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PARF, CEVS, Straight Line Depreciation?


Oneguy
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PRESUME ...

 

New Car A - CEVS Neutral

Selling = $150,000

OMV = $20,000

CEVS = $0
ARF = $20,000

PARF = 50% of ARF = 50% x $20,000 = $10,000

Straight Line Depri = $150,000 - $10,000 = $140,000 over 10 years = $14,000 per year

 

New Car B - CEVS Rebate

Selling = $150,000

OMV = $20,000

CEVS = $10,000 REBATE

ARF = $20,000 - $10,000 = $10,000

PARF = 50% of ARF = 50% x $10,000 = $5,000

Straight Line Depri = $150,000 - $5,000 = $145,000 over 10 years = $14,500 per year

New Car C - CEVS Surcharge

Selling = $150,000

OMV = $20,000

CEVS = $10,000 SURCHARGE

ARF = $20,000 + $10,000 = $30,000

PARF = 50% of ARF = 50% x $30,000 = $15,000

Straight Line Depri = $150,000 - $15,000 = $135,000 over 10 years = $13,500 per year

 

Tio Bio?

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Twincharged

All right except C. The rebate is only on the 20k. So you get 10k back. The surcharge is a penalty. Doesn't make sense to make you pay 10k and the. Give you back 5k right?

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unless Car B is way better than Car A ... else not worth to buy

but judging from 10k CEVS rebate ... it's not a powerful car

then why buy a less powerful car with CEVS and yet the depreciation is higher than Car A presumably more powerful car

does not make sense at all

in real life comparison Car B selling price should be $140k or less

unless dealer makan the $10k CEVS as additional profit ... lol

Edited by Wt_know
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unless Car B is way better than Car A ... else not worth to buy

but judging from 10k CEVS rebate ... it's not a powerful car

then why buy a less powerful car with CEVS and yet the depreciation is higher than Car A presumably more powerful car

does not make sense at all

in real life comparison Car B selling price should be $140k or less

unless dealer makan the $10k CEVS as additional profit ... lol

 

In real life it would be

 

New Car A - CEVS Neutral

Selling = $150,000

OMV = $20,000

CEVS = $0

ARF = $20,000

PARF = 50% of ARF = 50% x $20,000 = $10,000

Straight Line Depri = $150,000 - $10,000 = $140,000 over 10 years = $14,000 per year

New Car B - CEVS Rebate

Selling = $140,000-

OMV = $20,000

CEVS = $10,000 REBATE

ARF = $20,000 - $10,000 = $10,000

PARF = 50% of ARF = 50% x $10,000 = $5,000

Straight Line Depri = $140,000 - $5,000 = $135,000 over 10 years = $13,500 per year

 

New Car C - CEVS Surcharge

Selling = $160,000+

OMV = $20,000

CEVS = $10,000 SURCHARGE

ARF = $20,000 + $10,000 = $30,000

PARF = 50% of ARF = 50% x $20,000 = $10,000

Straight Line Depri = $160,000 - $10,000 = $150,000 over 10 years = $15,000 per year
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Turbocharged

SInce things are so complicated sgcarmart should list down OMV , PARF benefits ,and depreciation especially in the used cars section .

But the dealers are only interested to tell you low mileage , accident free , owner's 2nd car , lady owner called Miss Lim etc etc ....

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SInce things are so complicated sgcarmart should list down OMV , PARF benefits ,and depreciation especially in the used cars section .

But the dealers are only interested to tell you low mileage , accident free , owner's 2nd car , lady owner called Miss Lim etc etc ....

ADs for new cars do list all these.

 

Second hand cars........... Buyers beware.

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5-year is like crooked line S-shaped bridge depreciation.

 

Buy new drive 10yr it is straight line depreciation.

You sell after 5 yrs then good luck to you. Lol

 

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hi all - good morning. thank you for all your replies.

 

i do agree that it is a complicated process, especially when calculating a straight line depri for 10 years.

