So you're thinking of buying your own set of wheels. One of the first few considerations when buying a car in Singapore is whether you should go for a brand new or used car.
Of course, brand new always seems better — everything is shiny and clean, and then there's that distinctive leather smell.
But brand new is also always more expensive. If you can easily afford a hundred grand or more, go ahead.
However, if you're on a tighter budget and just need a vehicle to get you from point A to B, there is a compelling case for secondhand cars, which are significantly cheaper and have lower depreciation.
Where to buy a used car in Singapore
As with most things these days, you can shop for used cars either in person or online.
Used car dealers
Used car dealers are usually found in a cluster, where there are multiple dealers at one site.
The traditional way to buy a used car is to swing by the various secondhand car dealers and browse the cars they have. These brick-and-mortar stores have large showrooms where you can see, feel and smell your choices, and even do an immediate test drive.
The experience will feel quite similar to buying a brand new car, albeit at a shabbier showroom.
However, when compared to online marketplaces - which allow you to buy directly from the previous owner - buying from a used car dealer is usually slightly more expensive.
Used car dealers typically offer really low prices to buy used cars, then recondition and repair them before putting them up for sale. This way, they can fetch better prices.
Online car marts
- Auto Advice (previously sellcarnow)
- Carousell Motors
- DBS Car Marketplace
- sgCarMart (and Quotz)
As such, it's unsurprising that most people do their first round of research online nowadays. There are many online car marts and marketplaces where you can browse used cars for sale, filtering your choices by the make, model, year of registration and more. Heck, you can even browse used cars on Carousell and ask "Price nego?"
Since there are no middleman here (the portal is usually just for listing the ad), prices are usually more competitive. With a bunch of used car listings compiled in one place, it's also easier to compare prices and find better deals. The troublesome part is then arranging for separate viewings of each potential buy and settling the paperwork.
What to check when buying a used car
When shopping for preloved goods, it's always important to do a thorough physical inspection of your goods before committing to a deal. Used cars are no exception, especially given how expensive maintenance and repairs can be.
Used car inspection checklist
Here's a list of key areas to check as adapted from sgCarMart,
- In a well-lit area, check the interiors and exteriors for damages
- Check the engine oil level, looking out for contaminated (black) oil
- Check the condition of the engine
- Check the coolant level and colour (green is good, pink/red is not good)
- Check the transmission fluid level and colour (pink/red is good, brown/orange is bad)
- Check for leaks (usually under the car)
- Check the engine bay, looking out for fresh oil
What to ask when buying a used car
Aside from its physical condition, there are several more administrative things to check. You should ask the seller/dealer:
- Is this a "normal" or off-peak car (OPC, red plate)?
- Is this a PARF or COE car?
- Are there any warranties?
- Is the car certified for quality and condition (Certified Used Cars)?
- When must you renew the road tax?
How much can you save if you buy a used car?
If you're considering a used car, you're probably most motivated by cost savings. So let's talk about how much you actually save by buying a used car.
Generally, with every year of age, the car loses about 10 per cent+ in value. For example, a two-year-old car would be about 20 per cent+ cheaper. Likewise, a five-year-old car would be about 50 per cent cheaper. This makes sense since the "brand new price" is actually the cost for you to drive the car for 10 years.
However, in real life, nobody really compares the prices of cars this way. (If you do, it's time to read up!) There are many other things to consider, and the most common way to decide is using depreciation.
How to calculate car depreciation
Depreciation is basically how much "value" your car loses each year. All cars are depreciating assets, but the first owner bears most of this "cost". There is the Preferential Additional Registration Fee (PARF) rebate to account for, and cars typically depreciate by up to 30 per cent in the first year.
To calculate a car's depreciation, use the total cost of the car, PARF rebate, and divide it by the number of years left.
Used car insurance in Singapore
Finally, when buying a used car, you'll also need to budget for insurance. There are three types of used car insurance plans:
- Third party, fire and theft
- Third party only
Comprehensive offers the broadest coverage, and is what most car loans require from drivers. Third-party cover is the most basic plan, and is the minimum coverage required in Singapore.
Generally, used cars cost more to insure because of wear and tear. Hence, it is important to compare and find the best car insurance available.
This article was first published on GoBear.