How to calculate whether the used car is worth to buy?

[Spartan]

Hi all:

 

For used car, how do you all calculate which car is worth to buy? Which car is over priced?

[Tarzan666]

Now all used car overprice, wat talking u..

 

i see cars which is selling even more expensive than it was brand new.

[Timex1441]

a rough guide is to calculate the annual depreciation (assuming u know the OMV)....rite now, for mid-size sedans, the depreciation tat used car dealers use for pricing is abt $5.5K to $7.5K (depending on wat brand....the H brand of cos will be more expensive).

[Beachboy7718]

Hi all:

 

For used car, how do you all calculate which car is worth to buy? Which car is over priced?

 

Some guides:

1) Calculate the yearly depreciation value against new car include interest and all hidden value (Used Car transfer pricing could be high). It is up to you to decide how different of the depreciation value then it is worth buying used car. Try to do a simple survey on simple used car depreciation value and the difference % compared to new cars. Take into account of warranty period of offered from new car as part of your consideration.

 

 

Risk: As used car actual COE is low compared current COE, most dealer will not follow its actual COE calculation but compare with current COE. If there is the case, you will take the risk if future COE fallen beyond offered marked up COE from used car dealer. If you can buy a used car with its actual low COE calculation depreciation value and the car is well maintained with no accident. No doubt, it is worth buying with low depreciation value!!!

Edited November 1, 2011 by Beachboy7718

[Alg]

Don't buy. Wait........ Don't let government earn so much.

[Jonjees]

Hi all:

 

For used car, how do you all calculate which car is worth to buy? Which car is over priced?

 

you will need to 1st ask yourself, long or short term usage.

then calculate the depreciation of the respective rides.

 

also you will need to decide if you are paying full cash or loan.

if for loan etc in SGcarmart, when you click on the financial tab for used cars, it will give you a very quick calculation of when is your break even year.

 

there are also alot of other factors that you will need to decide, etc maintenance, roadtax, insurance.

 

so in my opinion the car that is worth to buy is the car that you can afford to buy

 

 

 

[Tedlhw]

Hi all:

 

For used car, how do you all calculate which car is worth to buy? Which car is over priced?

 

My view is that if can afford, buy new, reason being that the new car prices are high due to rise in COE, not additional profit margin on the car. Assuming 3-5 years down the road, if COE drop significantly, there's a good likelihood that the paper value of your car > new car selling price.

 

If you can stomach the loss, which is usually the profit margin of the ADs+ depre for a new car(thats why people say you drive the car out you lose 30K, thats due to the margin charged by the ADs), you can dereg the car for a new one.

 

While for current used cars, the car dealers increase the margin they make, to equal new car depre.

In my view, thats ridiculous.

You are not going to get back the money that you paid extra to the dealer.

If COE drop significantly, you cannot dereg the car as the paper value is low, but you paid high.

 

Thus if COE drops, you will be stuck with a 5 to 7 years old car with all the attendant problems, which has a paper + body of 25K while you paid 100K for it 3 years back, while new car price is 55K.

 

But if you paid 130K for new car, 3 years later, your car might have a paper+body of 60k with the same new car price at 55K.

You lose the same amount, but you changed 2 new cars in 6 years, while in the other case, you are stuck with an old car for 6 years or more, with higher wear and tear etc.

 

My 2 cents, feel free to disagree.

[Timex1441]

My view is that if can afford, buy new, reason being that the new car prices are high due to rise in COE, not additional profit margin on the car. Assuming 3-5 years down the road, if COE drop significantly, there's a good likelihood that the paper value of your car > new car selling price.

 

If you can stomach the loss, which is usually the profit margin of the ADs+ depre for a new car(thats why people say you drive the car out you lose 30K, thats due to the margin charged by the ADs), you can dereg the car for a new one.

 

While for current used cars, the car dealers increase the margin they make, to equal new car depre.

In my view, thats ridiculous.

You are not going to get back the money that you paid extra to the dealer.

If COE drop significantly, you cannot dereg the car as the paper value is low, but you paid high.

 

Thus if COE drops, you will be stuck with a 5 to 7 years old car with all the attendant problems, which has a paper + body of 25K while you paid 100K for it 3 years back, while new car price is 55K.

 

But if you paid 130K for new car, 3 years later, your car might have a paper+body of 60k with the same new car price at 55K.

You lose the same amount, but you changed 2 new cars in 6 years, while in the other case, you are stuck with an old car for 6 years or more, with higher wear and tear etc.

 

My 2 cents, feel free to disagree.

i agree with ur analysis, except for the "55K" price prediction....with inflation, (some ppl's) salaries rising, increasing population, govt becoming smart not to overcrowd the roads etc etc, i really DOUBT we'll ever see car prices at abt $55K....i think the best we can hope for in the future is maybe $70K, n tat's probably for a really basic model car.

[Spartan]

Thanks

[Juzzme]

Either let the dealers profit from artificially inflated prices, or 'donate' $ to our govt thru obscenely high COE. Consumers are still losers either way. But if having a car really enhances one's quality of life (on a nett basis after considering the trade-offs from the opportunity costs), then i'd say its a gain rather than lose.

