Car Buyer Advice

5 rookie mistakes to avoid when buying a used car in Singapore

Given the recent certificate of entitlement (COE) hikes, and with Category A’s quota premium (QP) reaching $70,000, many drivers have turned to a more viable option of buying a used car. Additionally, others are looking to sell their current vehicles.

There are pros and cons for everything, and especially for a big life investment such as buying a car, you definitely want to take extra caution to avoid forking out more in the long run. Here’s a quick overview of the advantages of buying a used car.

For starters, a used car requires a much lower down payment – and no, we’re not talking about a small difference of a few cents to a dollar. You can, in fact, save over $50,000, if you were to purchase a pre-owned A model as compared to buying a new A model. Moreover, you don’t have to worry about COE bidding, and generally, used cars provide better value for money as most of their depreciation has already been absorbed by the previous owner.

If you’ve been thinking of getting a car, now’s a good opportunity to explore the used car market. To help you make informed choices, here are five common mistakes to avoid when purchasing a used car in Singapore.

Not checking if it’s a COE or PARF car

The difference between a COE or Preferential Additional Registration Fee (PARF) car is not just an alphabet short, and depending on which you end up with, it can affect your car’s value when you eventually sell or scrap it.

(Source: OneMotoring)

A PARF car is aged below 10 years old and is entitled to both COE and PARF rebates upon deregistration. Refer to the table above to calculate the PARF rebate. This rebate allows you to recoup the Additional Registration Fee (ARF), which was already factored into the price of the car when it was first purchased.

As a COE car has passed the 10-year mark, upon deregistration, you will be able to recover the unused portion of the COE. The COE rebate can be calculated using the formula below:

COE rebate = (QP paid x unused period of COE left) / 120 months (10-years of COE)

“So, which is cheaper?” To answer this, COE cars are generally cheaper to own than PARF cars. Although cheaper than PARF cars, COE cars tend to incur higher maintenance costs and road tax than PARF cars.

Not doing a thorough background check

Major OOF if you missed doing this step! It’s like diving headfirst into a deep ocean full of sharks. To purchase a car and ensure you’re not getting a lemon, you need to do your homework.

It never hurts to ask more questions about the car, especially if it has relatively low mileage. Some good questions you can ask are: “Were there any repairs made?” “Can you show me the maintenance records?” “How many vehicle transfer ownership did this car experience?”

If the dealer is adamant that the car is in mint condition despite the countless ownership changes, it would be wise to ask him for the car’s maintenance records to support his claims. In addition, with the maintenance records, you will then know if the car has been well taken care of. The records should also highlight any major repairs that have been made to the car.

On the other hand, if repairs were made to key parts of the car, like brakes, engine, and gearbox, it could indicate a faulty component that emerged from poor maintenance or an accident. To avoid having to cough out a huge amount of your savings for future repair costs, it’s best not to buy vehicles with poor maintenance history and those with multiple previous owners.

Failing to do a test drive and a car evaluation

Young VIetnamese salesman showing dashboard and explaining automobile characteristics to female customer

Never shy away from asking for a test drive. This way, you’ll be able to spot any damages to the suspension or steering wheel. Pay attention to see if there are any warning lights on the display panel. Furthermore, this is a good time to spot any kinds of whining or humming noises.

Regardless of the car’s transmission, the gears should shift seamlessly and quietly. You surely don’t want a noisy and cranky ride disrupting your focus on the road.

During the test drive, depress the brake pedal a couple of times to make sure it’s not overly spongy. The brake pedal should offer good resistance and not sink most of the way to the floor when applied. And if the car vibrates heavily upon applying the brakes, the front brake discs could be distorted. Additionally, check for smoke emitting from the tailpipes. The common ones are usually black or white smoke, which can be signs of problems to come.

The car will be evaluated according to the Standard And Functional Evaluation (SAFE) checklist set by the Consumers Association of Singapore (CASE). Click here to read about the SAFE Guide to buying a pre-owned car in Singapore.

Settling for a less than ideal loan

To lower the cost of monthly repayments, car buyers usually take up a long-term car loan. While you might be paying less each month, you could incur a higher overall cost at the end of your loan period due to the accumulated interest. Therefore, to ensure you have more than enough for your personal loans and living expenses, it’s wiser to think twice before jumping the gun and applying for any unnecessary loans.

Lastly, you should always do your due diligence and compare the interest rates of a used car dealer’s in-house loan with a typical bank loan. The latter might offer you a more attractive loan package than an in-house one.

Not getting a comprehensive car insurance plan

Last but certainly not least, you should also look for a comprehensive car insurance plan that will protect you and your car in the event of an accident or breakdown.

Third-party only (TPO) car insurance is the minimum requirement in Singapore. It’s cheaper and only covers damages to other people’s cars. Comprehensive car insurance usually costs a few hundred bucks more but covers practically anything that might happen to your car and including any other parties involved.

Which one you decide on depends on the car’s value and age. Consider TPO if your car is at least 10 years old and fully paid off. For pre-owned cars, you’ll definitely want to get comprehensive car insurance. Otherwise, you’ll be in a world of pain when a life is at stake and your vehicle is damaged.

If you’re considering purchasing a pre-owned car, we’ve good news for you! Book an appointment with us today at and receive a complimentary consultation. Also, check out our ‘Used Car Buying Guide’ for more information.

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