Civic6228 6th Gear January 10, 2013 Share January 10, 2013 I found out the details from my SE and I am really confused if car buyers are actually getting any saving/advantage at all. From my understanding, the rebate is coming off the PARF value for the car. Take for example, VW Mark 7 1.4 Golf With the rebate Launch price = 137k OMV = 22k .... CEVS rebate - 15k In ten years, the scrap value/PARF rebate = 22k-15k = 7k x 50% = 3.5k Depreciation of the car over 10 years = (137 - 3.5) = 133,500/10 = 13,350 per year Without the rebate, Price = 145k (Estimate) OMV = 22k In ten years, the scrapPARD rebate = 22k x 50% = 11k Depreciation of the car over 10 years = (145 - 11) = 134,000/10 = 13,400 per year Looking at the above example, there is no saving/advantage for the car buyers, depreciation remain the same. To me, it is really LPPL. LTA is very good in coming out with idea, giving rebates at no advantage to the car buyers. Am I missing something here ? ↡ Advertisement 1 Link to post Share on other sites More sharing options...
Srt911 Neutral Newbie January 10, 2013 Share January 10, 2013 Ya...I am also puzzled how this CEVS thingy works? For example if the car I want to buy qualify for $15,000 CEVS, does it means dealer will take $15k off the list price? 1 Link to post Share on other sites More sharing options...
Bobztoise 1st Gear January 10, 2013 Share January 10, 2013 (edited) Yes, dealer will take it off the list price And yes, my understanding is that it will also be taken off your PARF so i am unsure where is the benefit to choose a car with high rebate Edited January 10, 2013 by Bobztoise 1 Link to post Share on other sites More sharing options...
Paddie 3rd Gear January 10, 2013 Share January 10, 2013 I found out the details from my SE and I am really confused if car buyers are actually getting any saving/advantage at all. From my understanding, the rebate is coming off the PARF value for the car. Take for example, VW Mark 7 1.4 Golf With the rebate Launch price = 137k OMV = 22k .... CEVS rebate - 15k In ten years, the scrap value/PARF rebate = 22k-15k = 7k x 50% = 3.5k Depreciation of the car over 10 years = (137 - 3.5) = 133,500/10 = 13,350 per year Without the rebate, Price = 145k (Estimate) OMV = 22k In ten years, the scrapPARD rebate = 22k x 50% = 11k Depreciation of the car over 10 years = (145 - 11) = 134,000/10 = 13,400 per year Looking at the above example, there is no saving/advantage for the car buyers, depreciation remain the same. To me, it is really LPPL. LTA is very good in coming out with idea, giving rebates at no advantage to the car buyers. Am I missing something here ? I think your calculation is wrong. If the car price after the 15k rebate is 137k, then the price without the rebate is 137k+15k = 152k. Not 145k. The other thing is that although you calculate straight line depreciation, you did not take into account interest cost. If you buy a car at 152k instead of 137k, the acculumulated interest for the higher loan amount can add up. If you take 80% loan over 7 years, the total interest for a 152k car is (0.8 x 152k) x 2% x 7 = $17,024 For a 137k car, it is (0.8 x 137k) x 2% x 7 = $15,344. So that is a substantial saving too. 1 Link to post Share on other sites More sharing options...
Vega Turbocharged January 10, 2013 Share January 10, 2013 it helps in the initial out front deposite to lower the loan and interest saving. thats about all i can see. Link to post Share on other sites More sharing options...
Civic6228 6th Gear January 10, 2013 Author Share January 10, 2013 I think your calculation is wrong. If the car price after the 15k rebate is 137k, then the price without the rebate is 137k+15k = 152k. Not 145k. The other thing is that although you calculate straight line depreciation, you did not take into account interest cost. If you buy a car at 152k instead of 137k, the acculumulated interest for the higher loan amount can add up. If you take 80% loan over 7 years, the total interest for a 152k car is (0.8 x 152k) x 2% x 7 = $17,024 For a 137k car, it is (0.8 x 137k) x 2% x 7 = $15,344. So that is a substantial saving too. Please lah, noone would really know what is the listed price without the rebates now ... I indicated as estimate I agree with the interest saving ... but I disagree with your calculation... the difference of the interest is based on the rebate amount not the full amount of the car. Taking maximun rebate of 20k, interest = 20k x 2% x 7 years = S$ 2800 .... substantial ? and if we divide over seven years ... $400 per year ... $33 per month 1 Link to post Share on other sites More sharing options...
