Buy low sell low

[mpv_lover]

Hi guys... I'm noob, hoping to seek your advice if the below is pure marketing talk

 

I was told that there is no point to wait for coe to lower since my trade in car will correspondingly lower.

 

buy low sell also low. zero sum game. Does this make any sense? Age of trade in car matters?

 

I recalled some ppl agreed with this. However some have a different view. Confused

Edited March 18, 2015 by mpv_lover

[Vega]

As long you don't take high loan and get into negative equity, it doesn't matter buy high or low.

[Thaiyotakamli]

Same thing unless now u don't have car or sell high then wait market down then buy new low

[Chuapcd]

Am I right to say that if your car is near 10 yo, how low can it be? Base value should still be there regardless the current COE?

[mpv_lover]

Am I right to say that if your car is near 10 yo, how low can it be? Base value should still be there regardless the current COE?

Base value is lta scrap value. If left a year Dealer take in at around same Vale as lta scrap maybe plus a few hundreds. That's what some ppl here claims so. Anyone can verify?

 

Trade in a few years left car dealer will offer better rates cos ppl will still buy compared to less than a year. Hmm... true?

 

So if wanna trade in have to do so when car still 3 years left or at mostrich 3 years left. 1 year left car might as might drive finish since trade in get scrape value.

 

Advice pls?

Edited March 18, 2015 by mpv_lover

[Enye]

Base value is lta scrap value. If left a year Dealer take in at around same Vale as lta scrap maybe plus a few hundreds. That's what some ppl here claims so. Anyone can verify?

 

Trade in a few years left car dealer will offer better rates cos ppl will still buy compared to less than a year. Hmm... true?

 

So if wanna trade in have to do so when car still 3 years left or at mostrich 3 years left. 1 year left car might as might drive finish since trade in get scrape value.

 

Advice pls?

Depends on how desperate the AD is to close your deal

 

When showrooms are crowded, definitely not easy to nego

 

Also look at the AD margin at prevailing coe price

 

Higher margin easier to nego

 

That's why you have such wide range of opinions here because different people bought different cars at different times

[Wt_know]

wah .... so many waiting, timing, newcomer buyer want to buy car ar

no wonder coe is up all the way like viagra effect ... lol

Edited March 19, 2015 by Wt_know

[Andyngps]

Am I right to say that if your car is near 10 yo, how low can it be? Base value should still be there regardless the current COE?

 

Agreed. May not apply if your car is like left a few months. But if still have say...a few yrs to go and depending on the make and current resale price and your paper value, then maybe yes. But nevertheless if coe crash to below 40k, this theory may not work as your old ride may not crash more than 20k. So the best is still to do a simple scenario estimation based on your car purchased price back then (assuming all loan settled).

 

For example, say you were driving an altis 1.6 bought in march 2008. The market selling price is about 48k now (but usually you take 8-10k off the listed price, that would be the price you are trading in). But you bought it at about 65k back in 2008. There are still 3 years to go. Say your omv was about 16k, and coe about 12k. With 3 years left to go, your total paper value would be abt 16/17k as of now. If you say wait until 10 yrs, your paper value would be about 8k. Hence if you sell now, you are selling it at 21 - 25k above your paper value.

 

Assuming coe drop by 20k by next week, will your car price drop by 20k too? In my opinion most likely not since if drop by 20k it will be only slightly above your paper value. So it is not a dollar to dollar. I may be wrong though as I am using just depreciation and coe prices to assume.

[mpv_lover]

Depends on how desperate the AD is to close your deal

 

When showrooms are crowded, definitely not easy to nego

 

Also look at the AD margin at prevailing coe price

 

Higher margin easier to nego

 

That's why you have such wide range of opinions here because different people bought different cars at different times

Thanks. You make sense.

 

Can I also ask a bit deeper? if trade in, let's take for example for easy comparison, a 10 years left car which is quite new... then sell low buy low apply. Cos u buy a new car at low coe also in a way affected by low trade in price of existing car.

 

Ten years existing car spread replace by a new ten years spread. So the marketing talk apply.

 

On the other hand, say a existing car that is left with 3 years... when coe low...trade in the lower value is spread in 3 years... u buy new car at same low coe... spread is 10 years. So even if sell low buy low... overall still worthwhile cos of the spread.

 

However the reverse also apply if coe is high.

 

Correct? Or i missed some key considerations?

Edited March 19, 2015 by mpv_lover

[Enye]

Thanks. You make sense.

 

Can I also ask a bit deeper? if trade in, let's take for example for easy comparison, a 10 years left car which is quite new... then sell low buy low apply. Cos u buy a new car at low coe also in a way affected by low trade in price of existing car.

 

Ten years existing car spread replace by a new ten years spread. So the marketing talk apply.

 

On the other hand, say a existing car that is left with 3 years... when coe low...trade in the lower value is spread in 3 years... u buy new car at same low coe... spread is 10 years. So even if sell low buy low... overall still worthwhile cos of the spread.

 

However the reverse also apply if coe is high.

 

Correct? Or i missed some key considerations?

Your question too deep

 

Uncle england no good, read 3 times still no understand

 

Please forgive me

 

😂

[Acemundo]

Hi guys... I'm noob, hoping to seek your advice if the below is pure marketing talk

 

I was told that there is no point to wait for coe to lower since my trade in car will correspondingly lower.

 

buy low sell also low. zero sum game. Does this make any sense? Age of trade in car matters?

 

I recalled some ppl agreed with this. However some have a different view. Confused

 

buy low sell low is generally true in principle (and better applied to houses rather than cars in Singapore) but the mathematics does make a huge difference.

