Things to worry about

Calculating Depreciation
To understand how much you will be saving, you will need to know how to calculate the depreciation of the car. The formula for counting depreciation goes like this:

DEPRECIATION = (Selling Price - PARF benefit) / number of months left on COE

*NOTE - The above formula does not include total interest paid if you are taking a loan. For an effective annual depreciation figure, calculate the total amount of interest you will pay over your loan period and add that to the selling price.

Be aware that all calculations here are on the assumption that you will use the car up till its tenth year. If you decide to de-register the car earlier than that, you will be looking at a higher depreciation figure.


Unique cars
Though new cars might boast of better features, safety and comfort, it does not make old cars obsolete. There are some cars that generated an almost cult-like following but had ceased production. Classic examples are the Austin Minis and the Volkswagen Beetles. Cars such as the Honda Civic EG series are also popular with enthusiasts due to its racy nature. All these cars can only be found in the pre-owned market.

Monetary Woes
Before thinking that a pre-owned car is the way to go, let us face facts. Firstly, it is a pre-owned, meaning you are getting something that someone else had used for a while. This means that if the previous owner did not do a good job of maintaining the car in tip-top condition, you are looking at heavy repair and replacement costs after purchase. This can potentially add up to displace the savings gained from purchasing a pre-owned. Therefore, making meticulous checks prior to purchase is absolutely important.

Wear and Tear
Wear and tear due to moving mechanical parts can also cost you more than you had expected. A three to four year old car usually means that you have to replace parts such as belts, batteries and tires. If you are getting a twelve-year-old car, be prepared to shell out a lot more engine repairs.

 


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