{"id":343,"date":"2015-11-11T03:32:39","date_gmt":"2015-11-11T03:32:39","guid":{"rendered":"https:\/\/blog.carro.sg\/?p=343"},"modified":"2025-11-05T16:53:27","modified_gmt":"2025-11-05T08:53:27","slug":"buy-second-hand-car-singapore","status":"publish","type":"post","link":"https:\/\/carro.co\/sg\/blog\/buy-second-hand-car-singapore\/","title":{"rendered":"Beep Guide: Buying Used Cars"},"content":{"rendered":"Despite the vulgar price that cars in Singapore have, plenty of Singaporeans still want to purchase their very own set of wheels. You might think that our world-class public transportation would be the most efficient way of daily travelling, but this does not stop several others from wanting to get their own car. Here's a look at how much you would need to save monthly if you're looking into buying a used car since it's the cheaper option as compared to purchasing a brand new vehicle.<\/span>\r\n\r\nFor illustration purposes, let\u2019s just focus on a 5-year-old Toyota Corolla Altis 1.6A.<\/span> It\u2019s the most popular car model in Singapore, mainly because it\u2019s built to last and ridiculously fuel efficient. You can expect to pay at least $70,000 for one that doesn\u2019t look like it belongs in went through a zombie apocalypse.\r\n\r\nIn order to ensure the lowest downpayment, you want to be able to qualify for the maximum loan in terms of largest amount and longest tenure. That means your car\u2019s Applicable Open Market Value (OMV) needs to be $20,000 or less (in order to qualify for a loan of 60% of the car price). The older the vehicle, the lower the Applicable OMV probably is, but it\u2019s always a good idea to check.\r\n

1. Income requirement for the loan<\/strong><\/h2>\r\nTo qualify for a car\u00a0loan, your monthly\u00a0instalment should not exceed\u00a01\/3 your monthly salary. To get the maximum loan possible of 60%\u00a0of the car price, you should go\u00a0for the maximum tenure of 5 years. (Do note that the maximum tenure is dependent on the number of months left on the COE, capped at 5 years.)\r\n\r\nAssuming the car price is $70,000, the maximum loan you can get is $42,000. Let\u2019s assume\u00a0the car loan interest is 2.8%. Over 5 years, that means a monthly instalment rate of $798. Therefore, to qualify for the loan, you need a minimum monthly income of at least $2394.\r\n\r\nIf you\u2019re earning that much, don\u2019t rejoice yet. There\u2019s a lot more to worry about than just paying $798 each month.\r\n\r\nMonthly expenditure:<\/strong> $798<\/span>\r\n

2. Downpayment<\/strong><\/h2>\r\nThe minimum down payment of a car depends on the difference between the car\u2019s price and the loan amount mentioned above. Assuming your Applicable OMV is $20,000 or less, your loan amount is 60% of the car price. That means your down payment is 40% of the car price. You also have to pay an LTA transfer fee of $11.\r\n\r\nUsing the same example above, the\u00a0car price is $70,000, so your downpayment is $28,000. The LTA transfer fee is $11. Since you have to pay your 1st-month instalment at the same time with\u00a0your initial payment, that\u2019s a total of $28,809 you have to come up with as soon as you sign on the dotted line. So make sure you have that amount ready.\r\n\r\nAmount to be paid upfront: <\/strong>$28,809<\/span>\r\n

3. Insurance<\/strong><\/h2>\r\nAccording to\u00a0Singapore law, car insurance with 3rd party coverage is mandatory. When it comes to\u00a0using a car loan to purchase a car, the financial institution you borrow from may have stricter requirements for car insurance coverage. For example, they may demand 3rd party,\u00a0fire and theft car insurance, or even comprehensive policies.\r\n\r\nHow much will this insurance cost you? Well, that depends on you.\u00a0There are several factors that determine how much you pay per year. The main factor? Whether you\u2019ve managed to\u00a0find the best car insurance for yourself. Use\u00a0comparisons\u00a0to make sure you\u2019re not paying more than you have to. Still, expect your insurance to come up to about $1,200\u2026 at least. This amount has to be paid upfront and in full, and your insurer will issue you a cover note.\r\n\r\nMake sure the insurance policy is already in force when you purchase the vehicle and covers the full period of the vehicle\u2019s road tax.\r\n\r\nAmount to be paid upfront:<\/strong> $1,200<\/span>\r\n

4. Road tax<\/strong><\/h2>\r\nSpeaking of road tax, make sure to check if your vehicle requires inspection prior to the renewal of your road tax. For cars that are older than 3 years, it is compulsory to\u00a0have\u00a0annual car inspections. Sometimes, the second-hand\u00a0car comes with a few months of road tax still valid. But you\u2019re still going to have to pay it sooner or later. For the Toyota Corolla Altis mentioned earlier, since it\u2019s a 5-year-old 1598cc car, the road tax should be $742 for a 12-month renewal.\r\n\r\nAmount to be paid upfront:<\/strong> $742\r\n

