Seeking advice on VES rebate

[Lite]

Hi,

I would like to seek advice on whether to buy a new car before or after the new VES rebate in January.

Given that the A2 has an additional $5k rebate in January 2021, say the car is selling at $100k after January vs 102k for now, which is a better deal? (if not 2k difference, what is the margin for it to be still worth the earlier purchase)

I was told by the sale agent that the increased rebate will only have effect if you are planning to sell it after 9-10 years. Otherwise, whether or not the arf decrease by 5k has no significance as selling car/trade-in goes by "market value".

Any advice and insights will be greatly appreciated. Thank you.

[Volvobrick]

Your dealer jiak u 3k rebate out of 5k rebate. Assuming COE premium same. I walk away from this dealer. 

Edited December 2, 2020 by Volvobrick

[Eyke]

depends on selling price, ie. calculate the depreciation

[thebutcher]

Bro, just get the car that you like and can afford comfortably. Life is too short to wonder about what will happen 9-10 years down the road. 

[Mahjong74]

52 minutes ago, Lite said:

Hi,

I would like to seek advice on whether to buy a new car before or after the new VES rebate in January.

Given that the A2 has an additional $5k rebate in January 2021, say the car is selling at $100k after January vs 102k for now, which is a better deal? (if not 2k difference, what is the margin for it to be still worth the earlier purchase)

I was told by the sale agent that the increased rebate will only have effect if you are planning to sell it after 9-10 years. Otherwise, whether or not the arf decrease by 5k has no significance as selling car/trade-in goes by "market value".

Any advice and insights will be greatly appreciated. Thank you.

Lets keep things simple. Last weekend on Nov 29, accompany my friends to view some CAT A car. 

Based on some offer and Guaranteed COE, 

1. If need a car asap and going for Dec COE bid, car selling price is $102K (1 bid)

2. If no hurry, going for Jan 2021 COE bid or later, the car selling price is $97-98K. (6 bid)

For your info and consideration. Thanks 

Edited December 2, 2020 by Mahjong74

[Ceecookie]

The VES rebate is taken from the PARF payable, which will impact the ARF rebate of car.

In simple terms, do u want the 2k upfront discount now or as part of paper value which u get after 10 years or selling the car? 

Personally I rather buy the car now since COE may jump up in Jan which effectively offset the VES discount.

Edited December 2, 2020 by Ceecookie

[thebutcher]

9 minutes ago, Ceecookie said:

The VES rebate is taken from the PARF payable, which will impact the ARF rebate of car.

In simple terms, do u want the 2k upfront discount now or as part of paper value which u get after 10 years or selling the car? 

Personally I rather buy the car now since COE may jump up in Jan which effectively offset the VES discount.

I booked my car last month for registration in jan 2021. Price was locked at the time of signing, so an increase in coe price does not matter. 

[Koizee]

1 hour ago, Lite said:

Hi,

I would like to seek advice on whether to buy a new car before or after the new VES rebate in January.

Given that the A2 has an additional $5k rebate in January 2021, say the car is selling at $100k after January vs 102k for now, which is a better deal? (if not 2k difference, what is the margin for it to be still worth the earlier purchase)

I was told by the sale agent that the increased rebate will only have effect if you are planning to sell it after 9-10 years. Otherwise, whether or not the arf decrease by 5k has no significance as selling car/trade-in goes by "market value".

Any advice and insights will be greatly appreciated. Thank you.

Firstly, what car are you buying? A2 cars are eligible for 15k rebate from jan 2021 but the cars need to have a minimum of 5k ARF, therefore if your car OMV is below 20k, you will not get the full 15k rebate.

Eg: if your car omv is 18k, ARF is 18k before VES rebate (band A2), but as ARF need to be minimum 5k, you will only get 13k rebate instead of full 15k from jan 2021 onwards.

[Mkl22]

21 minutes ago, Ceecookie said:

The VES rebate is taken from the PARF payable, which will impact the ARF rebate of car.

 

 your "P" is in the wrong place.😁 The VES rebate is taken from the ARF payable, which will impact the PARF rebate of car.

[Rickster]

Yes, the additional rebates will be from the ARF of your vehicle. Your scrap value at 10th year will be 50% ARF.

My recommendation is to calculate your depreciation if you were to buy now vs if u were to buy later in Jan. Make your purchase decision based on depreciation.

Always remember, all these rebates are taken from your ARF (which affects your scrap value) and NOT selling price.

Therefore, if u buy a car with tones of rebates (yay for the environment) and the final selling price is about the same... you're screwed. 

 

 

Edited December 2, 2020 by Rickster

[inlinesix]

43 minutes ago, Ceecookie said:

The VES rebate is taken from the PARF payable, which will impact the ARF rebate of car.

In simple terms, do u want the 2k upfront discount now or as part of paper value which u get after 10 years or selling the car? 

Personally I rather buy the car now since COE may jump up in Jan which effectively offset the VES discount.

