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Buying A Second Hand Car? Here’s What To Look Out For!

Buying a car is a huge commitment for any Singaporean. With rising cost of living, owning a brand new car may seem like a mammoth task for some. Since buying used cars in Singapore can cost you 50% to 70% less than a brand new car, it may be a financial decision to consider buying a second hand car in Singapore. 

 

Here’s some considerations that may come in handy when opting to purchase a second-hand car in Singapore.

Is it a PARF or COE car? 

Deciding whether you’d prefer a PARF or COE car. The difference in these 2 cars is the amount you can get back when you de-register the car. 

 

PARF cars:

If the vehicle is registered within 10 years from the registration date, the registered owner will be entitled to COE and Preferential Additional Registration Fee (PARF) rebates, with rebate amounts varying according to the age of the vehicle at the intended deregistration date. The PARF rebates range from 50% to 75% of the Additional Registration Fee (ARF) of the vehicle. In some cases, car owners can recover at least 50% of the ARF value if he chooses to deregister it near the 10th year. 

 

COE cars:

For owners who wish to use the car beyond 10 years after registration, he would have to renew the COE and no longer be entitled to PARF rebates. One either pays the Prevailing Quota Premium (PQP) for a new 10-year COE, or pays half that amount for a 5-year COE for the car to be renewed for an additional 10 or 5 years. COE cars are relatively cheaper and easier on the budget than PARF cars. However, since COE cars are older than PARF cars, higher maintenance costs and road tax will be incurred.

How Much Wear & Tear 

The wear and tear of the car may be a subjective way of assessing the car’s wearability. Having a comprehensive inspection of the car’s mechanisms, exterior scratches, car equipment, safety mechanisms, lights & indicators during inspection before agreeing on the purchase. Ask for a test drive for smoothness of brake mechanisms, sounds, and steering ease. Any damages in these could affect the resale value of the car. 

 

Beyond the observable wear and tear, there are other ways of determining how ‘used’ the car is. 

 

Registration Date:

One way to check the wearability of the car is to check the registration date as it tells you how old the car is. Generally, the older the car, the more worn out the car is. It also shows the remaining days of COE, which depicts the duration that you are able to drive the car before it is deregistered or having its COE renewed. However, an older car may be more well maintained than a younger car, and the same can be said vice versa. Hence, other indicators should be considered in conjunction with the age of the car. 

 

Mileage:

One other indicator is the mileage, which is how much the car has been used during its years on the road. A good range to gauge the use of the car for its age is for the car’s mileage to be about 15,000 to 18,000 km per year.

 

Number of Owners:

The higher the number of owners, the more ‘used’ the car. Anything more than 3 owners for a car’s span of 10 years may be on the higher side. 

 

The Finances 

Depreciation Costs & Deregistration Value 

Cars are notoriously expensive, but what’s important to note is that what makes it so expensive is its depreciation costs, as any car’s value reduces significantly over a 10 year COE period. A general guide is that the longer the outstanding COE or the deregistration value, the lower the depreciation of the car, and vice versa.  

 

Hence, knowing the depreciation of a car gives a good indicator as to how much financial cost one is expected to see lost over the years. Wondering how to calculate the depreciation costs? Fret not as there are many car cost calculators that can help you do the math. 

 

Hidden Costs – Road Tax: 

Road tax is one of those unexpected costs for the car, and it depends on the engine capacity of your vehicle. For cars older than 10 years, an added road tax surcharge, which increases by 10% each year until it turns 14, is also levied. Since road tax is paid annually, it may be useful to check if the buyer has paid for the road tax for the year to save on the sunk cost of road tax for the year. 

 

Too much to handle? Consider a Long Term Car Rental 

Without the need to manage all these expenses and considerations, long term car rental now becomes a considerable option for commuters who wish for the convenience of a car without committing to the high upfront costs, and the long list of administrative documents to oversee. 

 

With BizLink Rent-A-Car, you can receive a fully customisable car rental package that caters to your needs, ranging from 3 days for short term car rental, to over a year, which is then considered a long term car rental. We aim to cater to everyone with our diverse inventory of cars, which ranges from everyday to corporate rental and commercial vehicles.

 

When you rent from us, not only do you get a quick administrative process and reasonable car rental prices, but you also don’t have to worry about the world of considerations . Contact us at +65 6285 6616 or sales@bizlinkgroup.com.sg to learn more about how a car rental solution can fit better into your lifestyle than car-sharing.