Your comments on COE Dropping

[weileong]

Most people change cars in 5yrs because in the past the PARF rebate when you deregister your car before 5 yrs was 130% of OMV and the COE was high. Together with the price the dealer would pay for your car body then it is sort of worth to deregister and buy a new car as the new car price would be near the cost you get back when you deregister

After they changed the PARF to 75% of ARF, this is no longer true.

[diabolus]

this applies only to those who got the cars after the change was made. but i think that its already a good steal considering the price of a new car now is almost the same as a 2nd hand car.

the WRX is selling at $94k now....few years back was at $136k. who will buy a 2nd hand Rex anymore? unless you prefer the slim eye design.

last time was quite rare...now almost like toyotas and nissans on the road...

[surfedelic]

Not sure. Heard that they are looking at the posibility of just issuing 5 yrs COE instead of 10 yrs since most drivers will change car in less than 5 yrs.

But where got break even point ? ...now the break even point is not 5 years also ..... if you scrap the new car for the first 5 years .. you only get roughly 82.5 % of your OMV ... .. the moment you roll out the new car .. they already break your "arms and legs "

[diabolus]

I spoke to my friend who works in the bank. He told me the rule 78 was mandatory in the past. But the government didn't scrapped it if you read it down to the dot... now the bank have free play meaning it is up to them to have rule 78 still in the new loan basically to protect them .... but in addition  with another 20% interest rebate penalty currently. If you don't want to have rule 78 tied down and the additional interest rebate penalty then you take the floating interest option.... so whichever suits you ....

Diabolus,

I am not sure with regards to your category ....My FIL pay 50% for the car so his loan amount is only 30K ... I even checked twice with the SE why there is a 20% interest rebate ....she told me it was standard 

I still dun think the HP Act was amended to benefit the finance houses instead of the consumers.if this is really the case, then CASE would have kick up a big fuss!

you might wanna advise your FIL to check out other finance house, wat if the SE apply the loan in full and then use the 50% cash your FIL paid to service the loan...instead of deducting the 50% first then apply for loan.

makes a hell lot of difference to your FIL and the SE's commission.

btw...wat car did your FIL bought? if its a 2L car, usually falls under Non-Act.

[weileong]

Looking at the price of the car from the surface then it seems that the new cars are way cheaper.

But there are people still buying cars that are 2-3 yrs old despite the fact that the price they are paying is close to the price of new car. Because most of them just selling at paper value + body. Those people buy this car and will drive them for 2 yrs till just before 5 yrs then scrape them. Depreciation for these cars are very low, just lost on COE value (of course transfer fees, 10-20 on the body cost etc).

For the newly registered car you can calculate the break even point easily, at least 5 yrs provided you pay 20-30% downpayment and take max 5-7yr loan. A lot of pple buying at 5-10% downpayment and taking 10 yrs loan.. min must drive 8-10yrs.

[surfedelic]

Hmm .... that's sound interesting .... BTW .... he already got the car ..... He bought a vios ........

[diabolus]

yupz...lots of ppl are selling their cars now at paper value.

will be a good steal to get a good TC car instead of new ones.

hhmmm....when did i last saw the 6 yrs old Evo 4 selling at 65k....

[surfedelic]

Diabolus,

I checked it out ..... with regards to your definition of HP act or non-HP act. The definition given by you is correct......but the bank are still using the rule 78 according to my friend who deals with car loan regardless of HP act or non hp act.. ... in order to protect themselves ......but of course .. there are other things which stick to rule 78 eg. period of notification before repossess of cars..

With regards to the removal of rule 78 to benefit consumer -- the government wants to have more transparency as to all the charges the bank made to the consumer ..... and the government assume the consumer is wise enough to sign on the dotted line having understood all the underlying T & C .

Anyway having said all that ... I fully agree with you that it is a steal with the current price ...... but given our kind of lifestyle .. singaporean change car like changing clothe ........I dont think anybody drive their car more than 7 years .....

