Help!!

[Emkay]

How about my Colt?

 

Your colt or jazz?

 

I'll do an analysis base on my excel tool here. (It may contain errors as I just develop it yesterday so use these opinion at your own risk)

See the chart here:

[inline Fit02-2002.jpg]

1. If you buy on the month of Aug 2005 @ $48,500, you'll be paying for

a. $36,679 for the paper value

b. $11,821 for the PARF car-body-value lost for first 3 years

 

2. (a) is fixed so can't really bargain on it.

 

3. Now we look at 1(b). Assuming this car has $0 body value at 6th year, the cost of PARF depreciation & body value lost at the end of 5th year will be:

= OMV + 0.75 (ARF) + 0.2 (OMV)

= 1.2 (OMV) + 0.75 (1.3 OMV)

= 2.175 (OMV)

= $34,197.53

 

4. Since u're getting it at the age of 32 month (as of Aug 2005):

you should pay for a linear value of this lost (as in (3)):

= (60-32)/60 x $34,197.53 = $15,958.85

 

So to me, fair value should be about $52,637.85. In theory, you have a fairly good bargain if you get it at 48K BUT this is on the assumption that the first 5 year of depreciation of PARF & car-body value is Linear. If this assumption is okay with you then you're getting a bargain.

 

Of course, in real-life the depreciation is usually not linear and driven by market force:

the price (depreciation) you pay for owning the car for first 30 months cannot be the same for that of the next 30 months right? And in your case, the previous owner is offering about 4.5K for that privallage.

 

So is it worth it, you decide. Remember, the selling price is still determined by market force within a small margin (i.e. 4-8K for a 50k car). However, consider how rare is the car (i.e. how many seller) and how popular is the car (i.e. how many buyer) will probably help you find a good bargain or get a feel of what you are paying for.

 

Emkay

[Acemundo]

first few days of your job u might not need to drive around so much, maybe can make do with taxi first while you shop for your car.

 

also there's those 1-2 week car rental u can consider.

[Venuswxy]

I know you quoted me the Jazz already, I want to know abou the Colt also. Hee..selling at $48k july 2003 car.

[Acemundo]

$3k off his price is not a lot to ask. usually dealers start with about 6-10k margin as a starting offer price. it can be whittled down by another few k thru hard bargaining

[Venuswxy]

But my company is so funny! I must have a car in my name in order to get my allowances. If not cut by $250. Another thing I promise the manager I can get a car when i start.

[Fluffy]

you've got PM!

[Porker]

Then can you help me calculate this July 2003 Mitsubishi Colt? Car dealer selling me at $48k. COE: $31,095 OMV: $13,853 I really take my hat off you. Thank you

 

Suppose you buy the Colt in July 05 --->

 

COE value (80% remaining): $24,876

 

ARF rebate: $13,506

 

Therefore, paper value = $38,382

 

He quoted you $45,000. That means he's asking $6,618 for the body.

Edited July 1, 2005 by Brandons

[Seaweed]

then rent a lousy car first lor...simple...rather then let people con...

[Venuswxy]

Actually his asking price is $51.8k. Slash it till $48k. It's not I die die must buy car, but I just don't want to miss a deal if it is good. Some more, I saw this car, though never test drive, felt it to be in good condition. Do you know without a car, my allowance is only $350? Sigh

[Emkay]

[inline Colt07-2003.jpg]

I know you quoted me the Jazz already, I want to know abou the Colt also. Hee..selling at $48k july 2003 car.

Sorry, didn't see your Colt post. I'll copy and paste & do a similar analysis (same disclaimer applies ):

 

1. If you buy on the month of Aug 2005 @ $48,000, you'll be paying for

a. $38,115 for the paper value

b. $9885 for the PARF car-body-value lost for first 2 years

 

2. (a) is fixed so can't really bargain on it.

