Open the newspapers today and it’s all about cars. First-timers can’t afford cars, car calculations, car history, exploding car (Ferrari exploded in Teban Gardens)
What’s interesting is that there are ways to drive a car, even a sports car, without owning it. BT reports that leasing is back in vogue and will be even more popular. So instead of putting 50 per cent cash down for a new car in the hope of finally owning it, why not just pay “rent’’ every month and the car returns to the leasing company when the lease is up. A German full-sized sedan costing about $340,000 will require a $170,000 cash down, with monthly instalments of about $3,100 over the newly imposed five-year tenure. But it can be leased for between $5,500 and $7,200 a month over four years, BT helpfully reported. Then the car goes back to the leasing company.
What about leasing a Porsche? You can do that too, provided you put down a cash deposit (at $83,000 for a Porsche Cayenne). You pay about $3,000 a month. After two years, the company will buy the car back from you – at 40 to 50 per cent of market value.
Leasing rates have gone up over the years apparently, so you’d better be getting a move on if you want your butt on the driving seat, although I wonder how many Porsche drivers will admit to having their supercar on a lease…But I guess it’s better than wearing a fake Rolex.
Then over in ST is another story about how an online car rental portal that is just 15 months old is doing big business. It gives the driver access to about 30 car rental companies, so you just click, pay and then drive. The article doesn’t tell you how much it costs to rent a car though, except that the business is about $400 to $500 yearly.
I was tempted at first to view these articles as puff pieces or free ads for the companies but they do serve a function. These stories serve the information needs of the time-deprived reader. They tell about options.
As usual, ST correspondent Chris Tan does a brilliant job of putting out a chart on what the OMV, ARF etc of different makes of cars will be under the new regime. There’s even a bit of interesting history to put things in perspective: Between 1983 and 1990, all cars were subject to a flat 175 per cent ARF, which means a Rolls Royce Phantom would incur ARF of $1.16 million, a BMW 520i would be taxed at $72,000 and a Toyota Camry at $41,000.
Back then, luxury car buyers complained that the tax was unfair to them. Hmmm.
Under the new tiered system, that Phantom would incur ARF of $1million. So luxury car buyers are hit but not as bad as they were in the past.
Chris Tan is complemented online by a commentator who breaks down the numbers even further, a most helpful tool to understand what a car buyer is really paying for. Go look at http://www.breakfastnetwork.sg and get the link.
I was waiting to see another aspect of the car business being reported – the used car market. With new cars shifting into reverse gear, the used car business must be looking forward to accelerating. Time to trade in my car for a used one?
Then I read in today’s Today that they had worries too, particularly on loan curbs imposed by the G. The Singapore Vehicle Traders Association (SVTA) has appealed to the MAS and the Ministry of Trade and Industry (MTI), not to apply the new measures “so strictly” to loans for buying used cars.
SVTA President Neo Tiam Ting said: “Used cars are already in the system, there is no need to tighten their supply if one of the reasons for this move is to curb the high COE (Certificate of Entitlement) premiums.”
In any case, just like “cooling measures’’ for property, it seems that aspiring car owners can still exploit some loopholes – like going to unregulated finance or credit companies for a loan. Doubtless, they will be plugged.
More on http://www.breakfastnetwork.sg :
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– What the global media think about Singapore’s Budget 2013