Edited November 1, 2011 by Juzzme

[macrosszero]

i agree with ur analysis, except for the "55K" price prediction....with inflation, (some ppl's) salaries rising, increasing population, govt becoming smart not to overcrowd the roads etc etc, i really DOUBT we'll ever see car prices at abt $55K....i think the best we can hope for in the future is maybe $70K, n tat's probably for a really basic model car.

 

The fact of the matter is that a large portion of the Singapore population is heavily leveraged on loans for big ticket items like property, vehicles, renovation/appliances, etc. Servicing these loans depends on having jobs. In the event of large scale layoffs, demand will plummet, along with a corresponding drop in prices across the board. Cars would be the easiest to get rid of, either to get cash back, or get rid of a burden. Back in the day when COE topped 100k it would have been unthinkable for COE to be 2 dollars, but happen it did... History shows that COE is affected more by the economic climate than by physical fundamentals of number of COEs vs. Road space, ERP gantries, population, etc.

[Tanahseng]

I said no need to calculate, having a car means losing money!

[Ngck]

buy new, still got chance to sell due to lose not so much money due to paper value

 

buy second had... prepare to drive all the way.... unless you want to cough out blood

 

second hand car price (those low paper value ones) is marked up at new COE car prices...

when time to sell, sure bang balls unless you drive all the way

[inlinesix]

The fact of the matter is that a large portion of the Singapore population is heavily leveraged on loans for big ticket items like property, vehicles, renovation/appliances, etc. Servicing these loans depends on having jobs. In the event of large scale layoffs, demand will plummet, along with a corresponding drop in prices across the board. Cars would be the easiest to get rid of, either to get cash back, or get rid of a burden. Back in the day when COE topped 100k it would have been unthinkable for COE to be 2 dollars, but happen it did... History shows that COE is affected more by the economic climate than by physical fundamentals of number of COEs vs. Road space, ERP gantries, population, etc.

Based your analysis, i will be waiting for Grand Lelong. I don't big ticket items other than HDB loan which will be fully paid in 3 yrs time.

[Passion]

Used car dealers are like blood suckers. Back then, a camry 2.4 in Mar 2009 only cost $81k. Now if you filter and look at the car, how much does it cost for a same year car? Yes, they need to earn, but it is also them who jack up the new car price. If you can get a relatively new 2nd hand car at really lower price, will you go for a brand new car? Chances are yes, you will. But for those really plan their budget well, they will go for 2nd hand car. Afterall, there is no much different. It is only the price of secondhand is so near to new car that people rather look at new car than secondhand car. There should be a limit to how much a dealer can peg their cars to sell. Normally they tell you economy bad, tell you your car no value. Quoted you paper(COE) + PARF + Body. After they take over, they will tell customer Paper + PARF + Body + they need to earn. They need to earn about 15k to 20k a car. What I can suggest to fellow bro here is, take the PARF + COE + Body and see how much. Depending on the mileage, condition of the car and add about 5k to 8k to the dealer. That should be about right. 15k to 20k is hilarious.

[Wreckwrx]

buy new, still got chance to sell due to lose not so much money due to paper value

 

buy second had... prepare to drive all the way.... unless you want to cough out blood

 

second hand car price (those low paper value ones) is marked up at new COE car prices...

when time to sell, sure bang balls unless you drive all the way

 

 

I'm in the market for a 2nd hand car but my ballz shrink whenever I see those with very low paper value....... it's criminal at how much they r asking for these rides.....

[Shanhz]

My view is that if can afford, buy new, reason being that the new car prices are high due to rise in COE, not additional profit margin on the car. Assuming 3-5 years down the road, if COE drop significantly, there's a good likelihood that the paper value of your car > new car selling price.

 

If you can stomach the loss, which is usually the profit margin of the ADs+ depre for a new car(thats why people say you drive the car out you lose 30K, thats due to the margin charged by the ADs), you can dereg the car for a new one.

 

While for current used cars, the car dealers increase the margin they make, to equal new car depre.

In my view, thats ridiculous.

You are not going to get back the money that you paid extra to the dealer.

If COE drop significantly, you cannot dereg the car as the paper value is low, but you paid high.

 

Thus if COE drops, you will be stuck with a 5 to 7 years old car with all the attendant problems, which has a paper + body of 25K while you paid 100K for it 3 years back, while new car price is 55K.

 

But if you paid 130K for new car, 3 years later, your car might have a paper+body of 60k with the same new car price at 55K.

You lose the same amount, but you changed 2 new cars in 6 years, while in the other case, you are stuck with an old car for 6 years or more, with higher wear and tear etc.

 

My 2 cents, feel free to disagree.

 

 

generally agree, except you should not take a huge loan to buy that new car. the interests on that 100k not cheap also.

not forgetting that now if you walk into any showroom (esp jap car), the SE treat you like king. so can get a huge discount, AD margin very small now. so it's a good idea to get new car.

[Ngck]

I'm in the market for a 2nd hand car but my ballz shrink whenever I see those with very low paper value....... it's criminal at how much they r asking for these rides.....

 

 

can buy becasue compare to new car depreciation still consider low...

 

but your game plan must to be to drive all the way to beat new car depreciation.

want to sell early sure bang balls compare to new cars.