5. Maintenance fund<\/strong><\/h2>\r\nWhen buying a second-hand\u00a0car, always check the mileage and how well the previous owner(s) have maintained it. It\u2019s probably a good idea to check the car\u2019s maintenance log (and panic if there isn\u2019t one!) and get a certified mechanic to look it over before handing over cash.\r\n\r\nDepending on the car's mileage, you can probably expect to be replacing some parts. And even if you don\u2019t have to replace any parts, you\u00a0still the need to change the oil, check tyres, flush the air-con and top up brake fluid on a yearly basis.\r\n\r\nSay\u00a0your second-hand\u00a0car is, miraculously, in the best of conditions. You should still expect your maintenance and servicing costs to set you back by, on average, at least $360 a year.\r\n\r\nMonthly expenditure: <\/strong>$30\r\n

6) Petrol<\/strong><\/h2>\r\nWhether a new or second-hand car, it\u2019s going to need petrol. Even if you\u2019re not paying top dollar for Shell V-Power, your petrol bill\u2019s still going to come to about $200 a month. Okay, fine, if you use the best credit card for petrol you might be able to knock that down to about $180 a month.\r\n\r\nMonthly expenditure: <\/strong>$180\r\n\r\nSo, what\u2019s the total damage when buying a second-hand car?<\/strong>\r\n\r\nYou\u2019ve seen the numbers, let\u2019s do the math. First, we find out how much we need to save each month even before we can think of buying a second-hand\u00a0car. Are you ready for this?\r\n\r\nAmount you have to pay upfront when buying a second-hand\u00a0car:<\/strong>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Purpose<\/strong><\/td>\r\nAmount<\/strong><\/td>\r\n<\/tr>\r\n
Downpayment<\/td>\r\n$28,809<\/td>\r\n<\/tr>\r\n
Insurance<\/td>\r\n$1,200<\/td>\r\n<\/tr>\r\n
Road Tax<\/td>\r\n$742<\/td>\r\n<\/tr>\r\n
TOTAL<\/strong><\/td>\r\n$30,751<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\u00a0<\/strong>\r\n\r\nWhat\u00a0if you don\u2019t already have $30,751<\/strong>\u00a0in cash? That means you will need to start saving $2,562.58 a month for a year. Oh, wait, you don\u2019t even take home that much salary a month. Okay, how about we say\u00a0$1,025.03<\/strong>\u00a0each month for the next 2.5<\/strong> years before you can think of affording a second-hand car (at today\u2019s prices).\r\n\r\nTotal monthly expenditure after buying a car:<\/strong>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Purpose<\/strong><\/td>\r\nAmount<\/strong><\/td>\r\n<\/tr>\r\n
Car loan instalment<\/td>\r\n$798<\/td>\r\n<\/tr>\r\n
Maintenance Fund<\/td>\r\n$30<\/td>\r\n<\/tr>\r\n
Petrol<\/td>\r\n$180<\/td>\r\n<\/tr>\r\n
TOTAL<\/strong><\/td>\r\n$1008<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\nSo, now that you\u2019ve managed to save $1,025.03 a month for 2.5 years, you should have no problem paying at least\u00a0$1008<\/strong>\u00a0each month for the next 5<\/strong> years till your second-hand\u00a0car is fully paid off. And scrapped. Just imagine \u2013 you need to set aside more than $1,000 each month for 7.5 years just for the convenience of a second-hand\u00a0car\u00a0that you\u2019ll use for only 5 years.","protected":false},"excerpt":{"rendered":"

Despite the vulgar price that cars in Singapore have, plenty of Singaporeans still want to purchase their very own set of wheels. You might think that our world-class public transportation would be the most efficient way of daily travelling, but this does not stop several others from wanting to get their own car. Here’s a …<\/p>\n","protected":false},"author":2,"featured_media":3203,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[721],"tags":[59,212,104,206,213,62,70],"class_list":["post-343","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-car-buying-tips","tag-car","tag-month","tag-price","tag-save","tag-second-hand","tag-singapore","tag-used-car"],"_links":{"self":[{"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts\/343","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=343"}],"version-history":[{"count":2,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts\/343\/revisions"}],"predecessor-version":[{"id":14713,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/posts\/343\/revisions\/14713"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/media\/3203"}],"wp:attachment":[{"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/media?parent=343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/categories?post=343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carro.co\/sg\/blog\/wp-json\/wp\/v2\/tags?post=343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}