Brand New Car with Normal Loan<\/strong><\/p>\r\nLoan amount (Assuming OMV < $20 000, 60% loan): 60% x $108 888 = $65 332.80\r\n\r\nDown Payment: $43 555.20\r\n\r\nTotal Interest Paid: ($43 555 x 2.28%) \u00a0x 5 = $ 7 447.94<\/strong>\r\n\r\nTotal amount Paid: $65 332.80 + $ 7 447.94 = $ 72 780.74<\/strong>\r\n\r\nMonthly Installment: $72 770.74 \/ 60 = $1 213.00<\/strong>\r\n\r\n Brand New Car using leasing with a 5-year loan<\/strong><\/p>\r\nDown Payment(40%) :\u00a0$43 555.20\r\n\r\nLoan amount (Assuming OMV < $20 000, 60% loan): 60% x $108 888 = $65 332.80\r\n\r\nHowever, usually with leasing, they may only require you to pay 10%-20% of the down payment so assuming a 10% down payment\r\n\r\nActual Customer Down Payment (10%): $10,889<\/strong>\r\n\r\nDeferred Loan Amount (remaining 30%): $32,666<\/strong>\r\n\r\nTotal Loan Amount (Total interest payment + actual customer down payment and deferred loan): $97,999<\/strong>\r\n\r\nMonthly Installment: $1 415.54<\/strong>\r\n\r\n We looked into Balloon loan and inflated invoice in the previous episode of Scheme or Scam: Balloon Car loans and inflated invoice, today we will look into two other practices you can adopt to cope with the high cost of owning a car in Singapore – leasing and Overtrade. 1) What is leasing? Leasing is …<\/p>\n","protected":false},"author":2,"featured_media":1886,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[724],"tags":[],"class_list":["post-1473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-car-insurance-car-loans"],"_links":{"self":[{"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts\/1473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/comments?post=1473"}],"version-history":[{"count":1,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts\/1473\/revisions"}],"predecessor-version":[{"id":16139,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts\/1473\/revisions\/16139"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/media\/1886"}],"wp:attachment":[{"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/media?parent=1473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/categories?post=1473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/tags?post=1473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\r\n\r\nTherefore, leasing does not really lower the cost of purchasing a car. Yes, your total sum and monthly instalments are still higher. The main reason why people use leasing is that paying 40%-50% of the down payment is too much of a commitment for most people and thus they would opt for leasing which offers a lower down payment of 10%-20%.\r\n\r\nDo note that the calculation above is based on the fact that you buy a brand new car.\r\n\r\nThere are various forms of leasing like 5+5 where you take a 5-year lease\/loan and renew your loan after the 5 years for another 5 years. You can also choose to buy back the car after a few years, which depends on what the dealers offer you. You can also choose to lease for a shorter period of time, say 2 years.\r\nOther advantages of leasing<\/h2>\r\nApart from a lower down payment, most companies also offer to cover expenses such as road tax, insurance and vehicle maintenance. They even offer the use of another car while the leased car is being serviced.\r\n\r\nHowever, they will not be responsible for ERP charges, parking fees and any fines incurred during the duration of the lease. Another advantage is that you don't have to worry about depreciation and resale value since you technically do not own the car.\r\n\r\nAlso, if you are looking for short-term commitments, leasing is the choice for you. Honestly, you can change your car whenever you feel like it.\r\n
Lease to Own a Car!<\/h1>\r\nIf you are a private hire driver currently renting or leasing a car, Carro has a superb deal just for you. Carro's Lease to Own scheme offers a way for private hire drivers to own a car with no downpayment. The scheme requires you to lease a car for 1 year (at just $33 a day) and you will own it from the second year onwards. This allows private hire drivers to earn more and save more!\r\n\r\nInterested? Call Carro at 6714 6652 <\/b>today.\r\n
2) Over Trade<\/h1>\r\nAnother way to lower the loan amount is the overtrade option.\r\n\r\nFor instance, a $100,000 new car will require at least $40,000 as the downpayment. In overtrade, the seller will rise the car price to $110,000, and at the same time giving $10,000 more than what the trade-in car is worth.\u00a0Although the buyer now needs to put down $44,000 in downpayment, he will now have an additional $10,000 more from his trade-in, making his downpayment only $34,000.\r\n\r\nStill, to fully offset the heavy downpayment, sellers will need to inflate the price to a level that is much higher than the market price, and banks may not approve the loan.\r\n\r\nAlso, since the purchase price was artificially inflated, it means that the car loan amount has also increased. Using the illustration above, it has increased from $60,000 to $66,000. Assuming an interest rate of 2.28%, this means that the owner has to pay more each month over a 5-year tenure. This might be more than what the owner can afford.\r\n\r\nEven if the owner can afford it, it will also affect his Total Debt Servicing Ratio or TDSR. Remember that TDSR rules mean that Singaporeans won\u2019t be able to borrow more than 60% of their monthly income. By borrowing more, it can prevent the owner from buying her future house.\r\n
3. Always safer to go with these loans - Direct banks or even better Carro<\/h1>\r\nThis brings us close to the end of our series where we discuss the various car loans scheme offered. We hope that this series will enlighten you and help you make a wiser choice when buying your car.\r\n\r\nIf you're looking for a comprehensive loan package with 100% approval rate in just 24hrs, visit our sister company, Genie Financial Services<\/a> today!\r\n
People also liked:\r\n\r\n5 PAIN POINTS OF CAR OWNERSHIP FOR EXPATS IN SINGAPORE<\/a>\r\n4 WAYS CAR SUBSCRIPTION IS BETTER THAN CAR OWNERSHIP<\/a>\r\nPROS AND CONS OF CAR SUBSCRIPTIONS<\/a>\r\nWHAT\u2019S THE DIFFERENCE BETWEEN LEASING AND CAR SUBSCRIPTION?<\/a>\r\n<\/pre>","protected":false},"excerpt":{"rendered":"