(Photo Credit: Gary's Automotive)
Choosing between a new or used car has always been an age-old dilemma for drivers. While both have its merits, deciding which to get can be a tough choice for first-time buyers.
If made into a movie, deciding between the siren call of a brand spanking new vehicle (complete with the alluring new car smell) versus a not-half-of-my-life-savings used car would be 3 whole hours of you rocking back and forth, rhythmically chanting "I don't know la! I don't know la!".
Well, we learnt our lesson and simply won't allow that to happen to you. Take these things into consideration!
(Photo Credit: Dentist in Steveston)
How it works is that there are 2 COE Open Bidding Exercises every month, and basically the collective of eager new drivers wave their dollars until the bidder with the fattest wad of cash wins his $60,000 paper.
This process comes twice a month, and could take months to succeed. If you're patient, then no problem! You'll get it eventually.
If you're really in need of a car, then a used one might be right for you. You can get one on the road in less than a week, depending on the arrangement!
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Unless you're I-own-a-whole-football-team Peter Lim, you're probably thinking of a car loan.
For new cars, all car loan tenures cap at 5 years. Depending on your car's Open Market Value (OMV), how much you can loan varies.
If your vehicle's OMV is $20,000 or less, your maximum Loan to Value (LTV) is 60% of the purchase price of the car, inclusive of taxes, fees and COE. For a vehicle with OMV of more than $20,000, the maximum LTV is 50%.
If you're not sure of your car's OMV, you can check it here!
A new Toyota Corolla Altis (priced around $110,888), has an OMV of about $17,804, which means you can get a 60% loan on your car. Great!
Now… about the remaining $44355 you have to shell out.
What about a used Toyota Corolla Altis with 5 years of COE going at about $65,000? That one requires $26,000.
If paying a new car means pawning your clothes down to your undies, then you might want to invest in a used car- unless you prefer new and premium leather on your bare bottom, of course.
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For those of you that forgot or aren't up to speed, this is what you need to know, simplified.
The Revised Carbon Emissions-Based Vehicle Scheme (CEVS) was implemented to reward cars that release a relatively low amount of carbon emissions per km (CO 2) with high rebates offset from their Additional Registration Fee (ARF), and punish cars that poot out way too much of that bad stuff.
The amount of rebate varies, depending on how much your car releases. Taxis also get more rebate or surcharge as they spend more time on the road.
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That much rebate?! At best, that's $30,000 off your car!
Well, the rebates don't come from thin air. Instead, they're offset from your ARF. Fine and dandy? Not really.
Let's let George Lee, General Manager Auto Germany and Alpine Motor explain. "Since the ARF of the vehicle will be reduced by the amount of the CEVS rebate, the PARF value will also be reduced," and he goes on to say, "if the OMV or open market value of a car is $15,000 and the CEVS rebate is $10,000, then its ARF becomes $5,000 instead of the usual $15,000 (ARF is equal to 100 per cent of OMV)."
Basically, your rebates offset against the ARF in turn lowers the PARF value, also known as your scrap value. For new car users, this could affect whether you'd rather scrap your car for a lower price or extend your car's lifetime by another 10 years and minimize the losses of your lowered scrap value.
(Photo Credit:Sometimes Interesting)
Used cars tend to have higher depreciation than new cars.
Take for example, the Toyota Corolla Altis. A new 1.6 Standard (A) would depreciate at about $10,200 a year. Now, a used Altis' depreciation is around $11,500 per year. The difference is in the hundreds, and even thousands a year. If you're planning to sell your car awhile after, this matters in the sense that, time is money.
When it comes to calculating the final cost, this is something definitely to note.