Worth it to sell 5 year old car (with high COE) and buy new

[Mkl22]

Am also offered like very close to my scrap value for my 3.5 year old 2015 Mazda 2

My brother Honda Jazz 2/2016 was also exported. Offered paper plus some body. His Coe was too high vs cat A coe in feb 2019. Edited June 19, 2019 by Mkl22

[Discoburg]

Thats why I intend to drive for awhile more.

 

This ride is giving me no problems and I still like it, just backside itchy, looking around at cars.

 

Drive for 16 more months and I dun have to pay any instalments anymore. 

Yup. Same situation.
So if u think of the current value of the car as a realised loss already. The depreciation per year is not far from just coe and paper value winding down. So excluding potential coe rise next year on. actually u sell now vs next year etc its sama sama.

 

Same same lor        

My brother Honda Jazz 2/2016 was also exported. Offered paper plus some body. His Coe was too high vs cat A coe in feb 2019.

 

[Mkl22]

The correct way is to factor in the additional price of the new car and find the depreciation. That way you will know if it is worth changing car now or not.

[Ct3833]

Can't say no itch lah! The itch is always there, especially when the models make you drool One thing for sure,I dare not scratch!ð

precisely, if I dare to itch for a moment, I will have to bear the pain for a long long time. Haha. Edited June 19, 2019 by Ct3833

[Wolverine23]

Anotherthought:

 

Refinance 5 year old Audi (no outstanding loan) for 5 more years at cheap interest rate of 1.99% and use the cash for investment.

[Ct3833]

The correct way is to factor in the additional price of the new car and find the depreciation. That way you will know if it is worth changing car now or not.

I have done quite many such calculations before, because of the significantly higher price paid for the first car, one is not going to save a lot even if he switch to a low coe car, especially if the saving is amortise throughout the months linearly. This is especially so when one have bought a premium car, the write off from the dealer margin, ARF etc is very high, saving become insignificant.

 

But if one has a very high COE B&B car, then it makes a lot of sense to sell, scrap the existing car and buy a new one.

Edited June 19, 2019 by Ct3833

[Theoldjaffa]

 

Keep changing scenarios and asking us to discuss without giving details of his true situation.

 

Sounds like he's just trolling and taking us for a ride.

[Wolverine23]

Keep changing scenarios and asking us to discuss without giving details of his true situation.

 

Sounds like he's just trolling and taking us for a ride.

Just evaluating the various options. Nothing signed yet so many options come into mind

[Ct3833]

Anotherthought:

 

Refinance 5 year old Audi (no outstanding loan) for 5 more years at cheap interest rate of 1.99% and use the cash for investment.

This is a completely different discussion. Your initial question was about how to spend less, this new question is about how to make more money.

You need to understand that your 1.99% is based on flat rate, the yearly interest dollar would not reduce while your outstanding loan get smaller over the year, that means you are paying about 4% interest rate effectively. Unless you can derive much higher than 4% return from your investment, otherwise you can forget about doing it. Worse is if tomorrow Donald Trump comes out with another brilliant idea to deal with China, your investment may evaporate, then you need to think about how to pay your loan in additional to your interest.

[Mkl22]

I have done quite many such calculations before, because of the significantly higher price paid for the first car, one is not going to save a lot even if he switch to a low coe car, especially if the saving is amortise throughout the months linearly. This is especially so when one have bought a premium car, the write off from the dealer margin, ARF etc is very high, saving become insignificant.

 

But if one has a very high COE B&B car, then it makes a lot of sense to sell, scrap the existing car and buy a new one.

His case is sort of a downgrade and to extend the lifespan of the car.

For those who change from eg a 5year old e200 to a new e200. Like you said for a premium car. Then I agree it won’t make sense as one would pay more.

 

Yes so the scenario works for a downgrade and a b&b car where the coe is a greater proportion of the purchase price.

[Wolverine23]

This is a completely different discussion. Your initial question was about how to spend less, this new question is about how to make more money.

You need to understand that your 1.99% is based on flat rate, the yearly interest dollar would not reduce while your outstanding loan get smaller over the year, that means you are paying about 4% interest rate effectively. Unless you can derive much higher than 4% return from your investment, otherwise you can forget about doing it. Worse is if tomorrow Donald Trump comes out with another brilliant idea to deal with China, your investment may evaporate, then you need to think about how to pay your loan in additional to your interest.

Understand.

 

One of the consideration to change to a sub 100k car is that it also enable me to "cash out".

 

So if I refinance, I can cash out and still maintain the current ride. Of course, likely to spent more on wear n tear

[Lala81]

I have done quite many such calculations before, because of the significantly higher price paid for the first car, one is not going to save a lot even if he switch to a low coe car, especially if the saving is amortise throughout the months linearly. This is especially so when one have bought a premium car, the write off from the dealer margin, ARF etc is very high, saving become insignificant.

 

But if one has a very high COE B&B car, then it makes a lot of sense to sell, scrap the existing car and buy a new one.

 

It does make sense if u downgrade from Cat B to Cat A. But i know myself ....

 

Take my example. I bought at 161k. 

1 year ago, best cursory offer i had was for 79k (paper value then was 73k). Then i would have to take 90k loss over less then 3 years 3 months.

If i had bought a SUV/harrier etc, would have been much easier to sell. But unfortunately my leng men executive sedan has zero demand.

 

Now my car is 4.5 years old. Currently right now paper value should be around 65-66k.

Even now, my mileage is only 60k. 

His case is sort of a downgrade and to extend the lifespan of the car.