 

in reality, there will be differences in the selling prices but i wanted a situation where everything is keep constant and to see the impact of the CEVS on the depri.

 

technically,

if selling prices are the same,

if omv are the same,

if wear and tear are the same,

(a) cars with CEVS rebates attract a lower PARF, therefore higher depri

(b) cars with CEVS surcharge attract a higher PARF, therefore lower depri

that seems rather strange.

 

buying a car in singapore is not easy - only wish we can all buy based on the look and feel ... but many a times, the decision rides on the how much money we will be losing in the end.

 

 

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Turbocharged

 

(a) cars with CEVS rebates attract a lower PARF, therefore higher depri

(b) cars with CEVS surcharge attract a higher PARF, therefore lower depri

that seems rather strange.

 

 

 

 

 

Not just that ; the rebate is enjoyed by the first buyer and not passed down to subsequent owners . That's why it makes more sense for the rebate to be given over the lifespan of the car , say a yearly road tax rebate . This has been discussed before , but obviously LTA thinks otherwise .

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Not just that ; the rebate is enjoyed by the first buyer and not passed down to subsequent owners . That's why it makes more sense for the rebate to be given over the lifespan of the car , say a yearly road tax rebate . This has been discussed before , but obviously LTA thinks otherwise .

Good suggestion n also the dealers don't get a chance to makan the CEVS rebates which is partially happening now, sometimes even fully. If they insist on doing it upfront, they could also rebate the owner directly as well but LTA will say, administratively it's difficult, on top of the need to put aside cash etc. They always have the final say!

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(a) agree. perhaps LTA should reconsider. the savings on the purchase of an environment friendly car should be on its users i.e. you are using a more environment friendly car while on the road - perhaps, a rebate against the yearly road tax?

 

(b) does anyone know where one can get a reference to the CEVS rebate or surcharge per make/model?

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Supercharged

(b) does anyone know where one can get a reference to the CEVS rebate or surcharge per make/model?

 

http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/car_cost.html

i do agree that it is a complicated process, especially when calculating a straight line depri for 10 years.

 

where got complicated?

 

i oredi done the complicated bits for u, just find out the car's CO2 emission & other info into my spreadsheet (in sig)

and TADAAAH: u get ur straight line depreciation.

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Good suggestion n also the dealers don't get a chance to makan the CEVS rebates which is partially happening now, sometimes even fully. If they insist on doing it upfront, they could also rebate the owner directly as well but LTA will say, administratively it's difficult, on top of the need to put aside cash etc. They always have the final say!

 

 

even if we got the CEVS rebate back. They could always raise prices... then LPPL we still have to go LTA get the refund... very hard to circumvent them

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even if we got the CEVS rebate back. They could always raise prices... then LPPL we still have to go LTA get the refund... very hard to circumvent them

 

My take is that it is easier to camouflage the CEVS rebate in the overall selling price as some buyers are not saavy enough to calculate the margin which was what I tried to show in the BMW Grand tourer thread.

 

Take away the CEVS rebate and it becomes easier to calculate and hence harder for dealers to raise prices indiscriminately. Most buyers are not getting the full CEVS rebate but we are at the mercy of the dealers. That's why I wanted to de-peg this or as one bro suggested, to phase it over the full 10 years.

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Oneguy, your calculations are correct, but they won't be offered in real life.

 

At the same OMV of $20K, car C, with the higher ARF, would mean much lesser profit to the seller than car B or A. Let's ignore other costs and just concentrate on the OMV and government fees (ie ARF). The margins would be:

Car A: $150k-$20k = $130k
Car B: $150k-$20k+$10K = $140K
Car C: $150k-$20k-$20k = $110K

 

In real life, the car dealer should be making similar profits from all types of cars. If he can make do with a selling price of $150K for Car A, then Car B should be selling at $140K and Car C should be $170K. You should then be calculating the depreciation from these selling prices.

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