[diabolus]

OIC,

so the new HP act actually benefits the finance houses more ar.

will have to take note of it when buying cars liaoz.

anyway, dun think i will go for a new car now as yet.

[weileong]

Go for new car can but provided you plan your budget properly and loan less yrs so don't get early repayment penality too much.

[surfedelic]

Go for new car can but provided you plan your budget properly and loan less yrs so don't get early repayment penality too much.

I think the urges to buy new car is very high with the decreasing COE trends ............. maybe downgrade to smaller cc car ........

But I am quite surprise nowsaday you can bid your COE and buy the car separately from the car dealer .......in the past .. even if you bid ..... nobody is going to sell you the car ..

[weileong]

Yes you can bid your COE and buy separately from dealer but I think end up the price is higher than you get the whole package from the dealer.

I also very gian getting a new car but after some careful calculation I decided to carry on driving my old car. Then just scape it before 5yrs... sign... another 18-19months more lol.

[surfedelic]

Yes you can bid your COE and buy separately from dealer but I think end up the price is higher than you get the whole package from the dealer.

I also very gian getting a new car but after some careful calculation I decided to carry on driving my old car. Then just scape it before 5yrs... sign... another 18-19months more lol.

But not the case actually .... the car price they quoted me is pegged at the current price COE ... so I calculate ... even if I get 14K .. it is still cheaper .. not sure what the catch .. heard from my friend that the OMV is different from some car dealer .. so got to be wary .....

My car is like yours also left about 1.5 years to reach 5 years .... but actually if scrapped earlier might be the same because the COE is half of what i am having now ..... if your COE is 30+ then every year depreciation is 3K if now ..... lets says 14K .... then it is only 1.4 K /yr ... anyway it is going to be scrapped ... but the body for export ... not sure any bro outside got any lobang in car export ... if approach the car dealer .. sure kenna "tok" here and there ...

[weileong]

How I calculated is that right now every year it is only abt $3k depreciation for me. No matter how I am safe guarded because the OMV 130% + COE value + body price.

The only thing that will depreciate is $3k yearly for COE and body price maybe lost another $1-2k so it is at most $6k to keep the car for abt 18-19months.

On paper it looks like getting a new car maybe depreciation also around there. Since already have a car to drive and since the loan also almost going to finished paying (most of the interest already paid) then maximise a bit ah. Also market siutation like not so confirm one.

You get the new car now then the depreciation too high, 2 yrs later you lost maybe more than $20-$25k. Also got rumour floating ard that the goverment will announce a lower PARF or totally do away with the PARF so new car price will further drop again. That's why I figure better to hold and wait first. You can't go wrong by keeping your current car, at least that's true for my case.

[surfedelic]

How I calculated is that right now every year it is only abt $3k depreciation for me. No matter how I am safe guarded because the OMV 130% + COE value + body price.

The only thing that will depreciate is $3k yearly for COE and body price maybe lost another $1-2k so it is at most $6k to keep the car for abt 18-19months.

On paper it looks like getting a new car maybe depreciation also around there. Since already have a car to drive and since the loan also almost going to finished paying (most of the interest already paid) then maximise a bit ah. Also market siutation like not so confirm one.

You get the new car now then the depreciation too high, 2 yrs later you lost maybe more than $20-$25k. Also got rumour floating ard that the goverment will announce a lower PARF or totally do away with the PARF so new car price will further drop again. That's why I figure better to hold and wait first. You can't go wrong by keeping your current car, at least that's true for my case.

Patience is the name of the game ..... if you could drive the longer ... the better .... the COE is already reaching saturation point soon.... according to what i read the current bid is only 1.2 bid per COE .. whereas in the past it is like 4 to 5 bid per COE ..... ... toyotas SE told me they are changing job soon ... ... it will not be the same again. But Agree strongly the market sentiment is not so promising for this year as compared to last year ... so expect ...more roller coaster COE .....

