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ferrytales

Why you should NEVER do $0 driveaway or 10 years loan

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3rd Gear

I don't understand here it doesn't matter whether the car is on 10 years loan, over -trade, whatever second hand price of the car is based on the market situation and what kind of brand.

The only makes difference is how much top up when selling the car before 10 years up, either the lost paid upfrond when the DP is bigger or paid more when there deficit when on low down payment loan. 

Based my experience people always telling brand secondhand market value is not important, this is true if holding the card until COE end. On other end selling car before COE end brand of the car/model popularity is big influence. 

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Supersonic
22 minutes ago, 13177 said:

Indeed true not to buy a car with $0 downpayment with a 10 year loan. This means the person not really can afford to own a car.

I have a friend last time who bought a car with $0 downpayment with a 10 year loan, along the way he cannot even afford to pay for the car insurance and ended up sold off the car with a huge loss.

Last time my aunt bought honda fit $0 driveaway if i remember correctly and after driving 4-5 yrs sell the car and earn cash lol. Depre also only lose like 10k. Thanks to coe rise

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5th Gear
8 minutes ago, Knighthunter said:

I don't understand here it doesn't matter whether the car is on 10 years loan, over -trade, whatever second hand price of the car is based on the market situation and what kind of brand.

The only makes difference is how much top up when selling the car before 10 years up, either the lost paid upfrond when the DP is bigger or paid more when there deficit when on low down payment loan. 

Based my experience people always telling brand secondhand market value is not important, this is true if holding the card until COE end. On other end selling car before COE end brand of the car/model popularity is big influence. 

I can't brain your queen's english

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Moderator

I just have this to say

4FC16053-A789-4766-83F7-E4C539079591.gif

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Moderator
32 minutes ago, thebutcher said:

I can't brain your queen's english

Ya man

294BB1CA-8345-4817-90FC-4940E75570BC.jpeg

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Twincharged (edited)
1 hour ago, Knighthunter said:

I don't understand here it doesn't matter whether the car is on 10 years loan, over -trade, whatever second hand price of the car is based on the market situation and what kind of brand.

The only makes difference is how much top up when selling the car before 10 years up, either the lost paid upfrond when the DP is bigger or paid more when there deficit when on low down payment loan. 

Based my experience people always telling brand secondhand market value is not important, this is true if holding the card until COE end. On other end selling car before COE end brand of the car/model popularity is big influence. 

Don't fully agree with you.

For benefit of all, including me, this is what I think you are saying.  I will bold what I think you mean.  

First paragraph

When you sell off the car, the selling price is based on brand and market conditions.  Assume linear depreciation.

A car that cost $100k can be sold for $50k at 5 year mark.  But there is a condition.  A $100000 manual accent might only find a buyer at the 5 year mark for $30k while a 5 year old honda city might fetch $50k.  But if COE jumps to $200k, both cars can be sold for $100k at least.

Second paragraph

You will lose money, if COE doesnt spike etc when you sell the car before 10 years.  The only difference is you either lose it up front through the down payment or you lose it because $0 down payment means you cannot break even at all.

Third paragraph is more a summary of the first two paragraphs.

Edit.  So I think his point is dont think $0 driveway is lose money.  Either it is lost up front or later.  All will lose money anyway unless you hold a car till ten years or you are lucky to buy at low COE and sell at high COE or you get a model of car that is in really great demand at point of selling.

Edited by Philipkee
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6th Gear

There must surely be a loophole where they are giving what amounts to a biz loan but quoting the car loan "interest rate" which is not at all close to the APR. I think only car loans specifically is allowed to advertise as "3%" but actually more like 5-6% APR. So these kind of "3%" but isn't actually car loan (that must be restricted to 30/40% downpayment) should be violating the law?

MAS should look into that

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Twincharged
1 minute ago, yishunite said:

There must surely be a loophole where they are giving what amounts to a biz loan but quoting the car loan "interest rate" which is not at all close to the APR. I think only car loans specifically is allowed to advertise as "3%" but actually more like 5-6% APR. So these kind of "3%" but isn't actually car loan (that must be restricted to 30/40% downpayment) should be violating the law?

MAS should look into that

I think this 30%/40% downpayment is when you want to take a loan from the bank.  But in house loan you are taking a loan from the company instead.  It's like a personal loan from the company to the buyer.  I think that is the loophole.

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Turbocharged
4 hours ago, Ct3833 said:

The example raised by TS is more than good enough to warn those who are unaware of the pitfalls of taking a $0 drive away plan. 

But many still want to buy cars they desire with high loans and minimal down payment. let people do what they want. All adults. 

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Moderator
10 minutes ago, Mkl22 said:

But many still want to buy cars they desire with high loans and minimal down payment. let people do what they want. All adults. 

And can see quite a no of idealistic ppl too... high coe.. high selling bla bla 

wonder which well sgp has? That keeps these

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Supersonic
1 hour ago, Philipkee said:

Don't fully agree with you.

For benefit of all, including me, this is what I think you are saying.  I will bold what I think you mean.  

First paragraph

When you sell off the car, the selling price is based on brand and market conditions.  Assume linear depreciation.

A car that cost $100k can be sold for $50k at 5 year mark.  But there is a condition.  A $100000 manual accent might only find a buyer at the 5 year mark for $30k while a 5 year old honda city might fetch $50k.  But if COE jumps to $200k, both cars can be sold for $100k at least.

Second paragraph

You will lose money, if COE doesnt spike etc when you sell the car before 10 years.  The only difference is you either lose it up front through the down payment or you lose it because $0 down payment means you cannot break even at all.

