Pls Help! OMV question

[Patience]

i have been thinking of either getting a PI or AD car.

 

their OMVs are as follows:

 

PI - $14000

AD - $20000

 

Car price:

PI - $60800

AD - $65000

 

I understand that if i sell the car before 5 yrs, i will be able to get back 75% of the omv cost under PARF rebate.

 

But it will also mean that i will automatically lose 25% of my OMV value.

There for, if i were to compare the 2 OMVs, it will mean i will lose more when i sell the AD car.

 

now the qn comes.....since we lose more when we sell a AD car...and also pay more when we buy the car....where will there be savings????

 

why do ppl look for higher OMV car when making a purchase?

 

Thanks for ur help

[Patience]

up...........

[Silver_blade]

I don't think ppl look for just higher OMV...but the overall package eg. how much mark up, etc...

[Bobbysmlim]

ppl choose higher OMV unless the purchase price is the same between seller A and seller B. But usually we won't know the exact OMV till you get the car, unless you are buying a used car. Generally, ADs has more stable OMV, whereas some PIs may underdeclare the OMV so as to pay a lower import tax. Based on the Price and OMV that you'd shown, the depreciation of this car is about the same between the two. The other factor to consider is the COE value, a higher COE will also be better since it will be pro-rated and will be used by buyers to determine 'paper value' of this car when you intend to sell.

For your case, there are more factors to consider before deciding PI or AD :

 

-is this a common car with spare parts easily available? ( i presume the PI will give 1yr warranty only)

-is this PI a reputable one which hopefully will warrant any issues within the warranty period?

-are you getting a loan for this car? ( the AD car will need higher initial outlay as downpayment, and will also incur more interest as the loan amount will be bigger)

 

hope it helps with your decision

 

 

[7007]

i have been thinking of either getting a PI or AD car.

 

their OMVs are as follows:

 

PI - $14000

AD - $20000

 

Car price:

PI - $60800

AD - $65000

 

I understand that if i sell the car before 5 yrs, i will be able to get back 75% of the omv cost under PARF rebate.

 

But it will also mean that i will automatically lose 25% of my OMV value.

There for, if i were to compare the 2 OMVs, it will mean i will lose more when i sell the AD car.

 

now the qn comes.....since we lose more when we sell a AD car...and also pay more when we buy the car....where will there be savings????

 

why do ppl look for higher OMV car when making a purchase?

 

Thanks for ur help

 

Seller's profit margin work in this way:

 

cost = OMV x 2.284 + plus COE

 

PM = selling price less cost.

 

PI PM = 60800 - (14000 X 2.284 = 31976) - 16747 = 12077

AD PM = 65000 - (20000 x 2.284 = 45680) - 16747 = 2573

 

Remember the higher the OMV the higher the paper value...

Remember the higher the PM of seller the higher is your deprecation...

[Patience]

thanks for ur inputs bobbysmlim and 7007