How much loan do luxury car buyers usually take?

[RadX]

Yes i agree. Encouraging financial prudence is important, and the message has to be brought across tactfully. Don't assume everyone who take a loan is committing sucide. Got to respect individual's preference and needs. And one don't have to keep repeating "i pay full cash" over and over again, year after year. Tio bo?

 

 

right you are pundeh, er turboflat4 also paid full cash for his mama toddy [laugh]

[Roh96]

right you are pundeh, er turboflat4 also paid full cash for his mama toddy [laugh]

 

lol... U bunch of jokers, i hope to be able to join the gathering and meet some of u some day. (U, Porker, Bear, MO, ...)

[RadX]

lol... U bunch of jokers, i hope to be able to join the gathering and meet some of u some day. (U, Porker, Bear, MO, ...)

 

 

muahahah...yah la, we have all made our friends here online, and off...and yes, a barrel of laughs we will be..... [:p]

[Throttle2]

go back to your COE thread lah..... [:p]

 

T2, you are one of the respected ones I have in mind here, however, let's not get too iffy and too overboard with this. Move on!

 

No hard feelings.

As mentioned, respect what you did.

[Humsuplo]

No hard feelings.

As mentioned, respect what you did.

 

 

[Carer]

Yes i agree. Encouraging financial prudence is important, and the message has to be brought across tactfully. Don't assume everyone who take a loan is committing sucide. Got to respect individual's preference and needs. And one don't have to keep repeating "i pay full cash" over and over again, year after year. Tio bo?

 

chanced upon this thread and was curious about the sentiments. but this throttle caught my attention. indeed, he seems well to do. but really there is no need to enforce his own idea onto others or dictate what others should do. while i agree there are people who really stretch themselves with loan, some are not.

 

a very good example is people who do businesses. to them, operating cash flow is very important. they rather take loan based on the low interest rates and have cash with them even though they are not sure if the money invested in the business will be enough to compensate the interest incurred in the car loan.

 

to be honest, 1.88% P.A is really quite low. a 3 yr loan of $100k incurs about $5600 interest throughout 3 years, thats about $2000/yr. on a side note, would you lend anyone $100k just to earn $6000 in 3 years? food for thoughts :)

[Detach8]

I just read this article:

http://www.channelnewsasia.com/stories/sin...1257825/1/.html

 

I found this statement by Tan Huey Min, general manager of Credit Counselling Singapore a little misleading:

 

"Over the long run, if you pay off the loan in eight years, the amount you have paid is much more than if you had paid the loan off in five years."

 

First off, back when 100% 10-year loans were allowed, the interest rate was 1.88-2.8%. EIR 3-4%.

 

Now that MAS capped loans to 50% 5-year, banks raised interest rates to 3.25%, or EIR 6-7%.

 

Given a arbitrary amount of $100,000. This is how it works out:

 

10 years, 100% loan @ 1.88% = $18,800 in interests

5 years, 50% loan @ 3.25% = $8,125 in interests

 

Sure, the interests would have reduced by over $10k+ but these have not taken into account the time value of money, i.e. inflation.

 

Singapore’s inflation rate averaged around 4% over the last 5 years. Given that the old EIR was 3-4%, it was actually cheaper to take the loan.

 

Note also when you stretch a car loan, the real EIR decreases.

 

Here’s what $50K (the down payment amount) if hedged against inflation would work out over 5 years at 4%:

 

$50,000 (P) x 4% compounded

Edited March 5, 2013 by Detach8

[HP_Lee]

Most people are highly geared and max out their loan as interest rates are low.

 

Makes sense to max out car loan at 1.88% and use the cash to invest and make the money work for you, rather than pay in full cash.

 

Bro your effective rate is actually 3+%. Not 1.88%.

[ThePeak]

When i come in MCF...i feel poor..

 

[Leepee]

I think you are not wrong.

Take your example, and say the car is sold at the fifth year.

The car will be worth exactly the same on the resale market.

How about the interest paid by both parties. Do you have the est figures? If both incur similar interest, then there is no 'savings' from the loans interest.