Third paragraph is more a summary of the first two paragraphs.

Edit.  So I think his point is dont think $0 driveway is lose money.  Either it is lost up front or later.  All will lose money anyway unless you hold a car till ten years or you are lucky to buy at low COE and sell at high COE or you get a model of car that is in really great demand at point of selling.

Still lose more money from $0 driveaway

 

u pay more loan. If u take 60% loan ur loan interest at most 10-15k. When u sell u pay less penalty from rule 78. 
 

 

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Turbocharged
4 hours ago, Hamburger said:

Saying is easy but to be prudent really takes discipline. 

 

I love the gen 4 sorento and I could afford it by taking up a 50k loan. 

But decided to just buy a few years old gen 3/ with AD warranty with cash and be debt free. 

That feeling outweighs the thrill of driving a new car for me. 

But that's just me and not for anyone. 

If I were you, I would have taken the new gen Sorento with 50k loan. Let me try to convince you that it is worth it.

With most AD giving 2% interest term for new cars, lets say for 5 years loan, it means interest of 0.02x50kx5=5k over 5 years.

That means the new car will cost you 55k extra in all.

If you buy the few year old gen 3 Sorento, 100k can get you a 3.5 year old Sorento base on sgcarmart listings.

With a average dep of 12k/yr, it means you will fork out additional 55k-(12kx3.5)=13k considering your new car come with a 10 year COE cert while the gen3 left only 7 years.

So, the golden question is whether it is worth to spend 13k to get a brand new gen 4 Sorento with brand new design and safety features.

My opinion is YES I will definitely spend the money as the new car is so much better than the older one. Even if you let the 2nd hand agent take additional 10k as profit for taking in the gen 3 Sorento, 23k is still very enticing proposition to consider. And with some persuasion, more realistic to put it at 20k. It will be even lower considering the 1/2 or 1 yr road tax and the bundled free servicings haha. 

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Turbocharged
5 hours ago, Zxcvb said:

Anyone with a PSLE cert will know NOT to take up this loan. Why would anyone buy something that's 30% mark up is beyond me. I'd pay upfront FULL CASH if there's 30% discount. Any SE wants to PM me?? 😌

Really meh ..? Base on one motoring the margins are equally high from the looks of it but people still buy .. 

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Hypersonic

So take 7 year loan and put down 30% 

buy car won't lose money?

:a-happy:

Really.

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Supersonic (edited)

For car buyers who know what TS is talking about means they are already season car buyers. There are still plenty of ppl who dont have a clue simply because car buying in sgp is alot more complicated than anyone can expect. You wont see it so ridiculous anywhere else on Earth.

Most will give up and just tell the car salesman,"I can do installment $XXX/mth", full stop. And the salesman go work out the sums for them and get the papers ready for them to sign on the dotted line. He will use whatever schemes available and get it to work. And when the fellow sudden dont have cash to fund the installment he will want to sell the car and suddenly find himself/herself in more debt. Totally no clue as to what sh!t he's into the first place.

Sad to say a lot of noob car buyers out there also have zero financial awareness. That is also why each year got so many ppl declare bankrupt at a young age.

Many ppl make the mistake of just looking at the price tag when in fact when they take loan the they are actually paying a lot more than just the indicated price tag. Then they also dont know "the price of rice when they eat it". Things like price for petrol, parking and ERP.  When it hit them they totally cannot afford to have a car it's simply too late.

Edited by Watwheels
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Hypersonic

Selling car depends on brand?

This is what I tell all my customers.

Korean cars no value I can buy $1k above scrap value only.

You can @Philipkee how much he got selling his Accent.

Japanese cars I have so many, see my lot full of Civics and Altis how to sell high price.

Conti car so many customers worry about cost of repair I also cannot sell high high price how to buy at high high price?

I buy at slighly above scrap value only.

:grin:

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4th Gear
15 minutes ago, Watwheels said:

For car buyers who know what TS is talking about means they are already season car buyers. There are still plenty of ppl who dont have a clue simply because car buying in sgp is alot more complicated than anyone can expect. You wont see it so ridiculous anywhere else on Earth.

Most will give up and just tell the car salesman,"I can do installment $XXX/mth", full stop. And the salesman go work out the sums for them and get the papers ready for them to sign on the dotted line. He will use whatever schemes available and get it to work. And when the fellow sudden dont have cash to fund the installment he will want to sell the car and suddenly find himself/herself in more debt. Totally no clue as to what sh!t he's into the first place.

Sad to say a lot of noob car buyers out there also have zero financial awareness. That is also why each year got so many ppl declare bankrupt at a young age.

Many ppl make the mistake of just looking at the price tag when in fact when they take loan the they are actually paying a lot more than just the indicated price tag. Then they also dont know "the price of rice when they eat it". Things like price for petrol, parking and ERP.  When it hit them they totally cannot afford to have a car it's simply too late.

thank you for summarizing my point!

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4th Gear (edited)
16 minutes ago, Jamesc said:

Selling car depends on brand?

This is what I tell all my customers.

Korean cars no value I can buy $1k above scrap value only.

You can @Philipkee how much he got selling his Accent.

Japanese cars I have so many, see my lot full of Civics and Altis how to sell high price.

Conti car so many customers worry about cost of repair I also cannot sell high high price how to buy at high high price?

I buy at slighly above scrap value only.

:grin:

thats why i used the $6.5k depre + 5k token sum from dealer + parf of $2.5k as a calculation but in actual fact, its even lower. 

Edited by ferrytales
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