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

[shrjun]

53 minutes ago, Zxcvb said:

Other people can’t see your bank account, but they surely can see the car you drive and the watch you’re wearing. 

Who are these people 😒

[Hamburger]

Cant speak for others, but having owned a few German and other conti marques,  brand or prestique means little to me now. 

I only look at cars that offer bang for bucks. That's what matters imo. 

[ferrytales]

with rising COE and desire to own a car, guess its about time to revive this thread to keep ppl informed!

[CarGuy88]

Out of curiosity, roughly how many % of buyers take loans to buy their cars? Maybe those in the industry can give an anecdotal estimate.

[Civicblade]

7 hours ago, CarGuy88 said:

Out of curiosity, roughly how many % of buyers take loans to buy their cars? Maybe those in the industry can give an anecdotal estimate.

You may want to write in to Singstat to request that they put this information in their annual report. 

I am 100% certain that the % is more than 0. Just kidding.. I would guess a number around 20 to 30%?

[Civicblade]

On 1/27/2021 at 7:02 PM, Jwee85 said:

I am not financial expert.

But if TS  or anyone got the time to entertain me. Can you do a simple comparision of buyer who has the cash but decides to do 10 year year loan instead. Means for the $100,000 car, the buyer has $50,000 in his bank. But chose to go with the ten years 0-downpayment loan instead. Assuming the $50,000 remains in the fix deposit or bank account untouched till the car is sold. 

Ignoring teheconcept of using the cash for investment with higher returns, but also got possiblilities of losses.

Is it still wise to use the cash for the downpayment? Or is is simple math, since the car loan interest is 1.99% vs the bank interest of 1%.

But since the bank loan is compounded interest, will it be LLPT whether is it still against to do 0% or better to do 30-40% downpayment.

 

Anyone?

 

 

If you like the idea of borrowing money to pay taxes or in other words, paying interest on top of taxes that you pay to the government.. then by all means go take a loan for a car. The bulk of the car price are simply just taxes. For a $100k car, you are likely to be paying around $60k as taxes, the rest being the money paid to the manufacturer (OMV) and the dealer margins. 

Singapore's tax system is brilliant. The personal income tax level are super low compared to other cosmopolitan cities (and developed countries), but there are no shortage of people wanting to contribute extra taxes on top of what they mandatorily have to pay. 

Thank you all car buyers for contributing to nation building and for willingly paying more taxes for the state to conduct income redistribution to the less well off in our society. 

[Civicblade]

On 1/31/2021 at 2:50 AM, Vinceng said:

During the last Motorshow in Jan 2020 at Suntec, when the C160 was launched, I overheard a young couple asking if there's zero down payment and 10 yrs loan. That's a serious cause for concern.

If financially stretched and MUST buy a brand new car, there's loads of choices available looking at Malaysian and Korean makes @ < half the price of the C160. But sia suay and no face to face peers.

No need to worry for the young couple. MAS has the TDSR to protect them. If they don't want to be protected by our brilliant Heng Swee Kiat, then they will learn life's lesson the practical way and be more humble and careful in the future. It may not be a bad experience after all. 

[Civicblade]

OCBC is very nice to put the REAL interest rate alongside the "bait" interest rate in their application webpage. 

If you cannot do better than 4.5% return per annum in the market with your money.. then either pay down as much or don't take any loan. FYI, private property investment return in Singapore is less than 4.5% rental yield (capital gain is another story). 

 

 

[yishunite]

24 minutes ago, Civicblade said:

If you like the idea of borrowing money to pay taxes or in other words, paying interest on top of taxes that you pay to the government.. then by all means go take a loan for a car. The bulk of the car price are simply just taxes. For a $100k car, you are likely to be paying around $60k as taxes, the rest being the money paid to the manufacturer (OMV) and the dealer margins. 

Singapore's tax system is brilliant. The personal income tax level are super low compared to other cosmopolitan cities (and developed countries), but there are no shortage of people wanting to contribute extra taxes on top of what they mandatorily have to pay. 

