Why used cars can be a better choice
Cars, being super expensive in Singapore, are a status symbol for a lot of people. And with such status symbols, a lot of people want the best, the latest and the newest. Brand new cars are no exception. They give the owner a sense of excitement, a sense of pride (being able to afford a brand new car in Singapore), and joy (who wouldn't be gleaming with happiness from ear to ear when receiving the keys to their brand new car?!)
Some car buyers also opt for a brand new car straight from the showroom as they are perceived to be more reliable, hassle-free and after sales service will be easier because of the warranty that the car comes with.
In Singapore however, with such high car prices, a used car can be a good choice for car buyers on a budget. This is because a brand new car can depreciate by up to 30% in its first few years!
Imagine buying an expensive product, only for its value to drop by so much just a short while after owning it.
It’s no secret that cars are depreciating assets (with the exception of collector’s or limited edition cars which can appreciate in value). However, for most cars, the bulk of depreciation takes place in the first few years of ownership. If you opt for a used car, the first owner would have borne this cost for you. So you can get the same car, 1 or 2 years later at a big discount.
For a car which costs $150,000 brand new - this can be a tens of thousand dollars in discounts for you, if you are willing to wait just 1 or 2 years. This also mean that used cars can be great value for money!
Especially for car buyers on a budget - you can get some great cars for a lot less. A model which was out of your budget can now be sitting in your garage … ok scratch that - your carpark (because Singapore)
The concern or worry that a lot of car buyers have when considering used cars is the warranty and the reliability of the car, since they cannot always get the car’s history from the dealer. And this is a valid concern which we truly understand as car buyers ourselves.
This is why a pre-inspection purchase is important, and you should also examine the car thoroughly when you go down to look at the car. If you have any doubts or questions, ask the dealer right away. An honest and sincere dealer will have nothing to hide, and it can show in the way they answer your questions. If you at any moment feel unsure or uneasy, go with your gut feeling and walk away. Remember, there are many other cars out there !
Another thing to note is that the average Singaporean driver only drives about 17,000 km per year, or about 1,400 km per month - which is pretty low. Modern cars are designed to last hundreds of thousands of kilometres, so this is not too big an issue (But do check that the mileage and the age of the car matches. e.g an 8 year old car should not have just 40,000km on the clock)
Used cars are also cheaper to insure as finding used car parts are easier (since the car model has been around for awhile). Depending on your loan or if you have fully paid for the car, you are also able to get third-party insurance for your car instead of the usual comprehensive motor insurance coverage, which is typically required by banks and financial institutions.
As third party motor insurance is cheaper than comprehensive insurance, this can help to bring down the cost of the car for you.
With used cars, there is also a shorter waiting time. From the moment you sign on the dotted line, it can be as short as 2-3 days till you get the keys to your car. For brand new cars, the waiting time can be a month or more as the car most likely has to be built first, then shipped to Singapore.
The COE bidding process is also something you have to consider, as there can be different COE packages offered by the dealer which have different terms and waiting times. With used cars, the COE is already settled by the first owner, which means you can simply pay for the car and drive it off after the paperwork has been settled.
Lastly, despite the number of cases of used car dealers suddenly closing shop going around the past few years, causing their customers to be left in the dust, do not lose faith ! There are big, reputable dealers that have attractive warranty packages for their used cars.
Plus, Authorised Dealers (e.g Borneo Motors for Toyota, Performance Motors for BMW) also have certified pre-owned programs, which offers used car buyers a peace of mind, knowing that the Authorised Dealer has performed a thorough check of the car before selling it to you. However, we noticed that these cars also comes with a higher price tag as compared to regular used car dealers. Whether the price difference is worth the peace of mind is up to the individual.