5 Common Questions when Purchasing a Pre-Owned Car
If you’re reading this, most likely you want to buy a car, but you aren’t sure which to get or how to purchase one. Am I a mind reader? No, but here’s what I can tell you: You might have some options in mind, and you would like to know more about used cars.
When it comes to pre-owned cars, it’s no secret that the used car market is flourishing, with over 7,000 newly minted drivers on the road, and according to LTA figures in 2018, there were about 9,000 transfers of car ownerships per month. So, what is the deal about used cars?
Aside from getting a cheaper purchase price, there are other elements that come into play when making a purchase decision as big as this. Before you say ‘yes’ to your next ride, here are five questions to think about before purchasing a pre-owned car:
- How much are you actually saving?
- Choose a PARF or COE car?
- What is the condition of the car?
- Are there any benefits?
- Where to find good deals?
How much are you actually saving?
We all know that used cars are cheaper in cost as compared to brand new ones. Though, how much will we actually save, if we were to factor in all the hidden costs? First, let’s take a look at the depreciation. This simply refers to how much we need to pay for the car annually.
Another yearly cost would be road tax payment – the greater the engine capacity, the more you have to pay. For vehicles that are older than 10 years, there is an additional surcharge that increases by 10% every year until they reach 14 years old.
Every owned car requires insurance coverage, the most basic one being a third-party cover. In the event of an accident, the third-party coverage will pay the other party for the damaged property, injury, or death. For more comprehensive coverage, you will have to pay more.
Pro tip: To learn how to finance your car, check out the article: ‘Let’s Talk Finance (Part 1): Calculate Budget and Savings for Your Car’
Choose a PARF or COE car?
Preferential Additional Registration Fee (PARF) cars refer to those with less than 10 years of Certificate of Entitlement (COE), whereas COE cars are those more than 10 years old and with a renewed COE. If a vehicle is de-registered within a decade from its first registration date, the registered owner will be given a PARF rebate – which is essentially a percentage of the Open Market Value (OMV).
For cars that have exceeded 10 years’ worth of usage, if the owner chooses to renew the COE, the total cost for the renewal hinges on the Prevailing Quota Premium (PQP). Once the COE has been renewed, the owner will no longer be entitled to the PARF rebate, and will instead be qualified for the COE rebate upon deregistration of the vehicle.
Hence, with the PARF rebate being out of the equation, COE cars would generally be more affordable than PARF cars. However, the interest rates, road tax, and insurance can be costlier for COE cars, for reasons alike. It is important to factor in the maintenance fees in a long run, which can be a huge roadblock, financially and practicality-wise, for the older COE cars.
Before you decide to flip a coin, know that newer does not always mean better, and old can be gold. To help you to narrow down on your choices, check the next step: the condition of the car.
What is the condition of the car?
As with every second-hand purchase, it is a no-brainer to always check the state and shape of the item prior to confirming and making a payment. While it is instinctive to check the exterior, it is equally paramount to take time to work out the internal aspects.
Personally, I like asking my friends for advice. If you prefer having some company and more eyeballs to rule out any red flags, it’s best to bring a family member or friend along, and one with experience in car evaluation would be a bonus.
Any mishaps with the outer appearance would be easy to spot at a glance; scratches, bumps, and any protruding, uneven surfaces are obvious signs that the car was not well-maintained or had been through an accident.
As for the closed-off and internal parts, the damages would be undoubtedly harder to point out. Thus, it is crucial to find a credible and trustworthy car dealer to ensure transparency and authenticity in the information exchanged. Take the time and effort to always do thorough research on the dealer, and try to book a test drive to get a good feel of your next potential ride.
Are there any benefits?
Getting a car is a big deal, especially in the expensive city we live in. Like embarking on a new relationship, it is good to be assured about making the right decision and placing your trust in someone reliable for what comes next – things like aftersales service and warranty are key to providing high levels of assurance.
Whether it’s customer, product, service, or technical support, this is essential for pre-owned cars, as they are more likely to require frequent maintenance. Therefore, it is always wise to check and ensure the cars are certified with a valid warranty.
Where to find good deals?
Of course, when discussing purchase and finances, you mustn’t forget about sharing great deals, especially among Singaporeans. We love getting the best bargains, and for cars, it is no different. However, good offers can be hard to come by.
Therefore, we have compiled some tips on how you can get a better chance at snagging the best deals for your next big purchase.
Check out the article: ‘Buying a car? This is how you can get the best deal’ for great car deals in Singapore’.