Sellers nowadays have knives sharper than the the dealers. They see a similar aged car as theirs on sgcarmart asking for $40K and they demand dealers take in their car for $38-$39K,Not knowing the fact that dealer's advertised price is not the eventual selling price due to price negotiation and without considering the $$$ the dealer needs to spend to restore the car+ renew road tax etc. Bro,I deal with them before and it is possible.They got their lobang to touch up,do their servicing at the cheapest cost they can get.They quoted my Mz2 for 30k max,everywhere is the same.I pushed for 32k and it went through.You must ask for reasonable price,I went online to look for almost similiar year and model,that car is asking for 36k,so when they quoted me 30k,straight away I tell them don't talk c--k with me,if others can ask for 36k,I ask for 32k is not too much.He called his boss and asked,his boss straight away agree.The fact that the 36k car is 1 month or so older than my car.Everything is possible,must get the facts right and then talk to them.Most importantly,must know what you're talking,don't let them smoke you. Link to post Share on other sites More sharing options...
Ben5266 Supercharged December 29, 2009 Share December 29, 2009 3 months ago, I was looking for a 1-2yo Fit/Jazz. When to see the car as advertised in SGCarmart. 1 yo Fit was asking 53-54k. 3yo Jazz about 38-40k. Then, brand new Fit was only 60k and Latio 55k. I asked them why so ex? They replied, the COE is going up. Everybody is adjusting the price up. No further bargain. My decision then was going for the new Latio. For this case, 40k for 3yo Jazz. If we use paper value + body method, it is over price as per other bros have concluded. But if we use the straight line depreciation method, it will cost you 4.6k per year for the next 7 years, which I think is not too bad. A brand new Jazz 1.3, with OMV 20k, retailing @70k, the annual depreciation is about 6k. So, the delta is $1.4k per year for the next 7 years or $120 per month. Do bare in mind that for the saving of $1.4k per year, you are taking additional risks "courtesy" of the 2nd car. Happy car buying! Link to post Share on other sites More sharing options...
Hiphiphoray 6th Gear December 29, 2009 Share December 29, 2009 40k for a 3yr old Fit is not worth it. Might as well top up a bit more to get a brand new Avente. Why would u want to get a Fit in the first place ? Good FC is out cos u are oredi paying high price for it as compare to other bread & butter 1.6 sedan. Maybe easier to park for your wife or girlfriend ? I know some women buy car base solely on thier ability to do parking alone(especially parallel parking. They absolutely dread this! ) Link to post Share on other sites More sharing options...
Caravan 5th Gear December 29, 2009 Share December 29, 2009 For this case, 40k for 3yo Jazz. If we use paper value + body method, it is over price as per other bros have concluded. But if we use the straight line depreciation method, it will cost you 4.6k per year for the next 7 years, which I think is not too bad. A brand new Jazz 1.3, with OMV 20k, retailing @70k, the annual depreciation is about 6k. So, the delta is $1.4k per year for the next 7 years or $120 per month. Do bare in mind that for the saving of $1.4k per year, you are taking additional risks "courtesy" of the 2nd car. Happy car buying! 4.6k /yr for fit is ok? Gotta be kidding. Check out the ads, there are other cars with similar depreciation/age and bigger/better than fit. Link to post Share on other sites More sharing options...
Shanhz 3rd Gear December 29, 2009 Share December 29, 2009 nowadays mkt is good, no longer dealer taking in paper+body.. it will be higher than that. typical margin for jap car is around 3-5k for dealers. ask arnd, have a feel of the mkt and u can't go wrong. dun rush into it ↡ Advertisement Link to post Share on other sites More sharing options...
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