Thank you all car buyers for contributing to nation building and for willingly paying more taxes for the state to conduct income redistribution to the less well off in our society. 

Not only we pay the highest taxes on cars in the world, but car dealers make the highest margins of auto dealers in the world... all thanks to easy finance and financially illiterate carbuyers

[lexiton]

how do dealers manage to get full loan for customer since MAS requires 70% of downpayment (based on omv < $20k)

[Ginyu]

3 hours ago, lexiton said:

how do dealers manage to get full loan for customer since MAS requires 70% of downpayment (based on omv < $20k)

Wow MAS only allow 70% down payment for omw < $20k so those who drive cars like Altis or Avante  either must be full cash or max 30% loan😂

[Sdf4786k]

On 2/1/2021 at 9:32 PM, Hamburger said:

Cant speak for others, but having owned a few German and other conti marques,  brand or prestique means little to me now. 

I only look at cars that offer bang for bucks. That's what matters imo. 

Because you not shallow mah..

those with inferiority complex need affiliation like a top tier secondary school accolade.

neighbourhood school is not something acceptable..

just like if u kanna big time, if not from good family background, u screwed ..

if not Luxus quietness u knock down n pretend to be a virgin also screwed big time … enuff said.. 

[Jamesc]

Why not?

You borrow $1,000 today

and in 10 years time you only pay back $700.

You get a 30% discount because of inflation.

 

[Goldenvodka]

A simple advice for people who do not have enough much cash to buy a car.

1) Go and use cash buy a 10 years old car. COE ending soon that kind. Should cost about 10k or below for a normal family vehicle.

2) Take up COE loan which does not require any down payment and interest rates are reasonable

 

Anything else that happen after that, you only need to scrap your vehicle and lose your 10k or below car purchase price and penalty for the COE finance company which should not be a huge sum.

[PSP415]

1 hour ago, Goldenvodka said:

A simple advice for people who do not have enough much cash to buy a car.

1) Go and use cash buy a 10 years old car. COE ending soon that kind. Should cost about 10k or below for a normal family vehicle.

2) Take up COE loan which does not require any down payment and interest rates are reasonable

 

Anything else that happen after that, you only need to scrap your vehicle and lose your 10k or below car purchase price and penalty for the COE finance company which should not be a huge sum.

It may be wiser to just rent if the car is needed on a short term basis eg a few days/weeks/1-3 months/adhoc. At least the financial outlay is capped per use. Or call a cab or grab ride. 

COE cars may have hidden costs due to higher mileage and wear/tear items due for replacement etc. It may be a few hundreds to a few thousands depending on the situation.

There's carpark, petrol, insurance to maintain too. Can burn the hole in pocket until cannot wear/mend liao. 😅

If really cannot afford at this moment, dun buy at all. Please. Save up first. 

Stay safe  

Cheers 

 

 

[Himanshu_g]

@Ginyu Google up Overtrade - that's the secret sauce dealers have come up with

[Jamesc]

I got hear that jamesc got a lot of 10 year old COE used cars.

Very good quality used cars at very affordable prices.

On 8/30/2021 at 11:29 AM, Goldenvodka said:

A simple advice for people who do not have enough much cash to buy a car.

1) Go and use cash buy a 10 years old car. COE ending soon that kind. Should cost about 10k or below for a normal family vehicle.

2) Take up COE loan which does not require any down payment and interest rates are reasonable

 

Anything else that happen after that, you only need to scrap your vehicle and lose your 10k or below car purchase price and penalty for the COE finance company which should not be a huge sum.

 

[Jamesc]

ya lah...if can't afford, then don't buy lah. Can't survive in SG without a car? can't go out buy food? coffee shop or sheng siong too far? Those who wants to buy and can't afford are those looking good from outside and save a lot of money on free parking. Who are they? HDB car park tailgater 🤣

23 hours ago, mikk123 said: