Looking to buy a car in Singapore? If this is your first time, you will be thrown a bunch of acronyms and terms that are truly unique to Singapore.
It is important that you understand our local car sales lingo to avoid making the wrong decisions while shopping for your next car. Let otua.sg guide you through, so you can make a better decision before buying your car.
Authorised Dealers (AD) or “Tor Kor”
“This Mercedes Benz GLA is from Authorised Dealer one!”
The big boys with the glitzy car showrooms. The term authorised dealers refers to the mega brands like Borneo Motors or Cycle and Carriage. They are dealerships that have the actual distribution rights for a certain car brand.
When shopping for a used car, the term “Authorised dealer” is often used by car dealerships to indicate that the car was sold by an Authorised Dealership and was maintained by them. Do note that this may not be true as most Singaporeans tend to stray away from the Authorised dealership workshops after the warranty period to save costs.
Parallel Import (PI)
“This Honda Vezel is Parallel Import one, made in Japan!”
Parallel importers are not appointed by the manufacturer to be the official local distributor. They often get their cars directly from a factory or overseas distributor and import them to Singapore. They are often seen as the preferred choice for some car buyers since they are often more affordable.
Certificate of Entitlement (COE)
The COE is what makes Singapore car ownership unique from the rest of the world. New cars are registered with a 10 year Certificate of Entitlement. Car owners can choose to renew their COE when it expires or dispose of the vehicle. This is one of the main reasons why Singapore has one of the youngest fleets of cars in the world. The COE value is determined twice a month through a bidding process.
Guaranteed COE
Since there are a limited number of COEs during every window, some new car dealerships may sweeten the deal by offering you the prospect of a Guaranteed COE as they sell commercial vehicles. Do note that, there are often terms and conditions attached to it, such as top-ups, number of bids etc. This is the COE package that is usually recommended for inexperienced car buyers.
Non Guaranteed COE
Non Guaranteed COEs are usually more attractive during periods of high COE Premiums. Cars sold with a non guaranteed COE tend to be cheaper. Should the dealer be unable to obtain a COE for you, he will refund the deposit. The agreed bidding period is usually 3 months. We recommend that this package be avoided unless you are confident that COE Premiums will fall in the near future.
Paper value (or “paper”)
“The scrap price for your 2010 Honda Civic is Paper + $600”
The paper value is the projected rebate that the authorities will pay you in the event that you deregister your car from Singapore roads. This is often a combination of the PARF (Preferential additional registration fee) rebate and COE rebate. The paper value is often used as the base price when car dealerships or Car marts in Singapore offer to buy your vehicle.
Body value (or “body”)
“Your 2010 Toyota Vios is due for scrap already, we can only offer Paper + Body”
The body value is the price that exporters/scrap yards offer you when you decide to de-register your car from our local roads. The body value fluctuates regularly according to export demands as well as currency changes.
Scrap Value
The scrap value of your vehicle is the PARF rebate of your car at the end of it’s COE life. The current calculation for your scrap value is:
Additional Registration Fee / 2
The scrap value is an important figure for determining the depreciation value of your purchase; which we will cover next.
Depreciation (or “depre”)
“This BMW 320i is the cheapest unit in town! Only 10k depre”
Arguably the most important factor when shopping for your next car (second only to car condition). This is the amount of financial value your vehicle loses over time. Usually calculated annually, the formula is as shown below:
[(Purchase Price – Scrap Price) / Number of COE months left] x 12
Seasoned car buyers will tell you that the depreciation value is important to determine if the car is expensive or cheap. Take note that, the depreciation value is only accurate if you drive till the end of the car’s COE life.
While there are still a ton of car trade lingos that we have not touched, we hope that you can take advantage of this new information and make a better and more informed decision on your car purchase.