Deckbuild 6th Gear January 10, 2013 Share January 10, 2013 Initially can still be bothered to calculate the savings, after the 1st bid with the CEVS in effect, I think with CEVS or not doesn't matter anymore. Take golf for example again, launch price 137k, after yesterdays bidding, it's over 147k now. The rebate is like 5k now... whatever rebated all goes back to COE... Link to post Share on other sites More sharing options...
Rayoflight 5th Gear January 10, 2013 Share January 10, 2013 It is something like OPC mah..isnt it..deduct the value from PARF Link to post Share on other sites More sharing options...
Deckbuild 6th Gear January 10, 2013 Share January 10, 2013 It is something like OPC mah..isnt it..deduct the value from PARF OPC is deducted from COE if not wrong... Link to post Share on other sites More sharing options...
Turbonetics 2nd Gear January 10, 2013 Share January 10, 2013 I think your calculation is wrong. If the car price after the 15k rebate is 137k, then the price without the rebate is 137k+15k = 152k. Not 145k. The other thing is that although you calculate straight line depreciation, you did not take into account interest cost. If you buy a car at 152k instead of 137k, the acculumulated interest for the higher loan amount can add up. If you take 80% loan over 7 years, the total interest for a 152k car is (0.8 x 152k) x 2% x 7 = $17,024 For a 137k car, it is (0.8 x 137k) x 2% x 7 = $15,344. So that is a substantial saving too. the general guide to calculate a car depreciation is base on the selling price. because not everybody will be taking loan and everybody's loan amount is not the same. this will accurately determine a car's depreciation. if you calculate depreciation with interest included,then it is more for personal reference or personal financial planning. not ideal for car vs car comparison. Link to post Share on other sites More sharing options...
Turbonetics 2nd Gear January 10, 2013 Share January 10, 2013 I found out the details from my SE and I am really confused if car buyers are actually getting any saving/advantage at all. From my understanding, the rebate is coming off the PARF value for the car. Take for example, VW Mark 7 1.4 Golf With the rebate Launch price = 137k OMV = 22k .... CEVS rebate - 15k In ten years, the scrap value/PARF rebate = 22k-15k = 7k x 50% = 3.5k Depreciation of the car over 10 years = (137 - 3.5) = 133,500/10 = 13,350 per year Without the rebate, Price = 145k (Estimate) OMV = 22k In ten years, the scrapPARD rebate = 22k x 50% = 11k Depreciation of the car over 10 years = (145 - 11) = 134,000/10 = 13,400 per year Looking at the above example, there is no saving/advantage for the car buyers, depreciation remain the same. To me, it is really LPPL. LTA is very good in coming out with idea, giving rebates at no advantage to the car buyers. Am I missing something here ? if your figures and calculations are all correct,then i guess these are just marketing gimmicks from Volkswagen. the savings is so little and yet the advertisement "talk until like really 5 figures savings". i guess it will attract those who wants to own Volkswagen at a lower monthy installment. Link to post Share on other sites More sharing options...
Civic6228 6th Gear January 10, 2013 Author Share January 10, 2013 (edited) if your figures and calculations are all correct,then i guess these are just marketing gimmicks from Volkswagen. the savings is so little and yet the advertisement "talk until like really 5 figures savings". i guess it will attract those who wants to own Volkswagen at a lower monthy installment. That is precisely my point ..... really LPPL and there is no/little saving/advantage to the car buyers ... I was surprised when my SE explain the details to me about the rebate. I am wondering how many people bought the new car thinking that they have a "great deal" with the CEVS rebates. Edited January 10, 2013 by Civic6228 Link to post Share on other sites More sharing options...