Your facts wrong la.

VES rebate reduces ARF which inevitably affects PARF.

Unless self import, forget about VES Rebate.  Unlikely to know whether included or not.

[Ceecookie]

59 minutes ago, Ceecookie said:

The VES rebate is taken from the ARF payable, which will impact the PARF rebate of car.

In simple terms, do u want the 2k upfront discount from Jan 2021 or (if register in Dec 2020) as part of paper value which u get after 10 years or selling the car? 

Personally I rather buy the car now since COE may jump up in Jan which effectively offset the VES discount. (moot point, can ignore)

Sorry, i was multi tasking when writing my reply hence my facts a bit wrong. Corrected my post above. 

@thebutcher You also ordered a car with VES rebate? For your case, the only difference versus delivery in Dec is your unit would have less PARF rebate value (aka paper value) since the higher VES discount applied to the car's ARF payable.

Personally I prefer to have higher paper value since I can "redeem" the full PARF when trading in or scrapping my car. Cheers

Edited December 2, 2020 by Ceecookie

[RogerNg_185295]

1 hour ago, thebutcher said:

Bro, just get the car that you like and can afford comfortably. Life is too short to wonder about what will happen 9-10 years down the road. 

But we still need proper financial planning as buying a car is a major expense. 

[Rickster]

17 minutes ago, inlinesix said:

Your facts wrong la.

VES rebate reduces ARF which inevitably affects PARF.

Unless self import, forget about VES Rebate.  Unlikely to know whether included or not.

That's why its best not to further confuse ARF and PARF for the TS or general buyers. So I use scrap value (which is 50% of the ARF for cars registered beyond Feb 2008) as everyone can understand.

This way of calculation, in my opinion, is the most accurate way to determine if a car is worth now or in Jan.

Self import no VES? Does that mean for cars that will kena heavy VES penalty, self import may be much cheaper?

Edited December 2, 2020 by Rickster

[Ceecookie]

15 minutes ago, inlinesix said:

Your facts wrong la.

VES rebate reduces ARF which inevitably affects PARF.

Unless self import, forget about VES Rebate.  Unlikely to know whether included or not.

Corrected my post above. 

Agree with you, too much headache to worry about VES Rebate when buying from AD. Because of market competition, competing car model with VES Band B could actually be sold same price as another model with Band A rebate, coz the AD could forgo more profits by selling cheaper.

Personally, I'll just look at the selling price AND scrap value when shopping for cars. 

[Rickster]

4 minutes ago, Ceecookie said:

Sorry, i was multi tasking when writing my reply hence my facts a bit wrong. Corrected my post above. 

@thebutcher You also ordered a car with VES rebate? For your case, the only difference versus delivery in Dec is your unit would have less PARF rebate value (aka paper value) since the higher VES discount applied to the car's ARF payable.

Personally I prefer to have higher paper value since I can "redeem" the full PARF when trading in or scrapping my car. Cheers

You are right. If the selling price for the cars in Dec or Jan is the same, the one who bought in Dec will have the better deal as you rightfully pointed out, have higher paper value.

[thebutcher]

9 minutes ago, RogerNg_185295 said:

But we still need proper financial planning as buying a car is a major expense. 

No doubt

9 minutes ago, Ceecookie said:

Sorry, i was multi tasking when writing my reply hence my facts a bit wrong. Corrected my post above. 

@thebutcher You also ordered a car with VES rebate? For your case, the only difference versus delivery in Dec is your unit would have less PARF rebate value (aka paper value) since the higher VES discount applied to the car's ARF payable.

Personally I prefer to have higher paper value since I can "redeem" the full PARF when trading in or scrapping my car. Cheers

I dont mind the difference. Considering that the price of the car went up by 6k after the following coe bidding. 

Edited December 2, 2020 by thebutcher

[Kar_lover]

2 hours ago, Lite said:

Hi,

I would like to seek advice on whether to buy a new car before or after the new VES rebate in January.

Given that the A2 has an additional $5k rebate in January 2021, say the car is selling at $100k after January vs 102k for now, which is a better deal? (if not 2k difference, what is the margin for it to be still worth the earlier purchase)

I was told by the sale agent that the increased rebate will only have effect if you are planning to sell it after 9-10 years. Otherwise, whether or not the arf decrease by 5k has no significance as selling car/trade-in goes by "market value".

Any advice and insights will be greatly appreciated. Thank you.

I think the last part that ur dealer said is true. When u sell/trade in this car in the future, it's all market value. There was a time when COE shot up, i sold my 3 year old car then at the same price i bought it 3 years earlier. So likewise whatever ur car can fetch 3 or 5 or whatever years down the road, it depends on the market price then. Also car is similar to property - sell high buy high, sell low buy low. So although i enjoyed a "depreciation free" car but the car i bought after that was a lot more expensive as COE had gone up by a lot more. 

In terms of car price in the future, any additional VES rebate can end up being easily offset by additional demand driving COE upwards.