20% depreciation in first year? true?

[Ahseng]

Hi guys, heard from an old friend that says new car once on the road already -20% liao. So i take it that he meant 20% depreciation in the first year.

 

Maybe is this why people always say the first 2 to 3 years the first owner bears the brunt of the steep depreciation?

 

Is this assumption near reality?

1st yr : 20% depreciation

 

2nd year: 10% dep

 

3rd year : 10% dep

 

rest of the 7 years divide equally the remaining value.

 

 

[Angcheek]

some will be 30% for first yr.

 

Most dealer will not take in your car if they cant get good discount from owner and high penalty for selling off car during 1st year. Most buyer will prefer to buy new instead of 2nd hand if the price is not attractive

Edited June 12, 2013 by Angcheek

[BlueOldMan]

Not really black n white 20% ba but cfm is first owner most shiong la

But this is history

Now car pricing so crazy

Some used car owner now maybe higher dep per year than that car first owner

Hahaha Sg boleh too

[Ahseng]

so can use this formula to get current used car pricing? oneSXXXX.com has pricing history of cars.

Edited June 12, 2013 by Ahseng

[Budgetice]

Got one grp make.. Those coe very low ones

[Chucky2007]

Hi guys, heard from an old friend that says new car once on the road already -20% liao. So i take it that he meant 20% depreciation in the first year.

 

Maybe is this why people always say the first 2 to 3 years the first owner bears the brunt of the steep depreciation?

 

Is this assumption near reality?

1st yr : 20% depreciation

 

2nd year: 10% dep

 

3rd year : 10% dep

 

rest of the 7 years divide equally the remaining value.

mainly due to dealers profit.. When u buy a car, it's omv+ARF+GST+COE+dealer profit..

 

When sell the car after one year, it's scrap value at that point in time+some additional value..

 

[Hydrocarbon]

mainly due to dealers profit.. When u buy a car, it's omv+ARF+GST+COE+dealer profit..

 

When sell the car after one year, it's scrap value at that point in time+some additional value..

 

Ya! Always wondered why the initial depre so high, but forgot to count dealer profit. Which can be quite a lot..

[Pisces69]

Hi guys, heard from an old friend that says new car once on the road already -20% liao. So i take it that he meant 20% depreciation in the first year.

 

Maybe is this why people always say the first 2 to 3 years the first owner bears the brunt of the steep depreciation?

 

Is this assumption near reality?

1st yr : 20% depreciation

 

2nd year: 10% dep

 

3rd year : 10% dep

 

rest of the 7 years divide equally the remaining value.

 

 

It also depends now with COE.

 

If u buy car today at COE $80K and next month COE drop to $20K....U can b sure yr 1st MONTH depreciation is going to b more than 20% let alone 1st YEAR.

[Ixus75]

Also depends brand of car. Some brands have poor resale value.

[Solar]

imo, it depends the timing (eg. coe price)

 

i bought my 1 year old car 2nd-hand. coe was around 35k.

1 year later (2yr plus old), coe around 6xk, the resale price actually stayed.

if i try to sell, i won't make a loss, ie. i get to drive my car free for a year.

 

similar for new cars.

if after you bought the car, the coe chiong up the roof, your depreciation for that year (the time you sell) won't be that high.

Edited June 13, 2013 by Solar

[RadX]

for me i made when i sold the porsche....$15k....cos of the creeping COE. Good dah, drive for free n make profit summore

 

oni in sg [laugh]

[Ahseng]

Hmm so it means that whatever way we comeup with to findafair value it will not work because dealers peg the value to new coe prices (godamn high). Like that hard to bargain the price down.

 

imo, it depends the timing (eg. coe price)

 

i bought my 1 year old car 2nd-hand. coe was around 35k.

1 year later (2yr plus old), coe around 6xk, the resale price actually stayed.

if i try to sell, i won't make a loss, ie. i get to drive my car free for a year.

 

similar for new cars.

if after you bought the car, the coe chiong up the roof, your depreciation for that year (the time you sell) won't be that high.

 

[Wt_know]

yeah, it's all depends on coe aka new car price

 

ie: new car price = $200K, if new car price drop to $170K or move up to $230K ... x/y/z also move in tandem

1yr old car = $x

2yr old car = $y

3yr old car = $z

 

owner with low coe will not sell/trade-in their car cheaply if new car price is sky high

owner with high coe is not able to sell their car because of low new car price will either cut loss or die die continue to drive the car

 

uniquely singapore. in the rest of the world, budget constraint go for used car.

in singapore, go for used car but the price is pegged with "current coe" aka the new car price

 

Hmm so it means that whatever way we comeup with to findafair value it will not work because dealers peg the value to new coe prices (godamn high). Like that hard to bargain the price down.

Edited June 13, 2013 by Wt_know

[Ixus75]

Hmm so it means that whatever way we comeup with to findafair value it will not work because dealers peg the value to new coe prices (godamn high). Like that hard to bargain the price down.

 

Nowadays, dealers take in car at near paper value. I believe there is room for negotiation.

[Solar]

for me i made when i sold the porsche....$15k....cos of the creeping COE. Good dah, drive for free n make profit summore

 

oni in sg [laugh]

 

ya.. must be lucky and able to time zun zun.. seems like buying property

[RadX]

ya.. must be lucky and able to time zun zun.. seems like buying property

 

 

flipping. It worked for the next car and then after that CM lai liao...sian

[Atrecord]

Just bear in mind that for new cars, price is made up from

 

OMV + ARF + reg fee + excise duty + COE + dealer mark-up

 

All used car prices are supported by a base line, which is the scrap value. Add to this the perceived value of the car by the market and you get the resale value/price. Once out of the showroom, what happens to this value is:

 

1) COE: ok, since it's pro-rated by govt, dependent on time used. Value won't drop disproportionately

2) PARF rebate (which is the equivalent of OMV + ARF + reg fee + excise duty when new): is attractive only from 5th year of ownership onwards. Any car newer than 5 yr, will get same PARF as a 5-yr old car

3) dealer mark-up: for sure gone, when you're selling

 

So once a car is bought, the big impact during the first few years is from #2-3. Loss of 20-30% should not be uncommon.

 

I bought a nissan sunny at $74K when new years ago. When i sold it off at market value abt 2.5 yr later, i lost 34% of the original price...

[Solar]

Hmm so it means that whatever way we comeup with to findafair value it will not work because dealers peg the value to new coe prices (godamn high). Like that hard to bargain the price down.

 

not really fair value in sg...

 

not long ago, a 1yr old merc c180k was selling cheaper than a new honda civic.

how can it be fair? only compare the market value during the same period. ie. 2 civics what price, what condition, what year, then decide if you wanna buy or wait.

 

you can still bargain down..perhaps knock a couple of k down the advertised price.

it depends on how you do it.. one good way is like finding fault with the car loh...