Analysis of buying a car now

[Majordan]

i got a friend who bought his lancer EX 1.5 yrs ago for 63k with 8k COE. Now C&C is offering the same car (facelifted) for 71k with 24k COE. assuming the OMV is 20k (assume only)

 

my friend paid 34k premium (65 - 8 - 20)

 

if i buy now from C&C my premium is 27 (71 - 24 - 20)

 

am I getting a better deal or my calculation is wrong?

[Maldini03]

i got a friend who bought his lancer EX 1.5 yrs ago for 63k with 8k COE. Now C&C is offering the same car (facelifted) for 71k with 24k COE. assuming the OMV is 20k (assume only)

 

my friend paid 34k premium (65 - 8 - 20)

 

if i buy now from C&C my premium is 27 (71 - 24 - 20)

 

am I getting a better deal or my calculation is wrong?

 

Nope. your calculation is just fine. The higher the COE goes, the CHEAPER is the car.

 

Ah Boy ah!! you did not factor in the cost of COE!!

[Nlstch]

Don't forget COE is depreciating every year, if you pay lower for COE, you will actually 'Lost' lesser if you are going to drive 10 years, if you paid higher, you will lost more. Basically, COE value is lower and lower as years goes by and will be 0 when reach 10 years. So do you think high COE is good?

[Zze121]

My friend bought the showroom display unit EX 2.0 in Jan 2008 @ $63k, COE @ 11k.

Edited February 26, 2010 by Zze121

[Sci10213]

Don't forget COE is depreciating every year, if you pay lower for COE, you will actually 'Lost' lesser if you are going to drive 10 years, if you paid higher, you will lost more. Basically, COE value is lower and lower as years goes by and will be 0 when reach 10 years. So do you think high COE is good?

 

Agree... and COE high + same PARF => high paper value

 

So with same Market Value, it means Nett Value is lower.

 

Any accident means anytime the car will be declared as total loss

 

Those who take high loan ~ congrats

[Majordan]

Agree... and COE high + same PARF => high paper value

 

So with same Market Value, it means Nett Value is lower.

 

Any accident means anytime the car will be declared as total loss

 

Those who take high loan ~ congrats

 

what is "declared as total loss"?

[Keecow]

Hi,

 

Think you missed that 100% tax that will be paid to the govenment

[Throttle2]

my rule is simple.

 

if have to analyse so hard, better forget it.

[Scoobydoo]

If you both driving for 10yrs till scrap, then you are getting a worse deal

 

Also, if COEs come down in the future, you may find it harder to sell your car vs your friend, assuming the potential buyers are in it for the long haul.

 

The only clear-cut time that COE higher is better is when buying 2nd-hand car. If both same make and model, same condition selling on sgcarmart for same price, but one has higher COE and/or OMV, of course take the higher one.

[Scoobydoo]

what is "declared as total loss"?

 

Declared total loss = game over....

 

Means your car is deemed irreparable and they will scrap it, and pay you back a "fair market value", which is almost guaranteed to be at least 15-20% short of the loan you still owe the bank.

 

If the car has first year 1-for-1 replacement, then not too bad. They will give you back another car in event of total loss.

 

My friend's GTI met that fate :( Dunno what his policy was, but he got back full compensation (I think in cash terms), and he chut BMW after that.

[Leepee]

TS is saying that as long as the AD is not able to earn more premiums from him this time compared to 1.5 years ago, means that the car purchase is a good deal?

 

But TS simply ignore the other fact that paying 20k COE to the gov is $12k more that his friend's 8k COE.

To me paying gov $12k more for a COE is the worst, I rather let the handsome/sexy salesprson earn more.

 

Why give so much the to gov and yet being labelled as lower class citizens??

 

[Majordan]

TS is saying that as long as the AD is not able to earn more premiums from him this time compared to 1.5 years ago, means that the car purchase is a good deal?

 

But TS simply ignore the other fact that paying 20k COE to the gov is $12k more that his friend's 8k COE.

To me paying gov $12k more for a COE is the worst, I rather let the handsome/sexy salesprson earn more.

 

Why give so much the to gov and yet being labelled as lower class citizens??

 

that's true. but the premium i pay to GOV as COE has a residual value when I sell the car where the premium I pay the SE goes to her own pocket and vanish

[Majordan]

If you both driving for 10yrs till scrap, then you are getting a worse deal

 

Also, if COEs come down in the future, you may find it harder to sell your car vs your friend, assuming the potential buyers are in it for the long haul.

 

The only clear-cut time that COE higher is better is when buying 2nd-hand car. If both same make and model, same condition selling on sgcarmart for same price, but one has higher COE and/or OMV, of course take the higher one.

 

COE already cut 40% last year and 15% this year, what are the chances it will come down "in future"?

[Nimm12]

i got a friend who bought his lancer EX 1.5 yrs ago for 63k with 8k COE. Now C&C is offering the same car (facelifted) for 71k with 24k COE. assuming the OMV is 20k (assume only)

 

my friend paid 34k premium (65 - 8 - 20)

 

if i buy now from C&C my premium is 27 (71 - 24 - 20)

 

am I getting a better deal or my calculation is wrong?

 

your calculation is correct but your conclusion of 'better deal' is wrong

 

assume omv 20k for both case

63k purchase price with 8k coe =>depreciation per yr = 63 - 10 = 5.3k

71k purchase price with 24k coe => depreciation per yr = 71 - 10 = 6.1k

 

given the same OMV, 63k with 8k coe is a better buy than 71k with 24k coe because u pay less for depreciation

 

C&C earn more for the 63k lancer EX with 8k coe, but its a win-win for them and for u, as your depreciation is lower

the 71k lancer EX with 24k coe u pay more, and C&C earn less, lose-lose for u and them

 

reason: the government earn the extra $ when coe goes up, so u pay more to the government, and C&C earn less

 

HOWEVER, if u do not wish to keep the car for 10yrs, but only wish to drive for 2~3yr, pls consider the 71k car because it has a much higher paper value than the 63k one with 1/3 the coe value

 

so this question u asked ultimately depend on how long u intend to keep the car

 

Edited February 27, 2010 by Nimm12

[Majordan]

thanks for the detailed analysis.. can you explain why it is better to go for the 71k car if I only intend to drive for a few years?

[Relagsingh]

and recently the ARF and PARF value drop. so the premiums didn't change much though the COE increase. the dealers are still earning as many as before.

 

Jap cars are more ex cuz their OMV now is high. compare the conti car prices and you'll understand. except VW, i dun hold high regards for the dealer here... way overpriced. u can go check their premium. their premiums lagi premium than premium brands.

[Scoobydoo]

thanks for the detailed analysis.. can you explain why it is better to go for the 71k car if I only intend to drive for a few years?

 

Because when you sell it, the new buyer will be thinking exactly like you now; To buy the "Better deal", EXCEPT, if he wants to drive it till scrap, then he will choose the cheapest upfront car of that make and model in the market with the highest OMV.

 

After all, the COE paper becomes worthless in 10yrs, no matter how much you paid for it at the beginning.

[Vextan]

my rule is simple.

 

if have to analyse so hard, better forget it.

ha ha, good one !!