Chevycavy 1st Gear January 10, 2013 Share January 10, 2013 (edited) Initially can still be bothered to calculate the savings, after the 1st bid with the CEVS in effect, I think with CEVS or not doesn't matter anymore. Take golf for example again, launch price 137k, after yesterdays bidding, it's over 147k now. The rebate is like 5k now... whatever rebated all goes back to COE... Isn't CEVS introduced to encourage ppl to choose and buy greener cars? Comparing car price inclusive of COE over different COE bidding exercises is incorrect as everybody knows the overall price fluctuates depending on COE price. Whether the CEVS has an effect on COE bids does not really matter as a similar car without CEVS will still be more expensive. A CEVS rebate of say 15k is still 15k regardless of COE price. If dealers choose to jack up prices that's another matter... Edit: Any merits of the CEVS introduction will only be known if LTA provides stats on how new buyers choose cars with less carbon emission over another. Meaning we start seeing more greener cars on the road... Edited January 10, 2013 by Chevycavy 1 Link to post Share on other sites More sharing options...
inlinesix Supersonic January 10, 2013 Share January 10, 2013 Since you gonna pay so much for COE, what's the point of doing all the calculation? Link to post Share on other sites More sharing options...
Deckbuild 6th Gear January 10, 2013 Share January 10, 2013 That is precisely my point ..... really LPPL and there is no/little saving/advantage to the car buyers ... I was surprised when my SE explain the details to me about the rebate. I am wondering how many people bought the new car thinking that they have a "great deal" with the CEVS rebates. They sold over 100 new golf over the last 3 weeks as per straitstimes. Link to post Share on other sites More sharing options...
Vextan 1st Gear January 10, 2013 Share January 10, 2013 So the savings\rebate is actually offset from the omv ? if so then there is no real savings at all, as you pay less but end up getting back less also. what a farse ! 1 Link to post Share on other sites More sharing options...
Kar_lover Supercharged January 10, 2013 Share January 10, 2013 I found out the details from my SE and I am really confused if car buyers are actually getting any saving/advantage at all. From my understanding, the rebate is coming off the PARF value for the car. Take for example, VW Mark 7 1.4 Golf With the rebate Launch price = 137k OMV = 22k .... CEVS rebate - 15k In ten years, the scrap value/PARF rebate = 22k-15k = 7k x 50% = 3.5k Depreciation of the car over 10 years = (137 - 3.5) = 133,500/10 = 13,350 per year Without the rebate, Price = 145k (Estimate) OMV = 22k In ten years, the scrapPARD rebate = 22k x 50% = 11k Depreciation of the car over 10 years = (145 - 11) = 134,000/10 = 13,400 per year Looking at the above example, there is no saving/advantage for the car buyers, depreciation remain the same. To me, it is really LPPL. LTA is very good in coming out with idea, giving rebates at no advantage to the car buyers. Am I missing something here ? OMV 22k Tax and ARF (120%) 26K (approx) Total 48k Less CEVS 15k = 33k PARF should remain as 55% of OMV = $12k. Depreciation = (137k - 12k)/10 = $12.5k/year. As you can see it doesn't make much difference from your calculation where scrap value is $3.5k. Isn't time an amazing thing? :) For your without rebate calculation, your price should be 152k not 145k. The whole of the 15k is deducted from the selling price. 1 Link to post Share on other sites More sharing options...
Deckbuild 6th Gear January 10, 2013 Share January 10, 2013 Isn't CEVS introduced to encourage ppl to choose and buy greener cars? Comparing car price inclusive of COE over different COE bidding exercises is incorrect as everybody knows the overall price fluctuates depending on COE price. Whether the CEVS has an effect on COE bids does not really matter as a similar car without CEVS will still be more expensive. A CEVS rebate of say 15k is still 15k regardless of COE price. If dealers choose to jack up prices that's another matter... Edit: Any merits of the CEVS introduction will only be known if LTA provides stats on how new buyers choose cars with less carbon emission over another. Meaning we start seeing more greener cars on the road... Yes, CEVS is to encourange users to go towards greener cars, but because lots of cars which are already under the CEVS band only receive their rebate this year which means COE are being pushed up again due to the rebate. It's an example of left pocket to right pocket, and worst, those car that doesn't fall under the CEVS band have their prices pushed even further north. If govt really wanna encourage green, they should use other methods such as road tax rebate etc. ↡ Advertisement Link to post Share on other sites More sharing options...
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