This section contains some illustrations of what can go wrong in the car ownership experience. All could have been avoided if the subjects had spent a little more time in the decision making process and had sought some good independent advice.

In some illustrations, names and certain references have been changed to protect identities. Any similarities to actual persons are not intended and are purely coincidental.

ILLUSTRATION 1– Great Price, Wrong Car
With progressively lower car prices, Jane and her husband were looking for a new car and went through the usual routine of looking at local magazines, visiting the car showrooms weekend after weekend. After speaking with a couple of friends, they decided to buy a really nice new SUV (Sports Utility Vehicle) with all the bells and whistles for about $150,000 which seemed like a really good deal.

After the euphoria of getting the keys to the new car withered away, they were beginning to feel frustrated because they had not anticipated the need to transport one of their elderly parents to and from hospital for regular checkups. The elderly parent found it extremely difficult to get in and out of the SUV because it was slightly higher than the average vehicle.

What upset them was the fact that they could have foreseen this particular need but didn’t adequately consider the accessibility issue because they were so focused on getting a good price for the car. They eventually sold the car within 6 months of purchase at a loss of about $20,000 and ended up buying a car which was more “elderly friendly”.

This situation could have been avoided if they had spent a little bit of time on understanding their particular motoring needs.

ILLUSTRATION 2 – Relocated to Singapore, uninitiated, overpaid for a pre-owned car
This occurrence of cases like this is fairly common. Rene came to Singapore on a 2 year overseas posting. He quickly settled in, rented an apartment and decided to buy a car. After some deliberation, he decided on buying pre-owned. So he scanned the classifieds section in the local newspaper, made a couple of calls, visited a couple of dealers and settled on a shiny, nearly new Saab. The price seemed reasonable and he thought nothing of it until it was time to pack up and leave the country. It then dawned upon him that he had severely overpaid for the car and he discovered this when he started receiving offers from various potential buyers. Rene had failed to check what the going rate for the annual depreciation was on the car model he was buying and ended overpaying by nearly $5,000. The car was reliable but he simply overpaid.

All this could have been avoided by spending a little more time understanding the market depreciation amounts for the cars he was considering. 

ILLUSTRATION 3 – New driver, enthusiastic, too quick on the draw, insurance nightmare
Phyllis was a newly qualified driver with limited driving experience under her belt. She bought her first car, a second hand Volvo soon after her obtaining her driving licence. In less than a year, she was involved in an accident and soon after, she decided that she would like to upgrade and buy a new car. She shopped around and was soon sold on another similar car (continental, 2 litre, light pressure turbo) which was being sold at a promotional price. She signed on the bottom line and was pretty happy with the deal she got. The problems started to arise when she was trying to get insurance for the new car. The quotes received were ridiculously high, some insurance companies even rejected her application outright. Phyllis had failed to realise that because of her limited driving history and her recent accident that her risk profile had increased dramatically. It was too late and in the end, her premium was way in excess of $4,000.

This situation could have been avoided if she had held on to her existing car until her claims and experience record improved or had bought a car with a lower risk profile (eg, non-turbo charged).

ILLUSTRATION 4 – It looks like a Lexus, it feels like a Lexus, but it’s not a Lexus
Majorie and her husband Rick had recently arrived in Singapore and were looking to buy a pre-owned SUV. They had previously owned a Lexus in the US and wanted to get one while they were here in Singapore. They shopped around and found a really nice looking Lexus (or so they thought) for what seemed like a reasonable price. They felt good about managing to haggle a couple of grand off the asking price and paid the deposit. When they collected the car and the documentation, they noticed that the make and model on the registration papers said Toyota Harrier. They raised this with the dealer who insisted that essentially, the two cars are identical. They managed to get compensation of another $1000 to “settle the matter” and walked away with a bitter taste in their mouths.

In Singapore, there are many parallel (grey) imported Toyota Harriers that are re-badged as Lexus RX300s. Cosmetically, there is not a lot between the two cars. However, there are some significant differences including engine size and certain other features. Of course, the most critical difference is in the resale value of the car. A Lexus will generally fetch a higher resale value than a Toyota of the same age, regardless of how it’s badged.

Always check the registration papers before you sign on the sales agreement.

Toyota and Lexus are registered trademarks of the the Toyota Motor Company and Lexus respectively.

ILLUSTRATION 5 – Bought a flooded car!
This case was featured in the local press (The Straits Times, 13 September 2004) about a lady who bought a 2 year old pre-owned Honda MPV from a used car dealer. The car apparently started to give her problems from day 1 and after some investigation, she discovered that the vehicle had been parked in a basement which flooded and resulted in substantial damage to the vehicle through it being submerged.

Subsequent checks with the authorised dealer showed that the odometer (the device that indicates the vehicle’s mileage) reading was less than what was recorded in the service history, another sign that something was amiss.

The previous owner had wanted the vehicle repaired but the insurance company deemed the car to be “beyond economical repair”. The vehicle was then sold to a dealer who in turn sold it to another. Eventually, the “repaired” vehicle ended up back on the market and into the unsuspecting hands of this lady who said “’I feel wronged because when I asked them whether this was an accident car or if there was anything wrong with it, they said no.” (Quote taken from the Straits Times article).

While there is never a guarantee of a perfect car when one buys pre-owned, there are ways of lowering the risk of buying into a disaster. Always get the vehicle evaluated by a professional. If possible, get the vehicle to the authorised dealer asking them to check if the warranty is still valid or to give it a once over. If anything appears to be out of order (like a mismatched odometer reading), chances are the authorised dealer will point it out to you. If in doubt, seek professional advice. If you do not feel comfortable, walk away. There are plenty of cars out there to buy.