[Creetin]

i feel 2nd hand cars, provided its in good condition, offer a safer bet. At least u wont get tied down.....

[surfedelic]

Creetin,

You are dead right .. 2nd hand car cushion you from the up and down of COE ... especially now the government want to remove the PARF slowly ...and totally ... so the next moment you know your car value plummet till 1/2 the value when they announce. The only concerns is of course the condition of the car ... you can never be sure .... the technology is so advance untill you can't tell whether it is repaired or not ... so if you buy 1 - 2 years not too bad really ...a steal as it is still under warranty.

[diabolus]

have your car check and tested by STA before buying.

if the dealer gives you crap like 'no problems with car etc etc' and refuse to do the test...it probably means that something wrong with the car.

the standard trade practice is -

Dealer pays for total cost of test ($100++) if you buy the car after test.

Dealer pays half and you pay the other half if you did not buy the car after test.

Depending on the age of the car. Usually a "B" will be a good result.

small price to pay for peace of mind IMO.

[joeyttk]

one question about 2nd hand car is that their current COE is very high. So if I buy a car with 30k COE, I will be depreciating a lot more as compared to the new car with 14K COE.

so isn't it no good to buy 2nd car now ? unless, I can buy a 'scaped' car and use the new 10year COE on it. Does anyone know if this is possible?

i.e. buy a 3 years old car [with no COE, because it was scrapped], but bid for the new 10-year COE ?

[diabolus]

you can't buy a scrapped car in SGP...

once its scrapped its gone.

but i think you can change COE,,,not too sure.

[yazid]

sad...that's my comment. Just bought a car SFN#@*%& ....    

No need to be sad brother..

You still got COE Rebate+PARF if you scrapped the car (the change should not imapct existing ones).

For those who bought after the change, they will lose even more if they scrapped.

Imagine at 10 years, they get zero. At 10 years we stil get back our PARF.

So now is the best time to buy before they scrapped the PARF.

Buy cheap, paper value also cheap.

[weileong]

The PARF will drop by 10% COE yearly. They will announce this is april when they announce the new COE quota. Currently now PARF at 55% OMV, in april it'll left with PARF at 45% OMV then eventually no more PARF and you get back only the price for the body (if any).

Got PARF no PARF the annual depreciation also around the same. Government new measure is to discourage people from scrapping their relatively new cars as they wish.

Now is you pay more upfront then get back the PARF at end of 10years, not much difference unless you scrap early.

Somemore because of the higher price (due to PARF + annual depreciation) you actually had to take higher loan amount and pay more interest

You go buy 2nd hand car they also calculate by PARF + (annual depreciation * no of yrs left)

[surfedelic]

With the curent trend of Parf value reducing - car should be cheaper (doesn't seems to be the case) ..... WL what you said "Got PARF no PARF the annual depreciation also around the same. " By right the car price should drop but it doesn't seems to be the case ... I think the car dealer will play a waiting game until the market is dry then they lower down the car price.... then your depreciation should be lower ....

I think this year will be an exciting year - they found that the number of pple scrapping car in the year 2004 is relatively high .... so prepare to have more excess COE rolling in for biding all the way to May ....+ PARF reduction in April .....these news is sufficient to guesstimate a reduction on the overall car price tag.. ... which also means car price should not be able to sustain in the long run based on the current price tag ..............History will repeat itself ...those who bought with the old parf 130% will also change car ....as there is no point chalking up higher depreciation if the current COE plummet to new lows ..... and in the end more car will be scrapped again and then more COE ..... properly this will last another year ......before the saturation point is reached where there is no more old parf left .........and only the rich change car.

[weileong]

Good time for poor pple like us to change car liao

[surfedelic]

Good time for poor pple like us to change car liao

Yah man ..... ....hey but wait ...you poor meh .... got ferrari pump .... mime only a korea-made hyundai equivalents - haliea pump ..

only poor man like us so calculative .......