 

3. Now we look at 1(b). Assuming this car has $0 body value at 6th year, the cost of PARF depreciation & body value lost at the end of 5th year will be:

= OMV + 0.75 (ARF) + 0.2 (OMV)

= 1.2 (OMV) + 0.75 (1.3 OMV)

= 2.175 (OMV)

= $30,130.28

 

4. Since u're getting it at the age of 32 month (as of Aug 2005):

you should pay for a linear value of this lost (as in (3)):

= (60-25)/60 x $30,130.28 = $17,575.99

 

So to me, fair value should be about $55690.99. In theory, you have a fairly good bargain if you get it at 48K BUT this is on the assumption that the first 5 year of depreciation of PARF & car-body value is Linear. If this assumption is okay with you then you're getting a bargain.

 

Of course, in real-life the depreciation is usually not linear and driven by market force:

the price (depreciation) you pay for owning the car for first 24 months cannot be the same for that of the next 36 months right? And in your case, the previous owner is offering about 7.7K for that privallage.

 

So is it worth it, you decide. Remember, the selling price is still determined by market force within a small margin (i.e. 4-8K for a 50k car). However, consider how rare is the car (i.e. how many seller) and how popular is the car (i.e. how many buyer) will probably help you find a good bargain or get a feel of what you are paying for.

 

Emkay

Edited July 1, 2005 by Emkay

[Porker]

This may be something new but its definitely useful for you.

 

When authorised agents bring in a car for sale, they have to pay ARF (additional registration fee), COE, CUSTOMS DUTY, GST as well as a nominal registration fee (only $140).

 

Now what is OMV? It is OPEN MARKET VALUE. It is what you pay to Toyota Japan when you buy the car from them.

 

Example ---> Cycle and Carriage (agent for Mitsubishi) paid Mitsubishi Motors Japan S$13,853 for that Colt.

 

When it arrives in Singapore C&C has to pay ARF, COE, CUSTOMS DUTY as well as GST for registration for sale to consumers. Let me break it down step by step for you.

 

OMV = $13,853

ARF = 130% OF OMV (set by government) = $18,008

CUSTOMS DUTY = 20% OF OMV (set by Singapore Customs) = $2,770

GST (5% of OMV + CUSTOMS DUTY) = $831

COE = $31,095

ADDITIONAL REGISTRATION FEE = $140

 

therefore,

 

TOTAL COST TO BRING IN THE CAR = $66,697

 

Of course C&C sold the car at a higher price (they need to earn a profit as well). So there you have it. This is the system that is in working.

 

How do you calculate paper value then?

 

COE is worth 10 years. Therefore you minus 10% after each year has passed. Simple yeah?

 

ARF REBATE??

 

75% ARF REBATE if car is less than 5 yrs (YOUR COLT)

 

70% ARF REBATE if car is more than 5 yrs but less than 6 yrs

 

65% ARF REBATE if car is more than 6 yrs but less than 7 yrs

 

60% ARF REBATE if car is more than 7 yrs but less than 8 yrs

 

55% ARF REBATE if car is more than 8 yrs but less than 9 yrs

 

50% ARF REBATE if car is more than 9 yrs but less than 10 yrs

 

So now you know how to calculate for your COLT?

Edited July 1, 2005 by Brandons

[Venuswxy]

So to me, fair value should be about $55690.99. In theory, you have a fairly good bargain if you get it at 48K BUT this is on the assumption that the first 5 year of depreciation of PARF & car-body value is Linear. If this assumption is okay with you then you're getting a bargain.

 

Of course, in real-life the depreciation is usually not linear and driven by market force:

the price (depreciation) you pay for owning the car for first 24 months cannot be the same for that of the next 36 months right? And in your case, the previous owner is offering about 7.7K for that privallage.

 

So is it worth it, you decide. Remember, the selling price is still determined by market force within a small margin (i.e. 4-8K for a 50k car). However, consider how rare is the car (i.e. how many seller) and how popular is the car (i.e. how many buyer) will probably help you find a good bargain or get a feel of what you are paying for.

