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Assess Current Market Offerings
This step is to determine the following:

1. Whether there cars similar to yours (in terms of age, specifications, etc) available for sale locally.
2. The approximate annual depreciation for these cars based on the asking price.

Currently, the best source of information for the above will be the local newspapers’ classifieds section. Try to contact at least three advertisers so that you can get a range of estimates.

To determine the approximate annual depreciation, apply the following formula:

{(Asking price – minimum PARF benefit)/(120-age of car in months)} x 12

The minimum PARF benefit is the residual value that will apply at the end of the 10th year for that car and differs from car to car depending on the OMV (Open Market Value) of the car and the date of registration. As a rough guide the following applies:

Note: The above is a guide only. Please verify the corresponding percentages for each car you are looking at with the seller.

Once you have determined an estimate for the current depreciation levels for cars similar to yours, use the following formula to work out the approximate value of your car based on the depreciation approach:

{Approximate annual depreciation x (120-age of your car in months)/12} + Your car’s minimum PARF benefit

Determine Base Value
This will give you the absolute bare minimum that your car is worth if it were to be exported. The base value is arrived at by determining the value of the following three components and summing these values:

1. PARF rebate
2. COE rebate
3. Export value of the car (this is often referred to as the “body” value)

Both 1 & 2 are loosely referred to as your car’s “paper value” and can be determined by making an online query at www.onemotoring.com.sg under the section “De-register a vehicle”.

If you do not intend to register a new vehicle in your name, you will need to deduct a percentage (we use 5% currently) from 1 & 2 above to determine the market value of the “paper”. This is a “fee” that is applied by brokers who trade “paper”.

If you intend to register a new vehicle in your name, you may be able to realise the full value of your old car’s “paper” depending on the value of your old car’s paper and the import value of your new car and the prevailing COE levels. We advise you to discuss this with the company that is selling you the new car to obtain specific information.

An estimate for item number 3 above can be arrived at by contacting vehicle exporters who will ask you for the following information:

1. Make and model
2. Engine capacity
3. Transmission type
4. Date of registration
5. Year of manufacture
6. Colour
7. Interior trim (leather/fabric, colour, manufacturer specific trim definitions)
8. Rim type (alloys, “sports rims”, normal wheels with wheel covers)
9. Other notable accessories (eg, sun-roof, cruise control, climate control, xenon lights, rain sensors, number of airbags, transmission variants like tip-tronic, multi-function steering wheel, in-built CD changer, etc)
10. General vehicle condition

Applying the Results
Once you have completed the above, compare the results.

If you would like to seek further advice, please contact us for an obligation free discussion.

We suggest looking at the cost of car ownership in Singapore from 2 perspectives: Buying a car and maintaining one.

Owning a Vehicle in Singapore
The 2 main factors that impact the cost of car ownership in Singapore are:

• The vehicle tax regime including import duties, additional registration fees (ARF) and road tax.
• The Vehicle Quota System which limits the vehicle population growth in Singapore to approximately 3% per annum. The tool which is used to limit the number of cars registered in Singapore is the Certificate of Entitlement or COE. Each vehicle registered in Singapore must have an accompanying COE which is “attached” to the vehicle throughout the vehicle’s lifespan. For more information on the Vehicle Quota System and COEs, please visit www.lta.gov.sg (The Land Transport Authority) and www.onemotoring.com.sg (a central motoring portal).

The purchase price of a new car is made up of the following components:

Note: Table and figures last updated 31 December 2004.

More details on the breakdown of the base cost can be found at www.onemotoring.com.sg.

Here, you will also find information on average OMV amounts for each make and model currently sold in Singapore. Theoretically, one can work out approximately how much profit each dealer makes when they sell a car to you!

Recurring costs
In addition to incurring the cost of acquiring a vehicle, there are other costs associated with keeping the vehicle on the road. Here are some of those costs:

Road Tax Formula and example (as extracted from www.onemotoring.com.sg):

For privately registered petrol-driven cars:

* Effective from 1 September 2002.

Example:
If your car’s engine capacity (EC) is 1600cc, the vehicle’s annual road tax will be:

Important Note
One of the most common misconceptions on the affordability of a car is the “low monthly installment” syndrome. This happens when prospective buyers are woo-ed into buying a car on the premise that the monthly installment is low. However, many consumers do not factor in other “costs” and can end up in a horrendous situation from a financial perspective.

Also, we find that the majority of car buyers do not take enough time to consider their ownership horizon and therefore do not make the best purchase decisions from a financial perspective.
When buying a car, take your time to consider how much it will cost you overall, your intended ownership period and of course, your motoring needs.

Note: For the latest or further information, we suggest you visit www.onemotoring.com.sg

In general, there are three types of policies:

3rd party (usually the cheapest) – which covers liabilities for damage, death and/or injury to 3rd parties only.

3rd party, Fire & Theft – which, in addition to 3rd party cover, also covers accidental loss and damage by fire/theft for your vehicle.

Comprehensive (usually the most expensive) – which generally provides the widest cover including accidental damage your vehicle, personal accident insurance, etc.

Each insurance company has different terms and conditions attached to their policies. There are also differences in what is covered, excess amounts (some companies allow you to lower your excess amount by increasing your premium – they call this “buying down”), claims procedures, repair procedures etc.

We STRONGLY advise that all car owners carefully evaluate the terms and conditions associated with their insurance policies. In addition, when one’s insurance policy is up for renewal, it is advisable to spend a little bit of time to look for alternative quotes. FussFree Auto will be happy to point you in the right direction to help you source for these alternative quotes.
Tips:

• When buying a new car, check to see if you are allowed to buy your own insurance. Some dealers do allow this although many do not because of the incentives they receive when you buy a policy through them.
• If only a limited number of drivers will ever use the vehicle, check with your insurers to see if you can bring down your policy by naming individual drivers on the policy.
• If the excess offered to you seems high, check with your insurance company to see if you can “buy down” your excess by increasing your premium. Alternatively, you may wish to attempt to lower your premium by increasing the excess amount (at your own risk of course!).
• When buying an insurance policy, be sure to check out any limitations, terms and conditions, etc, before signing on the dotted line. Read the fine print!

Note: Some insurance companies have introduced a bidding system whereby workshops “bid” to repair vehicles involved in accidents. The lowest bidder (and not necessarily the best workshop) usually gets the job. If you have such a policy, please be aware that you may have limited control, if any at all, when it comes to selecting a workshop to carry out the repairs.