Should you buy a used car in Singapore?

CarBuyer Team


new vs used

Second-hand, used, pre-owned… whatever you call it, it’ll be cheaper than a new car, right? That’s not the whole picture, though. Here’s some first-hand advice on how to avoid second-hand pain!

SINGAPORE — It’s time. You’ve saved up enough to buy yourself, or your family, a set of wheels. Time to hit all the showrooms and gather brochures, then enjoy the new car smell and increased swag. Okay maybe not the swag.

First off, read our simple guide to perplexing car acronyms endemic to Singapore. You’ll feel enlightened after, but the next question is, just the same as if for any major, grin-inducing purchase – should I buy new or used?

The answer is simple: If you want to pay a smaller sticker price, buy a used car. There’s no getting around that fact — like for like, used cars cost less and sometimes can be found in very good condition.

But here are three things you need to think about before you sign on the dotted line for a car, be it new or pre-owned.

Firstly — In appreciation of depreciation… 
Here’s the mind-blowing fact that every Singapore car buyer needs to know: sometimes a second-hand car can actually be more expensive than the same car new! We’ll let that sink in for a bit…

How does that work? In a word, Depreciation.

Because of the Certificates of Entitlement (COE) system that keeps Singapore from turning into a giant pot of jam (durian jam, presumably), we own our cars for 10-year blocks of time. There’s also a PARF rebate system that guarantess you a certain amount of cash back if you de-register your car within those 10 years.

Accordingly, there is a definite, calculatable amount you expend per annum as a car owner, and that’s the Depreciation. It’s a separate issue from the actual value of the car alone, which also lessens over time, i.e. normal depreciation of a normal consumer good.

Naturally, the Singaporean system is one in which you know exactly how much you’ll get back at the end of it at a minimum — not something you can say about selling a second hand car abroad.

So, Singaporean Depreciation is calculated by the total cost of the car minus the PARF rebate and remaining COE value (the money you get back at the end of ownership if you scrap the car) divided by the years of ownership.  If you own a car there’s a handy online calculator for PARF.

What’s this gotta do with new or used cars? Well, in past years with crazy COE prices, that means some used cars might have a higher depreciation than new cars.

For example, the Platonic Ideal of a normal car, the Toyota Corolla Altis, costs $107,888 with COE in March 2016. Given its PARF rebate value at the end of 10 years, it has an annual depreciation of $9,900.

The same model (or nameplate at least — the latest Corolla is a totally new car) from 2011 now costs about $67,000 second-hand, but has a depreciation of nearly $11,100 per year.

Which means that by the time 2021 rolled around, you would have lost about $5,000 more on the second-hand car.

So let’s get this straight: you can buy a new car that’s fresh off the boat, with a shiny new engine under the bonnet and seats that no one has broken wind on or anything… and pay less every year for it than for used car.

New Used

There’s your classic no-brainer. But as they say on TV, that’s not all…

Secondly — Used and New costs differ hugely
Between pre-owned and new cars, that is. For example, both new and used cars face the same MAS loan restrictions but interests rates differ between them and used car loans typically have higher interest rates. Local banks quote between 2.28 to 2.78 percent for new and 2.98 percent for used car loans.

For a $60,000 loan over five years, that would make the second-hand car’s loan $2,100 more expensive, or $6,840 versus $8,940.

There are other costs too: Road tax for older cars is higher (if they are more than 10 years old), but insurance premiums are typically lower for older cars because they’re worth less if they’re totalled. The key thing to note is that if you’re buying used, you need to be extra careful of other costs which might add up and define a point beyond which it’s better to buy new.

Thirdly — Warranties and Maintenance
A second hand car might be a good buy if it’s less than five years old. Why? Assuming it’s purchased from and serviced by an authorised dealer, if anything goes pear shaped, you’ll have an official manufacturer’s warranty to help you out.

It’s important to avoid a lemon (even kids know that), but just think of a comprehensive warranty as sugar that can take away the sour taste.

Suppose a car came with a five-year warranty when it was new, and you’re buying that car after three years — that leaves you two years of worry-free ownership. If mechanical problems come up, they’ll be fixed because warranties are transferable.

If on the other hand, the second hand car in question doesn’t have an official service record, or wasn’t from a proper dealer to begin with, then you open yourself up to the risk of paying for mechnical trouble. That might turn out to be expensive.

Though big mechanical failures are very rare as most modern cars are very reliable, it’s a risk one has to be aware of.  

But wait, there’s more!
I know we said three points but the last is too important to leave out. There’s a third option which has many of the pros of buying used, but minus the cons.

Authorised pre-owned dealerships can give you a good balance between the two — that’s when you buy a second-hand car from a trustworthy and properly set-up dealership, usually a new car dealer.

It can cost slightly more than an ‘in the wild’ second hand car, but lots of the major risks are mitigated.  