 

a new car at low price is priced low for the next 10 years while your current car you selling off will definitely have less than 10 years of low price to suffer. to make it even clearer, say current new car depn is 12k while your outgoing 8 year old car depn is 7k. say if new car depn 2 years down the road is 9k.

 

if you replace now, your depn over the next 10 years would be higher by 8*(12-9)k+2*(12-7)k = 34k. and we haven't even bring in the higher interest cost into the analysis.

 

the main point is that the old car resale price is not going to make a lot of difference as its life is only 8 years old. even if you get 2k less in depn selling later vs now, you probably only lose 2*2k=4k. vs the 34k extra depn you are going to incur, this 4k isn't going to help you much if you sell earlier.

Edited March 19, 2015 by Acemundo

[Enye]

 

buy low sell low is generally true in principle (and better applied to houses rather than cars in Singapore) but the mathematics does make a huge difference.

 

a new car at low price is priced low for the next 10 years while your current car you selling off will definitely have less than 10 years of low price to suffer. to make it even clearer, say current new car depn is 12k while your outgoing 8 year old car depn is 7k. say if new car depn 2 years down the road is 9k.

 

if you replace now, your depn over the next 10 years would be higher by 8*(12-9)k+2*(12-7)k = 34k. and we haven't even bring in the higher interest cost into the analysis.

 

the main point is that the old car resale price is not going to make a lot of difference as its life is only 8 years old. even if you get 2k less in depn selling later vs now, you probably only lose 2*2k=4k. vs the 34k extra depn you are going to incur, this 4k isn't going to help you much if you sell earlier.

Good analysis but are you expecting a 3k per annum drop in new car dep. that is equal to a 30k drop in coe price

 

How will the economics stack up if the drop in new car dep is reduced by say 1k per annum instead?

[Wt_know]

buy low in 2009 sell high in 2013

huat ah!

Edited March 19, 2015 by Wt_know

[Acemundo]

Good analysis but are you expecting a 3k per annum drop in new car dep. that is equal to a 30k drop in coe price

 

How will the economics stack up if the drop in new car dep is reduced by say 1k per annum instead?

 

hee.....I did well for my economics and statistics subject during college and uni days.

 

just replace the number:

 

8*(12-11)k+2*(11-7)k=16k loss

 

 

vs 2*(1k) = 2k gain

{assume that resale px difference of old car will also be narrower when the coe drops less than scenario 1)

 

still more worthy to wait. whatever it is, when coe is expected to drop, it will most times make it more justifiable to wait for the drop. this assumption will only be wrong if the coe prices shoots up instead of drop or the current resale car owned falls quite radically out from my assumption of it being traded based on market depn. but this is very rare unless ts can find his own buyer who are willing to pay much more than the market depn for his car now than later.

 

 

Edited March 19, 2015 by Acemundo

[mpv_lover]

 

buy low sell low is generally true in principle (and better applied to houses rather than cars in Singapore) but the mathematics does make a huge difference.

 

a new car at low price is priced low for the next 10 years while your current car you selling off will definitely have less than 10 years of low price to suffer. to make it even clearer, say current new car depn is 12k while your outgoing 8 year old car depn is 7k. say if new car depn 2 years down the road is 9k.

 

if you replace now, your depn over the next 10 years would be higher by 8*(12-9)k+2*(12-7)k = 34k. and we haven't even bring in the higher interest cost into the analysis.

 

the main point is that the old car resale price is not going to make a lot of difference as its life is only 8 years old. even if you get 2k less in depn selling later vs now, you probably only lose 2*2k=4k. vs the 34k extra depn you are going to incur, this 4k isn't going to help you much if you sell earlier.

Wow! This is complicated. I need to probably spend 30 mins to understand

 

Maybe let me say the situation I'm in. I'm driving a car left with 3 years. Toyota wish which I heard from the coe bidding thread that the depreciation is higher than a new wish. that is to say good to sell now. I have this concern that if I wait for coe to drop... it's a zero sum game... and if wait till left 1 year cannot even trade in...sorry if I may sound noob here

Edited March 19, 2015 by mpv_lover

[Acemundo]

Wow! This is complicated. I need to probably spend 30 mins to understand

 

Maybe let me say the situation I'm in. I'm driving a car left with 3 years. Toyota wish which I heard from the coe bidding thread that the depreciation is higher than a new wish. that is to say good to sell now. I have this concern that if I wait for coe to drop... it's a zero sum game... and if wait till left 1 year cannot even trade in...sorry if I may sound noob here

don't need to spend 30minutes to understand la....let me try to simulate the calculation to your example

 

but I need to know what is the price you paid for your wish and your wish regn date and omv. to be fair in the illustration, tell me the new depn of your new wish and the resale price your current wish can fetch.

 

but even if u cannot trade in your wish (I highly doubt so), you can use your wish until end of statutory life you still get back your parf rebate.

[Jamesc]

I don't mind selling low

 

but how to buy low?

 

Who is selling cars cheap?

 

[serenade]

7 year old car is worth to you what the scrap value is + (3 x annual depreciation what the market is willing to pay) - dealer's commission. It wont be pretty when you compare new car price with the current high COE. The key word is market.

 

If your car is in very good conditon, drive it to the end then see how the new prices are in 3 years time. Save cash in the meantime to fund next car. Work out the depre from now to scrap based on current value vs value at scrap. Then work out depre if sell now and buy new car.

 

If you want to get most for your Wish, then trade in at an AD who offers generous over trade over current paper value when buy new from them. The bad news is that the AD who offer this are the luxury marques and you will be paying a hefty price.