With the exorbitant price tag that comes along with
your car, it is no wonder why Singapore is the most expensive
country in the world to own a car. Besides purchasing a house, a
car is probably the second most expensive item that you may
purchase. Unlike a house however, a car isn’t going to appreciate
in value.
Since buying a brand new car is so expensive, many
Singaporeans have turned to the used car market as a “cheaper”
alternative. But is buying a used car really cheaper? Or does it
just only appear that way without actually being so.
If you are one of those who are considering whether to
purchase a brand new car from Parallel Importers, Authorized
Dealers or second hand dealers, you should consider these
aspects.
#1
Maintenance
For a brand new car, you can be sure that it is
accident free and has not been mistreated. On the other hand, one
should definitely inspect a second hand car carefully before
purchasing, as there might be problems that you are unaware of.
Since most of them will still have a few years to go, you are more
likely to spend more on maintaining your used car if it is in poor
condition or has not been well maintained before you bought it.
#2 Parallel
import vs Authorized Dealers
We might be able to afford a “cheaper” car that fits
into our budget if we are purchasing from Parallel importers (PI)
instead of Authorized Dealers (AD) due to the difference in the
price of the car. When purchasing cars from PI, you should take
note of the reputation of the agents as there have been cases of
agents taking deposits and closing down their business without
delivery the car.
You would not want to save a few grand only to end up
not even getting your car and losing your deposit. Also, when
buying parallel imported cars, you should go for one that states
“guaranteed COE without top-ups” so as to avoid additional
costs.
Here is a list of car prices consisting of both new and
used cars extracted from
SGCarmart.
(Disclaimer: There might be slight discrepancy in the
above figures as the prices in the used car market tend to be
slightly marked up as they are open to price negotiation as
compared to new cars )
Our
Analysis
For luxury cars, buying a second hand car saves you a
lot more. However, for people purchasing an entry-level family car,
a used car might even be more expensive compared to a new car in
terms of depreciation per year.
For those who can afford the down payment for a new
entry level Japanese or Korean car, it might be wiser to purchase a
brand new car and spare yourself the potential cost that you may
incur if you buy a poorly maintained used car that already has
problems. In addition, from a per year cost usage basis, you may
not even be saving much, or even be paying more.
The post Is
It Really Cheaper to Buy a Second Hand Car in
Singapore? appeared first on DollarsAndSense.sg.