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20% depreciation in first year? true?


Ahseng
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That is why instead of letting the dealer chop carrot on me every 3 to 4 years, I am going to extend it to 10years! [laugh]

 

Then government say, don't even let dealer chop you every 10 year, just take BMW (bus mrt walk). [laugh] [laugh] [laugh]

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Its common sense lah bro... unless your car is having extremely high OMV value, with current COE rate, most car is having close to 7 to 8%% depreciation annually even on the 9th yr.. So, what is there to suprise to have 20% dep on the 1st year?? In fact, if you sell of your car on the 1st year. prepare to lost min 25%. Otherwise, who would want to buy a 2nd hand car if the annual depreciation is only slightly lower than new car?

 

Of course, there are extreme cases where some car owners "earn" money when selling off their car, good example would be those who bought their car in 2009 and sell off after 2012... Their annual depreciation is extremely low... some even made a small sum of money from it. But thats 1 off example.... If car/ COE price remain stable. Expect very high annual depreciation if you sell your car off before 3 yrs usage...

 

yea but when selling they not using this common sense. i'm hunting ard for a 2008 stream. The car was selling $77000 in 2008 brand new.

 

They're selling the same car today at 60+....where's the depreciation? :ph34r:

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(edited)

new car, $210K, straight line depreciation for 10 years = $21K / year

3 years old used car, $160K, straight line depreciation for 7 years = $22.8K / year >> assuming the car could be bought at $140k-ish but used car dealer making $20K+- profit

 

both car omv is almost the same, which mean by year 10th will get back 50% of omv and $0 coe.

 

so, buy old or new?

 

new car, 3 years warranty, $0 for repair, new car + new smell = priceless

old car, warranty over, expect to spend $$$ for repair and wear and tear

 

all in all, buying used car is actually worst off than buying new car?

in order for the used car to be money sense compare to new car, it should be priced at $130K-$140K (above scenario) factoring out of warranty, and most importantly wear and tear start to be replaced with 7 years left?

but that's impossible, isn't it

Edited by Wt_know
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(edited)

based on my analysis, i understand why many car owner die die must buy new car

that's because the depreciation is either similar to used car and in many cases it is actually cheaper factoring that it's new car, $0 repair for 3 years, new car = premium

 

the problem with 3/5 years old car is not worth it especially >5 years old car.

only got <5 years to drive and all things being equal, it's a no brainer that no one will renew the coe with $75K for a 10 years old car

 

so those who can afford the downpayment that now used car also require 40/50% ... it's a no brainer many will buy new car

hence, coe price will sustain ... huat ah !!!

 

don't event think that the 1st car owner will take all the heat for depreciation for 1-3 years and you can drive cheaply for the next 7 years

if a car is sold 3 times ... that's even worse because the car is already squeezed 3 times from dealer for profit

Edited by Wt_know
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yea but when selling they not using this common sense. i'm hunting ard for a 2008 stream. The car was selling $77000 in 2008 brand new.

 

They're selling the same car today at 60+....where's the depreciation? :ph34r:

 

 

thats whay i said, there are exceptional cases where those owner who bought the car during low COE era may even earn money by selling their car. the example I quoted: bought in 2009 and sell after 2012....

 

In fact, for my case, I bought my vios is 2006 @ 46K, if I were to sell it off now, I can easily fetch 20K. The depreciation is so low that I conside myself earn from the car compare to taking cab daily..

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Neutral Newbie

for me i made when i sold the porsche....$15k....cos of the creeping COE. Good dah, drive for free n make profit summore

 

oni in sg [laugh] [laugh]

 

Yo... How it is going? Been a long time since we met.

 

So what u got after the cayman?

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Turbocharged

its expected in this phase of growth where population increases rapidly. demand exceeds supply and no cooling measures can correct as long as more and more people step onto this small dot and few leaves.

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Hi guys, heard from an old friend that says new car once on the road already -20% liao. So i take it that he meant 20% depreciation in the first year.

 

Maybe is this why people always say the first 2 to 3 years the first owner bears the brunt of the steep depreciation?

 

Is this assumption near reality?

1st yr : 20% depreciation

 

2nd year: 10% dep

 

3rd year : 10% dep

 

rest of the 7 years divide equally the remaining value.

 

Actually not very true. 10-15% in 1st yr is more accurate. The 20% is just the used car dealers anyhow whack one to scare you into selling your car to them at bleddy low prices.

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Hmm so it means that whatever way we comeup with to findafair value it will not work because dealers peg the value to new coe prices (godamn high). Like that hard to bargain the price down.

 

 

Dealers always on winning side.

 

COE up ty raise resale prices. COE down ty hold prices. Mention yearly depreciation bases on higher COE.

 

Thats why if u got experience wh them.....u must know their tricks. Heads ty win....tails we lose.

 

Always know the market n bargain hard fr a good price.

 

Last time got $50 COE car advertised in papers... I call n check price. WTF almost same price as a $40k coe. Dealer say car price based on market price. I tell him but scrap value is much lower. He say like that u dun buy lah. [speechless][speechless]

 

Ty always looking fr pple who dun know the market n prices. Then ty whack. [knife][whip]

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yeah, it's all depends on coe aka new car price

 

ie: new car price = $200K, if new car price drop to $170K or move up to $230K ... x/y/z also move in tandem

1yr old car = $x

2yr old car = $y

3yr old car = $z

 

owner with low coe will not sell/trade-in their car cheaply if new car price is sky high

owner with high coe is not able to sell their car because of low new car price will either cut loss or die die continue to drive the car

 

uniquely singapore. in the rest of the world, budget constraint go for used car.

in singapore, go for used car but the price is pegged with "current coe" aka the new car price

 

 

 

Thats why I always see the same cycle happening.

