Should I buy a new or used car after circuit breaker?

honda civic fc with type-r bodykit

Civic FC with a Type-R Bodykit

If you’re in the market for a car, you probably can’t wait for the Circuit Breaker period to end.

Actually no, all of us can’t wait – no matter if we’re buying a car or not.

Anyway, you’ve probably seen the seemingly good deals promoted by car dealers to combat the slump in car sales during this period, since they can only sell cars online. One of many examples :

The price above is without COE by the way. Because if you can get a brand new Honda at that price WITH COE, then something is awfully wrong in Singapore.

Anyway, I think now is a good time to get a new car instead of a used one. Here’s why :

1. Most dealers (new and used) are going to sell their cars at good prices

Since dealers have overheads to cover even during CB – they will be looking to let go of their current cars to make way for the new cars that are coming in, and to cut their losses on the cars sitting idle for the past 2 months.

And when dealers want to let go of their cars fast – they will be dishing out good deals.

For example, you can try negotiating the price of a new car down to a level that was seemingly impossible before CB, or negotiate for better terms like extended warranty, freebies, higher overtrade etc.

bmw x4 steering wheel
BMW X4

2. Some new cars have similar or lower depre than used cars

You can find that this is the case in a number of new vs used cars of the same generation. Just look at the listings of these used 10th Gen FC Honda Civic 1.5 Turbo below :

11k depre fc honda civic singapore 2
Depreciation of used Honda Civics in Singapore
11k depre fc honda civic singapore 2

These used cars above have a depre of more than $10k/year, which is higher than the depre of a BRAND NEW Honda Civic 1.5 :

10k depre fc honda civic singapore
Depreciation of a brand new 2020 Honda Civic in Singapore

Since the new car has a depre lower than the new one, and it is priced very closely to the used cars, it would make more sense for car buyers to go for the new one.

You get a new car that you can use for 10 years, with a cheaper COE, not to mention the benefits of buying a car brand new.

The final price that you pay for the new car would also likely be lower than what is advertised here after promotions, discounts, overtrade etc.

Note: I’m not saying just because the depre is lower for a new car that you should go out and get one. Rather, it is something to consider when making your purchase decision. There are people who would still buy a used car even when the depreciation is higher than a new one. It all comes down to your needs and preferences

3. COE prices

All else being equal, generally COE supply has an inverse relationship with COE prices. When there is a huge supply, prices will drop and vice versa.

Car owners also may renew their COEs when prices are low. Likewise, low COEs also tend to attract more people to buy new cars.

However – remember that recently MAS announced that Singapore will enter a recession this year.

During these uncertain times, some people would be holding back their purchases especially on big-ticket items like a car.

In a nutshell, it is a mixed bag.

On one hand, COE prices are low – which makes buying a new car attractive. Yet at the same time, the market conditions aren’t that good, so people may also hold back on their purchases.

If you’ve been eyeing a new car, this could be the best time to get one. Low COE prices coupled with dealers eager to sell cars make it a buyer’s market.

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