645ci - Underpriced in Singapore?

[oliie]

Hi all!

I'm currently in the market for a car (should be 4 or 5 door but ignoring that for a second...) and was browsing sgcarmart all day today.

I came across a few 645cis being sold at around 180k for a 2004 car.

These cars have a 30k COE and a 95k OMV. This means that their depreciation is (180-30-95)/6 ... or just ~9k a year! This means that, road tax / fuel aside, they are better depreciating than quite a few alternatives. And you're getting a great car to boot.

Is this sound logic or is my lack of Singapore COE / OMV knowledge showing?(!)

Cheers
Oliie

 

[Puny]

Re: 645ci - Underpriced in Singapore?

These cars have a 30k COE and a 95k OMV. This means that their depreciation is (180-30-95)/6 ... or just ~9k a year! This means that, road tax / fuel aside, they are better depreciating than quite a few alternatives. And you're getting a great car to boot.
Is this sound logic or is my lack of Singapore COE / OMV knowledge showing?(!)

Hi Oliie,

There are some corrections to be made in your calculation:

• COE is pro-rated by day. If the car is exactly 4yrs old, the remaining COE is $18K
• If the car is after March 2004, the 10th year PARF rebate should be 55% of OMV (50% x ARF), which means the residual PARF is $52K
  (Reference: LTA: Vehicle Tax Structure)

Which means, the linear annual depreciation of the car is:
$180K - 18K - 52K = $110K over 6 years. That works out to $18.3K/year depreciation.

 

[oliie]

Re: 645ci - Underpriced in Singapore?

Ahhh... thanks for that! Singapore's car tax structure is complicated to say the least...

A bit more practice and hopefully I'll get the hang of it! It is just so hard to spot bargains in the market like you can in the UK where a simple cheap buy and higher re-sell mean you make money. Oh well.

 

[Singapore Brummie]

Re: 645ci - Underpriced in Singapore?

Hi Oliie,

There are some corrections to be made in your calculation:

• COE is pro-rated by day. If the car is exactly 4yrs old, the remaining COE is $18K
• If the car is after March 2004, the 10th year PARF rebate should be 55% of OMV (50% x ARF), which means the residual PARF is $52K
  (Reference: LTA: Vehicle Tax Structure)

Which means, the linear annual depreciation of the car is:
$180K - 18K - 52K = $110K over 6 years. That works out to $18.3K/year depreciation.

Actually, I think you will find that the depreciation per year calculation includes the cost of the COE.

In your case, the $180k 645 will be worth just $52k at the end of its 10 year lifespan (before you have to buy a new COE), so the depreciation is $180 - $52 = $128k divided by 6 years or $21.3k per year.

Be careful, depreciation numbers quoted by dealers is based on you keeping the car to the end of the 10th year. In reality, depreciation is much higher in the first couple of years of ownership

 

[Puny]

Re: 645ci - Underpriced in Singapore?

Actually, I think you will find that the depreciation per year calculation includes the cost of the COE.

In your case, the $180k 645 will be worth just $52k at the end of its 10 year lifespan (before you have to buy a new COE), so the depreciation is $180 - $52 = $128k divided by 6 years or $21.3k per year.

Singapore Brummie,
My mistake, you are correct!.
I was thinking about the paper value at it's 4th year for the COE, but PARF at 10th year. Oliie, please use Singapore Brummie's calculation as reference instead.

 

[centurion]

Re: 645ci - Underpriced in Singapore?

with the depreciation peaking in the first 3 years, I'd say that the 645 is a good buy now. In fact, anything with a bigger engine than the base model is a good buy now.

 

[Racebred]

Re: 645ci - Underpriced in Singapore?

what about factoring in body value?

 

[Singapore Brummie]

Re: 645ci - Underpriced in Singapore?

what about factoring in body value?

Body value at the end of 10 years is an unknown variable, so depreciatiuon numbers used by the dealers (and replicated above) is a worst case scenario. I think the body value is worked into the equation only when the car is being scrapped before its 10th birthday and exported with a paper value plus scrap (body) value.

I tend to look at the paper value at the end of the 5th year (plus body value) as this is a good indication of what depreciation you will take in the shorts if you sell before the 10th year.

With lower percentage OMV rebates from year 5 onwards (unlike the 130% of OMV at year 5 in the past), depreciation hits seem to be even higher these days, so the initial cost of buying a car has come down, but overall, the cost of owning seems to have increased - just my perception perhaps.