Before You Buy

Cars are one of the most expensive purchases in Singapore. Even purchasing a basic, standard model in Singapore is costly. Adding to that, there are other costs to be paid for too, such as maintenance costs, insurance premiums, and the monthly installment. You’d also have to pay for COE and road tax! That all amounts to a substantial sum. However, owning a car is no doubt useful and more convenient. As such, many people have turned to buying used cars as a way to own a car.

However, you can’t just go out and buy a used car. There are factors to consider before doing so. After all, you’d want to be purchasing something that’s value for money! Therefore, we have put together this short article to help guide you in buying a used car. So without further ado, let’s get to it!

Learn more about renewal of road tax here.

Car Insurance Premium

First and foremost, every car owner in Singapore is required to have motor insurance. This is a must and hence, this is a sum that you’d have to fork out. However, motor insurance is beneficial! If you ever get into an accident or find vehicle damage, you’ll be able to use your insurance to cover a large majority of the cost.

When it comes to your motor insurance premium, there’s a variety of factors that affect the total sum. Insurance companies look at your age, gender, qualifications for a No-Claim Discount, years of driving experience and occupation when deciding your insurance premium. They will also calculate how likely you are to file a future insurance claim. If you are more likely to do so, your insurance premium will understandably, be higher. There are several different insurance companies in Singapore, and hence, you should look at the different policies and schemes available for you. Some policies may allow you to have a lower insurance premium. You should also look at the terms and conditions before signing!

Payment: Full Cash or Loan?

Secondly, how are you paying for your car? Are you paying in full at once? Or are you paying a downpayment and refinancing the rest of the cost? For most car dealers, they will offer refinancing services. Alternatively, you could go to a bank for an auto loan.

If you can’t afford the downpayment itself, you could always take a personal loan from a bank. However, this suggests that you do not have the financial ability to afford a car. If so, you might want to reconsider getting a car! You could always get a car later on.

How much will you be paying for road tax?

The next cost to consider is road tax. On average, a 1.6-litre car would cost around $740 a year. If your engine capacity is bigger, it would cost even more. This might seem pretty affordable for a year however, this averages out to around two dollars a day. If you are not planning to use your car everyday, it would not be all that worth it! If you have a bigger car, this will cost even more.

How much will maintenance costs be?

The next cost you’d have to think about is your maintenance cost. If you’re getting a used car, chances are that you’ll have much more maintenance to pay for. This is important as you’d want your car to be running well and hence, ensure that you would not get into accidents. A number of car accidents are caused by poor maintenance. Maintenance does not refer only to car breakdowns or faults in your vehicle. It also includes maintenance and repairing of wear and tear parts. For example, you’d need to replace tires when the tread wears out. Furthermore, maintenance is required to ensure that your vehicle does not reduce in value too quickly.

The cost for maintenance could vary but largely, it depends on how old your car is, the mileage, and engine capacity. If you are getting an older car, more maintenance will probably be needed. In other words, the cost will be higher. However, getting a newer car will also cost more. In other words, it all evens out.

PARF or COE?

This is another cost to consider, especially if you are in Singapore and buying a used car. PARF stands for Preferential Additional Registration Fee whilst COE stands for Certificate of Entitlement. If you haven’t bought a car before, here’s what they mean. A PARF is only available for a car that has been deregistered before or just at the end of it’s initial COE cycle. At this point, such cars are eligible for PARF rebates. A COE car is then one that has had it’s Prevailing Quota Premium paid and hence, has a renewed COE. Once this car is deregistered, no PARF rebate is allowed.

So which one should you go for? Well, it depends on how much you can afford. PARF cars are costlier as you’d have to make a higher upfront payment. They are also newer and have been used less. Therefore, you wouldn’t have to pay as much for road tax and maintenance. If you can afford the upfront payment, a PARF car may be your choice. If you can’t afford it and are just looking for something affordable, a COE car would suit you more.

How ‘used’ is the car you’re thinking of?

Lastly, how used is the car you’re looking at? You should check to see if there’s any leaks or corrosions. Additionally, how does the condition of the car look? Is it clean? Does it smell weird? These can all be signs that the car wasn’t properly maintained and hence, would require more maintenance in the future.

Secondly, mileage is also another factor to look at. If the mileage is high, the car would be less expensive. This is because it means that the car has been used more and exposed to more wear and tear. Therefore, it may require more repair and maintenance in the future. Mileage is not always a complete indicator, but it should be something to consider. In general, you would want a car that has an average annual mileage of between 5000km and 18000km.

Another consideration is how many owners have previously had the car. If there have been several owners, this could indicate that the car has some issues and hence, was sold off. This is a sign to stay away from the car. Lastly, you should always personally inspect and test drive the car. This will give you the best feel of the car and help you in making your decision.

Conclusion

In conclusion, those are the few factors you should consider when purchasing a used car! With this article, we hope that you’ll be able to choose the right used car to get! Good luck!