COE prices have skyrocketed in recent weeks and it is not sensible to purchase a new car at the moment.
This article talks about why buying a used car is a good option with the current situation.
Higher Servicing Costs Will Not Exceed the Premium You are Paying for
New cars come with warranties and tend to break down lesser as compared to older cars. Used cars generally require more maintenance but they are usually simpler to fix because mechanics have gathered enough experience servicing older models and will be able to diagnose the problems faster.
Parts tend to be cheaper because they have been mass produced and achieved economies of scale. Compare the servicing costs with COE prices, you are certainly not paying more for servicing as opposed to the premium on COE prices.
Used Car Prices Are Stable
Dealers of used cars will certainly increase their prices with their used cars but it is not going to be that significant. The used car market is really competitive and dealers will be cautious with increasing their prices too much.
You Can Get Your Car Almost Immediately
The change of ownership for used cars can happen very quickly provided you have secured your financing. This is very different from buying a new car that need shipment and registration which typically take weeks or months for delivery.
Further Savings
If buy a COE car, you can opt to save even more by purchasing a Third-Party (TPO), or Third-Party, Fire And Theft (TPFT) insurance policy.
Comprehensive policies are expensive. It is typically mandated by the bank Typically, it is if you use financing.
Third-Party Only (TPO), or Third Party, Fire And Theft (TPFT) policies are designed to be more cost-effective, but with reduced coverage. These policies will only pay for damage caused to third parties - you’ll have to pay for your own damage out of your own pocket.
TPFT policies add coverage against Fire and Theft-related losses. Your premiums will vary based on the make and model of your car, its age, your age, whether you are entitled to an NCD, and even the excess amount (the higher the excess, the lower your premiums!).
The Choice Is Yours
Ultimately the choice of buying a new or used car is yours.
Used cars offer significant financial advantages over their brand new counterparts, if you get it from a reputable car dealer and with a comprehensive service history. Some luck is also involved in getting a good car.
Cars are a big-ticket purchase, and you should really work out just how much you are comfortable with. Also, do remember to factor in road tax, parking and fuel costs.
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