Used Cars

[Sandi]

Can anyone decifer the used car want ads for me?  What does PARF and OMV stand for?  Do I add these to the stated price of the car to get the total asking price?  What are pertinent questions to ask concerning a used car in Singapore?  I think I understand the basics of COE in relation to a new car but what happens when it expires?  

[lingo]

PARF is the amount the government will pay you at the end of ten years for the car. It is (I think) 80% of OMV, or open market value. OMV is used for determining the tax on a new car but I've never really seen the point in used ones. The PARF is useful as if you take the actual asking price for the car (sometimes hard to ascertain), take off the PARF and then divide by the number of years left on the COE, you get the approximate depreciation, which is more or less straight line after the first couple of years.

Whatever you buy get it tested.

Good luck!

[Rob]

Used car buying in Singapore is a minefield

As mentioned above all cars have a quoted OMV, which is basically the base new value of the car when new, before all the various taxes and duties are added. The PARF - often referred to as the scrap value - is 80% of the OMV and is the amount of money that the govt will give you after 10yrs if you scrap the car and buy a new one. Theoretically, I believe that you should only be able to get the PARF back if you scrap tha car and actually buy a brand new one, but in reality you can sell it to a dealer instead (less a cut for him of course)

As you are aware, the all cars on the road here have to have a COE. This lasts for 10yrs. After that time, you can buy a new COE for another 5 or 10yrs at the current PQP (prevailing quota premium) which is the 3month moving average of the COE price. You don't have to bid for this, you just pay. The 5 yr COE is half the 10yr, but be aware that once a car has has a 5yr COE, it can never have another one. Also remember, that once you buy a new COE, the car no longer has a PARF value

When you go to a car dealer, he will quote you an annual depreciation figure. This is simply a straight line depreciation between the current price and the PARF value over the remaining life of the COE. For small japanese saloons etc, expect a number in the region of 8K, for more 'prestige' makes, the figure will be over 10Kpa. Remember that this assumes that depreciation is straight line. Which it won't be for the first few years of the car's life. That the COE price remains constant (which it won't) and doesn't take into account the spread between forecourt and trade prices.  

As a foreigner, not knowing how long you will be here, ease of resale and resale value are important. There is a perception amongst Singapore car buyers that European cars are less reliable and more expensive to maintain that Japanese cars. Whether or not this is true is unimportant. It is the perception of the mkt. For resale therefore you would be better off buying something small and Japanese.  Similiarly, road tax is based upon engine size and increases considerably over 1600cc