One example is Toyota Certified Pre-Owned (TCPO) cars. A pre-owned car bought from TCPO has a fully valid five-year unlimited mileage warranty (counting from the date of original purchase). Each car also undergoes a quality assurance inspection, includes a year of free servicing and has 24-hour roadside assistance.

Now that you know, you can go ahead and do your happy buy-a-new-car homework and have little risk of bei
ng taken for a noob ride like the one below.

But whether you eventually go down the new or second-hand route, just try to keep one thing in mind: buying and owning a car should be fun, and finding the right set of wheels is all about inviting joy to your life.




8 Acronyms Every Singapore Car Buyer Should Know

drivehappy with toyota singapore





drivehappy second hand Toyota used

About the Author

CarBuyer Team

CarBuyer Singapore brings the most relevant, accurate and useful car news to Singaporeans in both print and online formats.

3 thoughts on “Should you buy a used car in Singapore?”

  1. Hanson Chen says:

    Hi Editor,

    Hope this email finds you well. My name is Hanson, a SEO Executive at Tug Agency and we are currently working with Budget Direct Singapore.

    I’ve just finished reading your article titled Should you buy a used car in Singapore? located here and wanted to let you know about an amazing piece of content that Budget Direct Singapore has published that is highly relevant to your existing content and would add a new valuable element to the piece.

    You can find the article here: It provides a super in-depth and thorough analysis of the underlying reasons for why cars are so expensive in Singapore and what to expect when choosing to buy a car here. In particular, a super useful table showcasing how the price of a car in Singapore stacks up compared to other countries has been created.

    ‘Can you believe that a Toyota Corolla in Singapore will have an MSRP of $120 888 in 2022!”

    I believe this information provided would definitely be of interest to your audience and perfectly complement what you already have.

    Please feel free to include ANY of these findings (images, tables, charts, etc.) in your article as a resource for your readers without any fee or charge. In particular, I believe the table outlining how Singapore car prices stack up against other countries will be a great add-on to your already awesome piece.

    Our only request is that you reference the source to

    Let me know if this is something you would be interested in.

    Thanks so much for your time and I look forward to hearing back from you!

    Kind Regards,
    Hanson Chen

  2. Hanson Chen says:

    Hi Editorial Team,

    First, sorry for bothering you! I totally know how annoying these emails are which is why I pledge to stop contacting you if you aren’t interested.

    I am just following up on my previous email regarding a potential linking opportunity to

    As per my previous correspondence, we feel that the content we highlighted would definitely add value to your already great piece of content and be of interest to your readers, we wanted to get your thoughts on this.

    Finally, could you confirm that I am reaching out to the right address / person for this inquiry, or if there is another member of the team who I should contact?

    I look forward to your reply and wish you a blessed day!

    Hanson Chen

  3. Hanson Chen says:

    Kindly following up on the email below.

    Please could you confirm that I am reaching out to the right [address/person] for this enquiry, or if there is another member of the team who I should contact?

    Many thanks,
    Hanson Chen

Leave a Reply

Your email address will not be published.

CarBuyer – Revolutionizing The Online Car Marketplace In Singapore

Buy Used And New Cars Online
Start your car buying journey with CarBuyer as we connect you seamlessly to the industry’s best CaseTrust-SVTA accredited car dealerships. As a one stop car online portal you can now buy your new ride, be it a pre-owned car or a brand new car from trusted dealers all over Singapore, all in one place. Our ever expanding listing of quality and covet-worthy cars, new and second hand, from both owners and trusted car dealers, will leave you spoilt for choice. Refine your search by vehicle type, registration year, price, mileage, engine type, transmission, annual depreciation value and more to find the car that best suits your needs, taste and lifestyle. You can even search for your car by dealer or directly by owner.

Sell Your Car In An Instant With Confidence
We all know how selling a car in Singapore can be a daunting task especially for a first time car seller; from trying to get a valuation for your car, finding a trusted dealer, to getting the best quote on your vehicle. CarBuyer understands the hassle and even the costs involved and have as such partnered with Huawei to develop a FIRST in Southeast Asia AI car valuation tool that is able to provide a car’s resale value at the snap of a finger. Backed with a consortium of trusted CaseTrust-SVTA accredited car dealers you can be assured that you are getting the best price for your vehicle and do not have to worry about any hidden costs.

The Ultimate Car Shopping Experience Online
CarBuyer platform is the first of its kind to be backed by Huawei’s Artificial Intelligence and cloud computing, enabling it to be able to offer users transparency and enhanced security, all with the one aim of enhancing customer experience. So come on over to buy and sell used cars online at the best prices at CarBuyer Singapore. Connect easily with dealers in real-time via our online video call feature, or schedule a test drive when you’re ready. Have some questions? Get them answered instantly with our chatbot moderated by our responsive team. Stay in the loop with our car-related tips, reviews and news. Learn the ins-and-outs of your car, as well as global and Singapore’s car updates at your own pace.