On a budget but looking for a ride to help you get around? Buying a used car might be a great idea for those with tighter pockets, here are some financial aspects to add to your checklist when buying a used car.
Price
Most used cars would fetch a lower price than brand new ones – making it great for those working with a budget. However, if you’re taking up a car loan; keep in mind the interest rate of the loan that you’ll be taking up. You should also consider the monthly installments into your expenses to ensure you have enough cash flow each month.
Depreciation
The value of a car can decrease up to 20% each year. In Singapore, depreciation rates for used cars may be steeper for higher end cars with larger COE premiums.
Maintenance
One of the biggest concerns for buying a used car would be the maintenance fees. Older cars might require more attention in its upkeep, keep in mind the added cost of repairs, replacement of old parts, and even additional servicing fees.
Road Tax & Insurance
Car insurance premiums will generally increase with the age of the car. Likewise, road tax for cars older than 10 years (in Singapore) might cost more too. Include such fees and premiums into your budget before buying a used car.
Ease of Mind
Purchasing a used car from a marketplace might mean you wouldn’t know its complete history. Bring along a checklist for all the physical aspects to scrutinise. Alternatively, engaging a reliable dealer might help you to better assess the condition of the car for added peace of mind.
