Question on OPC rebate

[Ehchang8]

if i buy a new OPC car, i have $17000 deducted from car price. but if i buy a new normal car, and convert it to OPC, there is a rebate of $1100 every 6 months. this will amount to $22000 for 10 years.

why is this rebate amount more than $17000 ? did i miss out something ? can someone please enlighten me ?

[Mix123]

http://www.lta.gov.sg/motoring_matters/mot...mes_offpeak.htm

 

*Amount cap at $17k

[Sporadic]

The diff is because the 17k is an upfront savings, whereas the 22k is not. It is probably thus to account for things like inflation/time value of money/opp cost etc.

 

 

Contrary to what the second poster is saying, the cap is NOT 17k. It is 22 k (terms and conditions applying, of course).

[Tjkbeluga]

You're forgetting the yearly reduction of road tax for the OPC car too. It's another 800 reduction a year, with a minimum payment of 50 bucks. So it's actually more than 17K.

[Majordan]

buy normal plate and convert to red plate = give LTA interest free loan of $17,000 for 10 years

 

 

[Sporadic]

It's true. 2.5 years ago, I bought a 6.5 year old second-hand non-OPC car for $20,800, then converted it into an OPC. When I scrap the car next year, I'll get back $7700 (for 3.5 years as an OPC) plus $12,300 (PARF) = $20,000.

 

Not bad, huh? $800 depreciation over 3.5 years!

 

 

 

[Maroon5]

It's true. 2.5 years ago, I bought a 6.5 year old second-hand non-OPC car for $20,800, then converted it into an OPC. When I scrap the car next year, I'll get back $7700 (for 3.5 years as an OPC) plus $12,300 (PARF) = $20,000.

 

Not bad, huh? $800 depreciation over 3.5 years!

 

wah dan eh...power sia! you

[Tazzi80]

If normal car convert to OPC - [(17000 / 10) + 500] / 2 = $1100 (every 6 mths)

If OPC direct - 1 time $17000 off + $500 tax rebate every year

 

Basically if you convert you are just wasting interest on the $17000 you might save earlier.

 

 

[Ehchang8]

convert to OPC, you are also paying less road tax. so road tax should not be in the formula.

interest for the 17k, yes maybe. but the rate is higher than the market rate. 5k/17k/10yrs=2.94% flat rate. or maybe not, because only get payment every 6 months instead of every month..

[Wahlin]

If normal car convert to OPC - [(17000 / 10) + 500] / 2 = $1100 (every 6 mths)

If OPC direct - 1 time $17000 off + $500 tax rebate every year

 

Basically if you convert you are just wasting interest on the $17000 you might save earlier.

 

Your formula seem to be incorrect. Road tax rebate applied to all OPC regardless of whether direct OPC or converted OPC.

 

So in total :

convert to OPC get $22000 after 10 years

OPC direct get $17000 day 1

 

I don't think you will loss out on interest. Car loan interest for $17000, 10 years work out to be $3740 (based on 2.2% X 10 years). The additional $5000 is more than enough to covert the so call losses in interest. And don't forget, you get bank interest for the $5K as well of course not for 10 years.

 

Anyway bank might not allow car owner to convert from normal to OPC if his/her outstanding loan is not fully paid.

Edited July 8, 2010 by Wahlin

[Nf0rc3r]

Its "UP TO" 2.2k per month. That is in case u convert 1 day after u renew road tax. The first month rebate is 2.2k includes the $500 road tax rebate. The rest 1.7k.

[Nf0rc3r]

Your formula seem to be incorrect. Road tax rebate applied to all OPC regardless of whether direct OPC or converted OPC.

 

So in total :

convert to OPC get $22000 after 10 years

OPC direct get $17000 day 1

 

I don't think you will loss out on interest. Car loan interest for $17000, 10 years work out to be $3740 (based on 2.2% X 10 years). The additional $5000 is more than enough to covert the so call losses in interest. And don't forget, you get bank interest for the $5K as well of course not for 10 years.

 

Anyway bank might not allow car owner to convert from normal to OPC if his/her outstanding loan is not fully paid.

 

PVOM =x

[Scoots]

Your formula seem to be incorrect. Road tax rebate applied to all OPC regardless of whether direct OPC or converted OPC.

 

So in total :

convert to OPC get $22000 after 10 years

OPC direct get $17000 day 1

 

I don't think you will loss out on interest. Car loan interest for $17000, 10 years work out to be $3740 (based on 2.2% X 10 years). The additional $5000 is more than enough to covert the so call losses in interest. And don't forget, you get bank interest for the $5K as well of course not for 10 years.

 

Anyway bank might not allow car owner to convert from normal to OPC if his/her outstanding loan is not fully paid.

 

Don't forget. The (max) 22K is the final amount after 20 6month periods. The 17K rebate is from Day1. Factor in inflation, that final, max 22K at eh end of 10yrs is not the same as 22K today

[Wahlin]

Its "UP TO" 2.2k per month. That is in case u convert 1 day after u renew road tax. The first month rebate is 2.2k includes the $500 road tax rebate. The rest 1.7k.

 

Where u get the info from ?

[Ehchang8]

Its "UP TO" 2.2k per month. That is in case u convert 1 day after u renew road tax. The first month rebate is 2.2k includes the $500 road tax rebate. The rest 1.7k.

road tax rebate they refund you at once, opc rebate has to wait. don't think they lump this together.

[Cyric]

Anyway bank might not allow car owner to convert from normal to OPC if his/her outstanding loan is not fully paid.

 

Is it necessary to refinance car loan when converting from normal to revised OPC scheme? My friends and I enquire our respective banks and they insist that it is necessary to refinance the car loan since the "terms and conditions" for OPC car are different. I thought the loan should not matter since I am still paying the required monthly installments. I just need to pay them back whatever outstanding amount I own them if I sell my car.

 

Btw, LTA doesnt need any approval from banks for conversion. So can I still go ahead with the conversion and ignore the bank? Can anybody advise....

[Unfair]

Is it necessary to refinance car loan when converting from normal to revised OPC scheme? My friends and I enquire our respective banks and they insist that it is necessary to refinance the car loan since the "terms and conditions" for OPC car are different. I thought the loan should not matter since I am still paying the required monthly installments. I just need to pay them back whatever outstanding amount I own them if I sell my car.

 

Btw, LTA doesnt need any approval from banks for conversion. So can I still go ahead with the conversion and ignore the bank? Can anybody advise....

 

You do understand that u are hiring the car from the purchaser(Bank) right ?

If the bank wanna play with you, they can also just recall their loan to you with immediate effect. See where you gonna find $$$ to pay back loan

[Cyric]

You do understand that u are hiring the car from the purchaser(Bank) right ?

If the bank wanna play with you, they can also just recall their loan to you with immediate effect. See where you gonna find $$$ to pay back loan

 

If such a situation arises, I guess the only alternative is to sell off the car and pay off the outstanding loan amount and interest then.

 

Anyway, does this imply that for conversion from normal to revised opc scheme, it is necessary to either refinance or pay off the outstanding loan balance to the bank?