New cars are no longer as cheap to buy. It will be nigh impossible to see COE prices fall back to the sub-$10,000 levels again. This means that entry-level cars are now priced at where mid-level cars used to be.
If you are in the buying market and compromising means getting a lesser car, the pre-owned section would be where you might want to take a look. To that extent, here are things that you might want to know about pre-owned cars.
Spend less for more
Cars are generally built to last a lifetime as long as you maintain them properly. A discerning buyer will realize that a pre-owned car in the local market here hardly seems to be "used" at all and yet costs considerably less than a brand new one.
To further prove this point, an average Singaporean's mileage per day is estimated by the Government to be about 55km. This works out to be around 20,000km a year. Multiply that by three, and the average mileage a three-year-old car would have done is still well below hitting six figures. Crossing the big 100,000km mark is usually when a car is said to have transited from being still "new" to "old".
Save more in the long run
Smart shoppers prefer pre-owned cars due to the fact that they depreciate less than a brand new car. A car depreciates the most for the first three to four years, after which it will depreciate at a more gradual pace till it reaches its tenth year (end of COE). The reason being that depreciation is tied to the selling price of a car, which means the cheaper you buy, the less it depreciates.
This means if you buy a pre-owned car at its third year, you essentially let the first owner take the brunt of the depreciation (the instant a new car is out of the showroom, it is worth a few thousand dollars less). Assuming you are using the car till its tenth year, you are likely to see savings of over $7000 for a regular car. Savings increase steeply when purchasing pre-owned Continental marques or cars with big capacity engines.