With the exorbitant price tag that comes along with your car, it is no wonder why Singapore is the most expensive country in the world to own a car. Besides purchasing a house, a car is probably the second most expensive item that you may purchase. Unlike a house however, a car isn’t going to appreciate in value.
Since buying a brand new car is so expensive, many Singaporeans have turned to the used car market as a “cheaper” alternative. But is buying a used car really cheaper? Or does it just only appear that way without actually being so.
If you are one of those who are considering whether to purchase a brand new car from Parallel Importers, Authorized Dealers or second hand dealers, you should consider these aspects.
For a brand new car, you can be sure that it is accident free and has not been mistreated. On the other hand, one should definitely inspect a second hand car carefully before purchasing, as there might be problems that you are unaware of. Since most of them will still have a few years to go, you are more likely to spend more on maintaining your used car if it is in poor condition or has not been well maintained before you bought it.
#2 Parallel import vs Authorized Dealers
We might be able to afford a “cheaper” car that fits into our budget if we are purchasing from Parallel importers (PI) instead of Authorized Dealers (AD) due to the difference in the price of the car. When purchasing cars from PI, you should take note of the reputation of the agents as there have been cases of agents taking deposits and closing down their business without delivery the car.
You would not want to save a few grand only to end up not even getting your car and losing your deposit. Also, when buying parallel imported cars, you should go for one that states “guaranteed COE without top-ups” so as to avoid additional costs.
Here is a list of car prices consisting of both new and used cars extracted from SGCarmart.
(Disclaimer: There might be slight discrepancy in the above figures as the prices in the used car market tend to be slightly marked up as they are open to price negotiation as compared to new cars )
For luxury cars, buying a second hand car saves you a lot more. However, for people purchasing an entry-level family car, a used car might even be more expensive compared to a new car in terms of depreciation per year.
For those who can afford the down payment for a new entry level Japanese or Korean car, it might be wiser to purchase a brand new car and spare yourself the potential cost that you may incur if you buy a poorly maintained used car that already has problems. In addition, from a per year cost usage basis, you may not even be saving much, or even be paying more.
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