Letting go of a car usually comes down to the owners’ preference and financial means. But in Singapore, where car ownership costs you an arm and a leg (and more), there are other factors that can help you determine when you should sell your car.
One of the key important reasons for selling your car is to get a new one, and that is majorly dependent on the Certificate of Entitlement (COE) prices. The other reasons revolve around your needs and of course, the state of your car.
Let’s take a closer look at the best reasons to sell your car.
1. Lower COE Premiums = Lower Cost of Ownership
The main reason behind Singapore’s sky-high cost of owning a car is… COE premiums. At its highest, COE premiums have reached up to S$98,000. In 2019, the COE prices had gone up and down the range of $26,000 to $36,000 for Cat A cars, a full $10,000 difference. This fluctuation is what car owners will take note of before they decide whether or not to take advantage of lower premiums and sell the old car.
As at May 2020, COE bidding has been suspended in light of Circuit Breaker and there is no current update on when the activity will resume. Post-Circuit Breaker might result in lower premiums, as predicted by Carbuyer SG.
2. The Rebate Factor
When you deregister your car before your COE expires, you are entitled to the PARF rebate. If you deregister your car in the first 5 years, you can get up to 75% of your COE value back. With each additional year after this 5-year period, the PARF rebate value will decrease.
The allure of a significant rebate is sometimes a good reason to sell your car, especially if having a car is no longer necessary. So, if your car is within this 5-year period and you no longer need it, now is an excellent time to let go of your old car.
3. Excessive Maintenance Costs
Maintenance costs contribute a significant amount to your car ownership costs. And as the costs accumulate, it can be a deciding factor in whether you should sell your car. If maintenance costs are high and you’re unable to keep up, it might be time for you to let go of your car and find something that’s more reliable. There’s also the case of getting a brand-new car that costs a lot to maintain, making it not worth holding on to.
To help you find out if your car is worth keeping, simply add up all the costs of maintenance VS the cost of keeping your car. Your maintenance costs should not exceed 20% of the cost of keeping your car. If it does exceed 20%, then you should seriously consider letting go of your car.
4. A Pressing Need
Our needs change at different stages of our lives. The same goes for your choice of car. From when you’re single and looking for a stylish ride to when you become a parent and need something more functional. Your needs will change.
If you’re making a transition from singlehood to married life, expecting a baby and just need more space – it’s a perfect time to let go of your old ride and move on to something that better suits your needs.
5. Need an Upgrade?
When your car is causing a lot of problems, you obviously need to upgrade to a new one. But car problems are not the only reason for an upgrade.
In a country where social status and ‘face’ matters a lot, selling your old ride can mean so much more than what’s on the surface. Especially in Singapore, where car ownership seems to be more than just for functionality and convenience.
As you progress financially, your material possessions tend to progress too. So naturally, sooner rather than later, you’ll need to upgrade your car to fit your status.
Your Reasons to Sell Your Car
Ultimately, the final decision to sell your car is yours and yours alone. You should have a thorough financial plan before making the decision to trade in your old car. No matter what your reasons are for selling your car, it’s essential you make a plan and choose the best way to go about doing it.