Buying a used car: What you need to know about owning a second hand car
For many, a second hand car is an extremely responsible choice. New cars are expensive and they can lose as much as 20% of their value just leaving the lot you purchase it from. Buying a used car means paying a lot less for a similar asset; a vehicle that gets you from A to B. When you’re in the market for a used vehicle in Singapore, here are some essential tips from car insurance broker Kwiksure Singapore that you need to know.
Why buy a second hand car over a brand new one?
Cost is always one of the obvious reasons people choose a used vehicle over a new one. It’s not just on the sales tag where money can be saved though. Here are are a number of ways buying a used car can save you money:
- Depreciation is minimized for a second hand car
- Cars can last a long time when taken care of, reducing your need to constantly upgrade
- Better, more reliable and fuel efficient vehicles will also be cheaper secondhand when you are ready to move onto a new vehicle later
- Insurance can be cheaper for used cars as their value is much lower
Having said that, there is a need to weigh up the downsides to buying a second hand car. Used cars can come with a SGD 10,000 registration fee and sometimes their older age can mean you end up spending more on maintenance and repairs than you would with a new car.
When you’re considering what’s right for you, it pays to be clear about your options and what the expected costs will be. If you’re set on buying a used car, then here’s what you should keep in mind:
1. What is the car’s condition?
A car that looks clean and polished on the inside doesn’t necessarily mean it will be the same inside and under the hood. With second hand cars, inspecting every inch of the vehicle is even more important than when you buy a new car – new vehicles will generally come with a warranty in which you can return it back to the dealership or manufacturer for a free repair.
This often isn’t the case with used vehicles, particularly those sold in private sales. With any used car you should take it to a mechanic or used car inspection service to get a detailed assessment of how well-maintained your prospective new purchased will be. If it’s in bad shape, you might find yourself forking out more for maintenance and repairs.
2. When is the road tax due?
Everyone pays road tax once a year and the charge is attributed to the car – not the driver. You’ll want to make sure you find out the road tax date and get confirmation that it has been paid before buying a used car. Forgetting this can mean being hit with an extra, hidden added cost on top of the price you paid to buy the used vehicle.
3. How old is the vehicle?
The age is important for two reasons. The first is that it can give you an indication of the condition of the vehicle prior to getting it inspected properly. The second is that older vehicles can come up for an additional renewal fee when it reaches ten years from the date of its first registration.
The Preferential Additional Registration Fee (PARF) rebate applies to owners who opt to deregister their vehicle before it reaches the 10 year mark. These drivers can receive some of the value of their vehicle back by doing so. Choosing to continue driving a vehicle over 10 years old puts it into the category of vehicles that have had their Certificate of Entitlement (COE) renewed.
COE cars receive a lot less back when their cars are deregistered, while PARF cars will generally cost a bit more depending on how much time is left to claim the rebate. Check the first registration rate of a second hand car to make sure you know where you might stand in terms of the PARF and COE laws.
4. Get a history report
A history report will tell you about the number of owners, whether or not it has been in any serious accidents before, and whether the title is clean. It’s absolutely worth paying for a vehicle history report if you’re not offered one for free from a car dealer. Buying a used car without one is akin to choosing a vehicle blind – you won’t truly know what you’re getting until it’s too late.
5. Go on a test drive
Finally, there’s no better way to get a feel for the vehicle you might buy than by taking it for a spin. Be wary of any private seller or second hand car dealer that won’t let you. In a test drive, you’ll want to turn off the radio and have a listen to the engine and breaks as you drive, feel whether or not there is any pull to one side in the steering wheel, test all of the buttons and switches to make sure they work.
Car insurance when buying a used car in Singapore
When it comes to car insurance, there are no special or specific policies for a second hand car. You’ll be purchasing the exact same plan you would be had you purchased a new one instead. The cost of that insurance can still change, however, depending on your new vehicle. Cheaper cars cost less to insure, while some older vehicles with high kilometres can also see your premiums affected.
What’s really important is that you find the right type of car insurance for your needs. Owning a used car means being aware of all the risks that are involved with non-new vehicles, and insurance can help you protect yourself. Kwiksure Singapore has a range of third-party and comprehensive insurance policies that can meet any needs you have as a Singaporean driver.
Before buying a used car, contact the team at Kwiksure Singapore today!