5 Budget-Friendly Tips for Buying a Second Hand Car
Buying a used car in Singapore – or anywhere in the world – can be overwhelming if the vehicle’s information or the purchaser’s familiarity with the buying process is inadequate. Before scouring used car listings, it is essential to be armed with the right knowledge to avoid being taken for a ride, literally and figuratively.
Proactively purchasing a second-hand car helps to avoid surcharges, risks and pitfalls associated with the process. The following tips provide guidance on how to buy a used car in Singapore without overspending and breaking the bank!
What are the Top 5 Tips for Buying a Second Hand Car?
1. Opt for a Car with a Smaller Engine Capacity
When looking for a used car, there are many factors to consider. But one thing that people often overlook is the size of the engine.
While bigger engines can be more powerful, they often consume extra fuel and produce more emissions. Therefore, owners of cars with more powerful engines and higher exhaust emissions will also pay higher taxes. Furthermore, bigger engines can be expensive, costing more for frequent maintenance in the long run.
When it comes to fuel efficiency, a smaller engine is comparatively better. As a general rule of thumb, the more cylinders an engine possesses and the less displacement each cylinder has (usually measured by cc), the better it will be at saving petrol. Besides, a lighter car needs less power to move and, therefore, consumes less fuel.
When it comes to purchasing a car, most people consider fuel efficiency, which is an important part; however, fuel efficiency is subject to engine capacity. A smaller engine will consume less fuel and produce fewer emissions than a larger engine. Therefore, opting for a car with a smaller engine capacity can eventually save you plenty of money. A vehicle between 1400cc and 1600cc should serve most people’s needs for getting about town.
2. Select Cars with Lower Carbon Emissions or EV Cars
The average car emits about 4.6 metric tonnes of carbon dioxide per year. Selecting a car with lower carbon emissions can help save money on gas and reduce the environmental impact.
Singapore uses the Vehicular Emissions Scheme (VES) to determine how much a car owner should pay depending on how much pollution its emission output generates. Under the schemes, a car owner may either enjoy a rebate or pay a surcharge depending on their vehicle’s emissions. Find out more about the VES here, but without going into details, it is no surprise that cars with less pollution will have a different price tag.
Registered used cars with low carbon emissions or an EV qualify for emission rebates that can be used to offset the Additional Registration Fee (ARF).
The Ministry of Transport has announced an EV Early Adoption Incentive (EEAI) since January 2021, with rebates as high as $20,000. In addition, road tax for mass-market electric cars is also reduced by up to 34% off.
Overall, these schemes translate into lower selling prices and maintenance costs, making low carbon emission cars price competitive. Thus, making a budget-friendly decision while adopting an environmentally friendly lifestyle will reduce both carbon footprint and the cost of petrol.
3. Choose Car Insurance Based on Needs
All vehicles must be insured, under the law of Singapore, before they head out on road. It may as well be the foremost safety precaution when buying a car.
Nevertheless, the car insurance coverage in Singapore varies greatly, and it is important to make an informed decision based on the needs and budget. The easiest way to do this is to list all the things that need to be protected by the insurance policy and then find out which companies offer those features at the best price.
The most affordable insurance plan is the Third-Party Only (TPO) insurance coverage. This insurance covers damages caused by an accident where the third party is at fault. For example, liability insurance will pay for the victim’s injuries or damage to his/ her car.
This plan meets the minimum legal requirement to drive under Singapore law. If the used car in Singapore is purchased near the ten-year mark or by an experienced driver, this is the best option. Many insurers also offer add-ons for other costs, such as legal fees, with a TPO plan. In short, this is the most flexible, budget-friendly option for most motorists.
If a buyer requires more protection, Comprehensive Car Insurance can be the broadest option. Comprehensive coverage covers damage or loss due to fire, theft, vandalism and other situations not covered by regular collision coverage. This type of coverage is only extended to vehicles that are less than ten years old. Comprehensive coverage is ideal for people who intend to purchase a continental car, as their repairing services can be more expensive than popular Japanese car brands.
4. Search for Car Loans with Lower Interest Rate
The fourth budget-friendly tip for buying a used car in Singapore is to search for a loan with lower interest rates!
In Singapore, the car loan value is determined by the car’s Open Market Value (OMV). For cars with an OMV of up to $20,000 can borrow up to 70% of the purchase price. Whereas, cars with an OMV that exceeds $20,000 is limited to 60% of the purchase.
The easiest way to get a low-interest rate is to take out a bank loan. They are usually straightforward, without complicated terms and conditions. Additionally, the information is accessible and transparent over the internet, and the interest rates offered by various banks can be easily compared to choose the ideal option.
For instance, OCBC has car loans tailored specifically for electric cars that offer additional perks such as free charging. However, bank loans also assess other criteria, such as your monthly income, credit score and total debt servicing ratio. The loan payment cannot exceed more than 55% of the income.
Furthermore, when purchasing a used car in Singapore from a dealer, the process of applying for a bank loan is generally handled by the dealer. Although it is convenient but might limit the buyer’s choice to select a good interest rate.
It is a simple three-step process if you want to buy a used car in Singapore. After obtaining your license, you just need to do the following:
5. Look for Reputable Used Car Dealers
Finally, purchasing used cars in Singapore from dealerships instead of private sellers is above and beyond all other considerations.
When buying a used car, people are curious about its history and condition. For clearer information, it is recommended to find a reputable car dealer.
A private seller might not thoroughly inspect their vehicle before selling it; therefore, the vehicle’s condition and reliability can be questionable. The paperwork and loan-related information can be difficult to discuss comprehensively. They may not have the right knowledge of the necessary processes to register the vehicle and transfer ownership from one person to another!
On the contrary, buying a vehicle from a reputable used car dealer gives complete transparency. It reduces the hassle of choosing the right car; the dealer provides car listings to select the right make and model. Car dealers possess a team of professionals that inspect and detail the cars before selling, ensuring the selected vehicle is in good condition. Besides, their in-house team can handle all the paperwork and bank loans to make the buying process hassle-free.
Most importantly, a good dealer will facilitate the buyer throughout the paperwork and provide a great after-sales service. For instance, Car World Singapore offers customers a warranty of up to 8 months for their purchase. This gives customers peace of mind! Buyers can also test drive the used car before purchasing it.
To safeguard the interest when buying a used car, research about the car dealers. Often, past customers’ testimonials are the best references for knowing whether the dealer is trustworthy and cooperative. Car World has 67 reviews on Google rated five stars, which is a testament to the service and customer satisfaction that it strives to provide.
By engaging with the experts at Car World, people not just purchase their favourite vehicles but also gain insights into how could one perfectly maintain his/ her car to last long. Let Car World guide you smoothly through your journey today!