 

 

 

I just read this article:

http://www.channelnewsasia.com/stories/sin...1257825/1/.html

 

I found this statement by Tan Huey Min, general manager of Credit Counselling Singapore a little misleading:

 

"Over the long run, if you pay off the loan in eight years, the amount you have paid is much more than if you had paid the loan off in five years."

 

First off, back when 100% 10-year loans were allowed, the interest rate was 1.88-2.8%. EIR 3-4%.

 

Now that MAS capped loans to 50% 5-year, banks raised interest rates to 3.25%, or EIR 6-7%.

 

Given a arbitrary amount of $100,000. This is how it works out:

 

10 years, 100% loan @ 1.88% = $18,800 in interests

5 years, 50% loan @ 3.25% = $8,125 in interests

 

Sure, the interests would have reduced by over $10k+ but these have not taken into account the time value of money, i.e. inflation.

 

Singapore

[Tungsl]

Cars are really expensive in Singapore

 

These assumptions are not perfect but suffice to make an illustration

 

 

To put things into perspective, I will provide an example of a cost breakdown of all factors listed above that makes up the car prices with the New Tier Tax Structure on the ARF with 2 examples below. (I.E. Friendly Family Toyota Altis 1.6L, and a Higher end Luxurious BMW 320I 2.0L )

 

 

 

* Assumption: I have not included the CEV into the calculations for both examples.

 

* I have also used the COE based on the 2nd Open Bidding for Month of Feb-2013 with the New Tier Tax structure on OMV > $20,000 in Example 2 below for the BMW 320I 2.0L

 

* Please also note that OMVs values are not always the same even on the same model of vehicles and they fluctuate with every shipment (mild fluctuation really). This in turns cause ARF values to change as well as Custom Duties and GST. Of course COEs are on bidded basics as well. Therefore car prices are always volatile.

 

 

Example 1: Toyota Altis 1.6L

1.OMV: $15,270

2.COE: $78,301 (Based on 2nd Open Bidding for Month of Feb-2013 for CAT A)

3.ARF: $15,270 (100% of OMV only since OMV is less than $20,000)

4.Custom Duty: $3,054 (20% of OMV)

5.GST: $1,283 (Based on 7% of OMV + Custom Duty)

6.Registration Fees: $140

7.Vehicle Plate Fees: $30

 

Total Cost of Car: $113, 348 (Add up all 1 to 7 together)

 

Borneo Motor List Price: $139,988 (Price with Guaranteed Gold COE within 3 months from Borneo website)

 

Difference: $26,640 (Translates to Profits for Borneo Motor or whatever they can keep after their operating costs are subtracted.)

 

 

 

Example 2: BMW 320I 2.0L

1.OMV: $36,486

2.COE: $92,667 (Based on 2nd Open Bidding for Month of Feb-2013 for CAT B)

3.ARF: $43,080 (Additional Tax Structure of 140% applies to excess $16,486)

4.Custom Duty: $7,297 (20% of OMV)

5.GST: $3,064 (Based on 7% of OMV + Custom Duty)

6.Registration Fees: $140

7.Vehicle Plate Fees: $30

 

Total Cost of Car: $182,764 (Add up all 1 to 7 together)

 

Performance Motor List Price: $216,800

 

Difference: $34,036 (Translates to Profits for Performance Motor or whatever they can keep after their operating costs are subtracted.)

 

 

 

Entry Level Porsche 911 3.8L OMV average is $132, 053. And we are not even going to talk about Lambo or Ferraris where their OMV are in ranges of $350,000 and up. This translate to an ARF of $20,000 for the first Tier of OMV of 100% , $42,000 on the second tier between $20,001 to $50000 range at 140% , and a whopping $147,695 on the last tier for the remainer amount at 180%.

 

 

 

Effectively, the new ARF for a Porsche now is $209,695, a good $77,000 increase from what it was before. Think about what you want to do with all that money instead.