 

When COE drops low low....u can see many pple wil scrap their cars to get back their scrap value n its sometimes enough to buy a newer car even. But ty still lose on depreciation.

 

Those who hold on to a high COE car wil die a slow n painful death.

 

Thats why I wil never buy a car when COE is very high. Once COE drops (and it wil) u wil lose a lot of $$$$.

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(edited)

Not true. Depends on brand and make plus discount you can get.

 

I bought a new car at 228k. After 6 months, a dealer wanted to take it in for 226k. No significant change in coe price in that period.

 

 

This case is an exception to the rule.

 

Mostly u wud b lucky to get $190K.

 

What car was it n what year u bought?

Edited by Pisces69
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you just need to ask yourself back this question

 

if a brand new car is S$100,000

 

how much would you pay for a 1 yr old car of the exact same specifications?

 

dont forget the COE is annual depreciation of $6000-8000 already.

 

would you pay $95k if you could buy a brand new one for $100k? no way, as the COE rundown more than that

 

what about $90k? COE lost 6-8k, savings of 2k - 4k for a 1 yr old car - is it worth it? better buy new car

 

so realistically after taking out the COE loss of 6-8k, you need to give the next buyer at least $8k to $10k for him to consider NOT buying new

 

that gives you about a 20% loss

 

note that for high end cars, a $10k savings will be spit on by Atas buyers looking at a $300k new car. thats why a 20% guide is used

 

 

Yes quite logical n realistic. [scholar]

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Haizz...means cannot use this way to bargain lor.

 

e.g. a june 2008 honda stream $77,000 (with coe $14,689)

 

year 1 less 20% depreciation = 61,600

year 2 less 10% depreciation = 55,440

year 3 less 10% depreciation = 49,896

[divide 49896 by 7 to get dep for rest of lifetime per year] = $7128/year

.

.

year 5 value would be = 49896 - 7128 - 7128 = $35,640

 

but selling price on sgcarmart a 2008 stream easily 60k+.

 

Does this mean the dealer is earning 30k for a stream? and by pricing it at 60k....wa lau where's the depreciation for the past 5 years?

 

 

Dealer can try to sell it as long as the COE remains high. Once it drops to basement level....then dealer wil b desperate to offload asap.

 

Many dealers go bankrupt when COE drops very low cos all e cars ty holding cannot sell n only those that can b re-exported fr scrap value ty can recover costs.

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the more times the car being sold ... the more profit is taken from the car

 

dealer sell new ... earn $20K-ish (min $30k-ish for conti)

 

used dealer resell ... earn $10K-ish (min)

 

subsequent resell ... another $10k-ish

 

so here already $40K-ish goes to dealer ... 1st, 2nd and 3rd buyer also need to bear the cost lor

 

 

Thats why I just cant believe a dealer can make so much from one sale.

 

When I calculate e price of a 2nd hand car n dealer quotes me something much higher.....I wil tell him to fly kite.

 

Sometimes I just call n tell them "This is my price. Can tok or not". If ty say can....then I wil seriously consider that car. Otherwise I just keep looking around till I find a dealer who is more reasonable ..................or desperate. Hahaha. [laugh]

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yea but when selling they not using this common sense. i'm hunting ard for a 2008 stream. The car was selling $77000 in 2008 brand new.

 

They're selling the same car today at 60+....where's the depreciation? :ph34r:

 

 

Thats Spore. Unique again.

 

U never kenna those ang mo come here wan to buy car. U tell the price ty think either u r mad or u trying to cheat them [knife] .

 

Most confusing to them is how can a 9 year old car b cheaper than a 11 year old (COE renewed) car. [laugh]

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(edited)

i conclude, car depreciation is not based on the car value when it was sold ...

ie: the new car was sold at $200K and after 3 years the car may still command a market value at $200K or $180K or nose dive to below $150K

 

depreciation is benchmark with new car price which again direct link to coe

it is lame to say that inflation (price goes up) does not affect you if you don't buy new car ... can buy used car where the coe is already locked down

 

used car price direct link to new car price direct link to coe ...

Edited by Wt_know
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Dealers always on winning side.

 

COE up ty raise resale prices. COE down ty hold prices. Mention yearly depreciation bases on higher COE.

 

Thats why if u got experience wh them.....u must know their tricks. Heads ty win....tails we lose.

 

Always know the market n bargain hard fr a good price.

 

Last time got $50 COE car advertised in papers... I call n check price. WTF almost same price as a $40k coe. Dealer say car price based on market price. I tell him but scrap value is much lower. He say like that u dun buy lah. [speechless][speechless]

 

Ty always looking fr pple who dun know the market n prices. Then ty whack. [knife][whip]

 

Yup, they make money when they buy and when they sell. Almost no situation will they allow themselves to lose one la, coz they're running a biz.

 

Just have to know the price and what we're willing to pay, if they don't want, then don't buy. Unless whole market only they have that car..

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