Singapore Profit

I’ve got a good bonus recently, and I’m itching to change my 4 and a half year old car. The rubber in front that protects the car engine has dropped, and I have no time to get that fixed. Interestingly, my father says the car owner who has the exact same colour and model as me at the same block faces the same problem too. When I went to check, the same rubber tubing is sagging too.

The car dealers tell me that once my car is over 5 years old, the value will fall dramatically and thus told me to change. I’m not sure whether they just want to make money or they are really ‘kind’ enough to warn me. My previous agent told me not to change since I will face a big loss, but that was one or two years ago.

One way to check how much your vehicle can fetch is to look at the PARF Rebate Amount and the COE Rebate Amount. You can try different intended de-registration dates in order to see the depreciating value. You can go to onemotoring.com.sg to check your value.

One reason why I did not change my car earlier is that the loan amount was way higher than what my car would fetch, but when I just checked the amount again, I only need to top up $2000 plus to clear my car loan.

However, considering that the car is a depreciating asset (in accounting terms) but a liability in wealth creation terms, is there a need for me to change cars?

If I sell my car now, it means that I have spent more than $10000 per year on it. There is no recovering of such a loss. I would need to put down another sum of money to bring down the loan repayment period. I will not take another 10-year loan for an automobile anymore because the period for minimising loss is too long.

I’m actually eyeing a selfish but extremely cute car, the Daihatsu Copen, which fulfils my wish for a sports car lookalike without the fuel-thirsty engines. This car is supposed to be extremely efficient by reaching 18km per litre, compared to my current 13-14km per litre. However, it doesn’t make financial sense to own this for a short period of time before we start a family and thus changing to a sedan again. Unless it is a second car, which makes sense as it is a two-seater, but having a second car is even more money wasting.

The other car is a Toyota Vios which is cheaper than my current car, but I think the engine is loud during the test drive. What’s nice is the free sports bodykit. Apart from this, I’m a Honda lover. My family has had 5 Hondas since we started buying cars.

In the end, I decided to plonk that fat bonus into another investment plan, known as Landbanking. More on that another time.

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