 

[Theoldjaffa]

Cars are really expensive in Singapore

 

These assumptions are not perfect but suffice to make an illustration

 

 

To put things into perspective, I will provide an example of a cost breakdown of all factors listed above that makes up the car prices with the New Tier Tax Structure on the ARF with 2 examples below. (I.E. Friendly Family Toyota Altis 1.6L, and a Higher end Luxurious BMW 320I 2.0L )

 

 

 

* Assumption: I have not included the CEV into the calculations for both examples.

 

* I have also used the COE based on the 2nd Open Bidding for Month of Feb-2013 with the New Tier Tax structure on OMV > $20,000 in Example 2 below for the BMW 320I 2.0L

 

* Please also note that OMVs values are not always the same even on the same model of vehicles and they fluctuate with every shipment (mild fluctuation really). This in turns cause ARF values to change as well as Custom Duties and GST. Of course COEs are on bidded basics as well. Therefore car prices are always volatile.

 

 

Example 1: Toyota Altis 1.6L

1.OMV: $15,270

2.COE: $78,301 (Based on 2nd Open Bidding for Month of Feb-2013 for CAT A)

3.ARF: $15,270 (100% of OMV only since OMV is less than $20,000)

4.Custom Duty: $3,054 (20% of OMV)

5.GST: $1,283 (Based on 7% of OMV + Custom Duty)

6.Registration Fees: $140

7.Vehicle Plate Fees: $30

 

Total Cost of Car: $113, 348 (Add up all 1 to 7 together)

 

Borneo Motor List Price: $139,988 (Price with Guaranteed Gold COE within 3 months from Borneo website)

 

Difference: $26,640 (Translates to Profits for Borneo Motor or whatever they can keep after their operating costs are subtracted.)

 

 

 

Example 2: BMW 320I 2.0L

1.OMV: $36,486

2.COE: $92,667 (Based on 2nd Open Bidding for Month of Feb-2013 for CAT B)

3.ARF: $43,080 (Additional Tax Structure of 140% applies to excess $16,486)

4.Custom Duty: $7,297 (20% of OMV)

5.GST: $3,064 (Based on 7% of OMV + Custom Duty)

6.Registration Fees: $140

7.Vehicle Plate Fees: $30

 

Total Cost of Car: $182,764 (Add up all 1 to 7 together)

 

Performance Motor List Price: $216,800

 

Difference: $34,036 (Translates to Profits for Performance Motor or whatever they can keep after their operating costs are subtracted.)

 

 

 

Entry Level Porsche 911 3.8L OMV average is $132, 053. And we are not even going to talk about Lambo or Ferraris where their OMV are in ranges of $350,000 and up. This translate to an ARF of $20,000 for the first Tier of OMV of 100% , $42,000 on the second tier between $20,001 to $50000 range at 140% , and a whopping $147,695 on the last tier for the remainer amount at 180%.

 

 

 

Effectively, the new ARF for a Porsche now is $209,695, a good $77,000 increase from what it was before. Think about what you want to do with all that money instead.

Think u shd give credit to the original writer of this post.

 

[Yeshe]

eh cow elite ok? goat not elite [laugh]

 

only the bull, not the cow ok [laugh]

[Yeshe]

No worries....u behave

 

i forgot leow, whose clone is tat?

[Yeshe]

All the talk talk talk I is got more money than your grandfathers combined. Ask for loan and all you get is an uncomfortable silence.

 

u wanna use your bear paw as mortgage issit? [laugh]

[Yeshe]

I don't think he's ever lied lah. The "table wiper" thing is just a joke, though the punchline escapes me. But I don't think he's ever exaggerated his wealth; however, his comments have rubbed people the wrong way.

 

I think encouraging financial prudence is important - but it must be done somewhat tactfully. If the medicine is too bitter, the baby will just spit it out.

 

tats why the gov throw in the bitter medicine [laugh]

[Throttle2]

There is an old saying,

 

Lies + cigar = throat cancer

 

 

There's a rebuttal to that saying.

 

"Go FUC..K yourself ..."

 

[Theoldjaffa]

There's a rebuttal to that saying.

 

"Go FUC..K yourself ..."

 

Relax man.