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Thread: Buying a 2nd hand car.

  1. #1
    Member Koh Li Kuan's Avatar
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    Default Buying a 2nd hand car.

    Hi,

    I am new to this. OMV=Scrap value? Where do I put PARF into the equation?

    I have this scenario.

    A May 2003 car. OMV is $14851, PARF is $9653. Owner is selling at $67000.

    So there are still about 8-9 years to run.

    If I were to take up a 10 year load. Down payment = $7k, it works out to 120 months X $650 = $78K.

    If I were to scrap the car in 2013, how much do I get back?

    Looks like a secondary school Maths question.

    Thanks in advance.

    LK

  2. #2
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    Hi LK,

    This should be the answer you are looking for.
    The scrap value of the car at the end of 10 year = 0.65 x $14851 = $9653.
    At the end of 10 years, you will get back slightly less as the scrap car dealer makes some $$ from you.

    The 0.65 factor can be trace to the current LTA rules. It used to be diff.

    Assuming that you have 9 yrs left, & buy at $67k.

    downpayment = $7k, therefore loan amount = $67-7= $60k

    Assuming interest rate at 2.5%, 9 year loan, interest = 60x 2.5% x 9 = $13.5k
    (all car loans are based on simple interest)

    Total loan amount = 60+13.5 = $73.5k
    monthly payment = 73500/(9*12) = $680.5

    Regards.

  3. #3
    Member Koh Li Kuan's Avatar
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    Quote Originally Posted by dreamseeker
    Hi LK,

    This should be the answer you are looking for.
    The scrap value of the car at the end of 10 year = 0.65 x $14851 = $9653.
    At the end of 10 years, you will get back slightly less as the scrap car dealer makes some $$ from you.

    The 0.65 factor can be trace to the current LTA rules. It used to be diff.

    Assuming that you have 9 yrs left, & buy at $67k.

    downpayment = $7k, therefore loan amount = $67-7= $60k

    Assuming interest rate at 2.5%, 9 year loan, interest = 60x 2.5% x 9 = $13.5k
    (all car loans are based on simple interest)

    Total loan amount = 60+13.5 = $73.5k
    monthly payment = 73500/(9*12) = $680.5

    Regards.
    Thanks Dreamseeker,

    My mind is much much clearer now....

    Rgds
    LK

  4. #4

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    new car is so cheap now ...with $67k you can get a new 1.6litre car. Y dun consider a new car.

  5. #5
    vince123123
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    yeah contrary to popular conception, it appears that cars depreciate kind of linearly...so unless you want to buy a 2nd hand car with like 2-3 years left, u might as well buy a new car instead...price wise almost same.


    Quote Originally Posted by etgoh
    new car is so cheap now ...with $67k you can get a new 1.6litre car. Y dun consider a new car.

  6. #6
    Phildate
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    Default New's better than old!

    Hi there,

    As someone who recently went through the same painstaking process that you are going through, maybe I can give some advice.

    If you buy a new car, you are looking at roughly $6000 depreciation a year. Most 2-3 year old cars depreciate at this rate too so it seems more sensible to get a new car, especially as they seem to have dropped in price recently.

    I've just bought a new Honda Jazz for 70000+ (i can't remember the exact figure) - if you are thinking of scrapping in next 4/5 years you will need to take loan over 7 years unless you want to be left with another lump sum to pay.

    At the end of the day, you are not going to get a bargain, it doesn't work like that in Singapore (everybody's too good at Maths!). At least with a new car you will get a warranty and the satisfaction that the new leather smell gives

  7. #7

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    Sorry for asking a stupid question (never owned a car before, but targeted a 16-17 yr old car)

    What is the scrap value of a COE car? (I'm looking at a Starlet)

  8. #8
    vince123123
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    a 16-17 year old car has no scrap value, only cars < 10 years

    scrap or PARF value depends from car to car. whats a "COE Car" btw?

    Quote Originally Posted by canonsiao
    Sorry for asking a stupid question (never owned a car before, but targeted a 16-17 yr old car)

    What is the scrap value of a COE car? (I'm looking at a Starlet)

  9. #9
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    LK,

    Phil is right about the scrapping of car after owning it for 4/5 years.

    Looking at the sum, 9653/680.5 = 14.2 months. You will only break even approx. 14 months before the COE expires. Which means you still have about 1 year of loan pay.
    If you decide to scrap the car or change the car before this time, you will have to fork out $$ on top of the downpayment $$ for your next car.

    Just make sure it is a Jap car you are buying cause at the 8-9 year of the car, many things WILL start to give you trouble. Jap car can get used parts or are generally cheap.

    For $67k, you can consider a Mitsubishi Lancer new.


    P.S & OT. There are some chio C&C salesgirl in the show room. Incentive to get you there.



    Quote Originally Posted by Phildate
    Hi there,

    If you buy a new car, you are looking at roughly $6000 depreciation a year. Most 2-3 year old cars depreciate at this rate too so it seems more sensible to get a new car, especially as they seem to have dropped in price recently.

    I've just bought a new Honda Jazz for 70000+ (i can't remember the exact figure) - if you are thinking of scrapping in next 4/5 years you will need to take loan over 7 years unless you want to be left with another lump sum to pay.

    :

  10. #10
    Member Koh Li Kuan's Avatar
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    That's what I was thinking too....getting a new one....no point driving a car with problems creeping up...now..what make shall I look into??? Another headache....

    Thanks for all the advice...really appreciate...

    LK

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