For those who change from eg a 5year old e200 to a new e200. Like you said for a premium car. Then I agree it won’t make sense as one would pay more.

 

Yes so the scenario works for a downgrade and a b&b car where the coe is a greater proportion of the purchase price.

 

Yup. Precisely. Haha u summed it up perfectly.

But what makes sense in the head isn't necessarily what u want 

Honestly, i don't want to downgrade 

[Mkl22]

It does make sense if u downgrade from Cat B to Cat A. But i know myself ....

 

Take my example. I bought at 161k. 

1 year ago, best cursory offer i had was for 79k (paper value then was 73k). Then i would have to take 90k loss over less then 3 years 3 months.

If i had bought a SUV/harrier etc, would have been much easier to sell. But unfortunately my leng men executive sedan has zero demand.

 

Now my car is 4.5 years old. Currently right now paper value should be around 65-66k.

Even now, my mileage is only 60k. 

 

Yup. Precisely. Haha u summed it up perfectly.

But what makes sense in the head isn't necessarily what u want 

Honestly, i don't want to downgrade 

 

let assume some numbers for your case to just show.

 

assume you want to go for a toyota harrier which is sort of the same level. was $140k then. assuming you get 80k for trade in thus you needed to top up 60k. so total expense would be $221k over 13.3years and with a PARF of lets say 15K for both harrier and your current car, you get around 14.6k if you were to drive on till the end for current car vs 15.5k for a new Harrier.

 

now for today's price the harrier is still approx 140k or might be even a tad lower. assume paper for current car so you have to top up 75k which makes total outlay $236k. then remove PARF of 15K and divide by 14.5yrs = $15.24k

 

If you can stomach the top up i would consider looking around and changing unless you are sure you can last till scrap for the current car. you have until just before the car hits 5years old as the reduction in PARF will kick in after.

 

[Lala81]

let assume some numbers for your case to just show.

 

assume you want to go for a toyota harrier which is sort of the same level. was $140k then. assuming you get 80k for trade in thus you needed to top up 60k. so total expense would be $221k over 13.3years and with a PARF of lets say 15K for both harrier and your current car, you get around 14.6k if you were to drive on till the end for current car vs 15.5k for a new Harrier.

 

now for today's price the harrier is still approx 140k or might be even a tad lower. assume paper for current car so you have to top up 75k which makes total outlay $236k. then remove PARF of 15K and divide by 14.5yrs = $15.24k

 

If you can stomach the top up i would consider looking around and changing unless you are sure you can last till scrap for the current car. you have until just before the car hits 5years old as the reduction in PARF will kick in after.

 

 

Thanks for the numbers output.

 

I guess for me, it's more about want.

 

I'm quite happy driving my car though i wish it's a TC instead of NA engine. Won't have much issues driving it until 8-9th year mark (can't say until 10 cos my dad's accord started giving some minor problems at 8 year mark).

 

Yes it's either change soon or hold it until the next low COE break which may only come another 5 years time. But worst case i may just buy an older car then wait for COE to come down again.

 

ultimately any B&B car will do 95% of the time. Hence it's more of the subjective and intangibles lol.

Edited June 20, 2019 by Lala81

[Mkl22]

I guess for me, it's more about want.

 

I'm quite happy driving my car though i wish it's a TC instead of NA engine. Won't have much issues driving it until 8-9th year mark (can't say until 10 cos my dad's accord started giving some minor problems at 8 year mark).

 

Yes it's either change soon or hold it until the next low COE break which may only come another 5 years time. But worst case i may just buy an older car then wait for COE to come down again.

 

ultimately any B&B car will do 95% of the time. Hence it's more of the subjective and intangibles lol.

 

same for me. haha

 

[Hamburger]

Thanks for the numbers output.

 

I guess for me, it's more about want.

 

I'm quite happy driving my car though i wish it's a TC instead of NA engine. Won't have much issues driving it until 8-9th year mark (can't say until 10 cos my dad's accord started giving some minor problems at 8 year mark).

 

Yes it's either change soon or hold it until the next low COE break which may only come another 5 years time. But worst case i may just buy an older car then wait for COE to come down again.

 

ultimately any B&B car will do 95% of the time. Hence it's more of the subjective and intangibles lol.

 

honda accord right? So difficult to sell meh????

[Lala81]

honda accord right? So difficult to sell meh????

 

I can try to sell myself. But paper value so high with 75k COE, got takers?

I'm dubious especially since i cant offer dodgy loans haha 

[car50]

May have missed the discussion

What is ur car model? to lose 90k over 3 years?

3 year old car with high coe should still have decent resale value

If paper value is 73K, cant be that highest offer only at 79k for a 3 year old car. Its essentially buying at "cost" for the buyer and very low risk because buyer can scrap the car anytime with little depr at that price even after 1-2 years of driving compared to ur 30k depr/year

 

Agree with bros here that if u are downgrading it may make sense and not switching to similar makes. 

 

 

It does make sense if u downgrade from Cat B to Cat A. But i know myself ....

 

Take my example. I bought at 161k. 

1 year ago, best cursory offer i had was for 79k (paper value then was 73k). Then i would have to take 90k loss over less then 3 years 3 months.

If i had bought a SUV/harrier etc, would have been much easier to sell. But unfortunately my leng men executive sedan has zero demand.

 

Now my car is 4.5 years old. Currently right now paper value should be around 65-66k.

Even now, my mileage is only 60k. 

 

Yup. Precisely. Haha u summed it up perfectly.

But what makes sense in the head isn't necessarily what u want 

Honestly, i don't want to downgrade