 

Sorry i don't understand this part. guess I am getting more and more blur. Sorry

[Venuswxy]

Then can you help me calculate this July 2003 Mitsubishi Colt? Car dealer selling me at $48k. COE: $31,095 OMV: $13,853 I really take my hat off you. Thank you

 

Suppose you buy the Colt in July 05 --->

 

COE value (80% remaining): $24,876

 

ARF rebate: $13,506

 

Therefore, paper value = $38,382

 

He quoted you $45,000. That means he's asking $6,618 for the body.

 

Seems quite alot....

[Emkay]

Sorry i don't understand this part. guess I am getting more and more blur. Sorry

 

Hmm .. May be you should view it from a point of affordability:

At the price of $45K, if full 7 year loan @ 3%, you payment will be

 

Loan Period Monthly

7 Years $ 648.21

6 Years $ 737.50

5 Years $ 862.50

4 Years $1050.00

 

If you take full 7 years loan, and your monthly allowance can cover the monthly payment ONLY. If you are in the sales line, you may want to set aside 300-400 per month for parking & petrol. Is this something you can live with (for next 7 years) and your job security allows you do made such commitment? You may have to look at your other commitments, e.g. marriage, kids, family, housing etc.

 

Also do not forget @ 3% for 45K, you're commiting into a yearly interest of $1,350K (about $112.50 monthly).

 

If not, suggest find a cheaper car, try public transport for a few months, or renegotiate for a better package.

You may not use up $350.00 per month for taxi depending on the type of work u are involved in.

[Seaweed]

Humm...i am confuse too....paper is 38115...how come fair value 55690...when the dealer buy the car...at most he pay the fellow 38115 + maybe 5k....so if assume they buy it in at 43115...but they sell 48000...their profit is 4885.....it's now time for us to squeeze the dealer...

[Emkay]

When I say fair, it mean fair for previous owner and next buyer on the basis of linear depreciation.

 

Remember, the paper value of a 1-year-old car and that of a 5-year-old car is only 0.4 x COE.

Say COE is 25K, that will translate to 10K different in paper values of 1 year old and 5 year old car.

 

So we shouldn't take only the paper value and put a fix (say 5K) to the car body value right? If this is the case, I'll ALWAY buy a 1 year old car & sell on the 5th year (@ paper value + 5K) to enjoy a 2.5K depreciation a year ... where got such lobangs, let me know I also want.

 

Usually people will want to pay more for a 1-year-old car's body then a 5-year-old car's body.

 

By saying fair value, I am assuming each of the 1st 5 years carries equal depreciation (thus linear) however, this is not the practice now as it is buyer market. To work out a close-to-life depreciation rate for each year, more statistic needs to be collected.

[Acemundo]

oh i see..then tougher to go further. maybe can settle around 47-48k

[Seaweed]

get what you mean now...cause your fair value is misleading at first...anyway..in order to avoid confusion...I will use the simple form to determine how much i should pay for the car...that is selling price of car from dealer consist of paper value+body value+dealer profit...paper value got fix value and body value also got a market value...dealer profit also got market rate...

 

and dealer profit = selling price - paper - body....

 

I think presently dealer are earning too much liao...

 

pai sei har...

 

"So we shouldn't take only the paper value and put a fix (say 5K) to the car body value right? If this is the case, I'll ALWAY buy a 1 year old car & sell on the 5th year (@ paper value + 5K) to enjoy a 2.5K depreciation a year ... where got such lobangs, let me know I also want."

 

you are wrong liao....let me put in a very simple senario...number are just estimate...

 

I buy a brand new car say 80k....the agent earn 10k...price of car 70k...paper value at new...maybe 50k....

 

car price is falling...

 

after one year when i sell the car ..at present time....dealer at most pay me paper + body....Why car depre so much during the first few year ?? because first buyer got to absorb the huge amount agent earn...

 

car after 3 years will not have much body value...unless expensive car lar...buying a car at 1 year and sell at 5 year ...every year depre 2.5k ?? how can it be ?? cause you lost on coe and body value...but depre is small...that's why people whom always change car will get 2nd car to minimise lost...humm... anyway your chart is good..

Edited July 1, 2005 by Seaweed