Your Essential Guide to Buying a Used Car in Singapore

As many of us would know, Singapore holds the dubious honour of being one of the most expensive countries in the world to own a car. Almost any brand new car you purchase will not cost less than a six-digit sum. Furthermore, you only realistically own a car in Singapore for 10 years thanks to the Certificate of Entitlement (COE) system.

And with COE prices being so high across several years now, it comes as no surprise that an increasing number of prospective car owners here are choosing to buy a used car to tide them over until, hopefully, the cost of a COE drops to a comfortable level.

But there’s a little more to look out for when buying a used car as compared to buying a new one. If you’re interested in one, you’ll need to thoroughly do your research before parting with your money.

We’ve compiled a list of handy tips below to guide you through buying a used car in Singapore so you can find the best car for your needs.

Who Should You Buy a Used Car From?

When you’re buying a used car, you need to ensure the actual condition of the vehicle is as advertised by its seller. How vigilant you need to be about checking depends on who you’re buying the car from, although it’s ideal to exercise the same level of care across all sellers.

If you’re willing to pay a little more, do look into buying a pre-owned car from an official showroom or a dealership. The advantage of buying used cars at dealerships is that, due to their high visibility in the Singapore car market and media, they have a stake in maintaining a reputation for honesty, reliability and quality

Therefore, you can have a greater degree of confidence that the car’s condition will be identical or extremely close to how it is being advertised.

Used cars bought from dealerships may come with additional warranties as well, which can be reassuring to buyers anxious about the longevity of used cars. You are further protected as a buyer thanks to the Lemon Law, which requires consumer goods sold by registered businesses to perform up to a reasonable standard given its make and mileage.

Alternatively, you can buy a used car from an individual seller. Although you’ll have more work to do to ensure you genuinely get what you pay for, you can often find much more affordable cars this way.

If you decide to go this route, be sure to follow the following precautions:

Check Out a Variety of Sellers

This gives you a good idea of how much a car that fits your specifications is selling for in the market. As a result, this will improve your negotiating position and help to ensure you pay a fair price once you eventually decide on a particular seller and vehicle.

Ask for Servicing and Maintenance Records

You want your used car to last for a long time, and vehicles that have been serviced regularly throughout their lifespans according to the manufacturer’s recommendations will continue to perform well for a longer period of time. Furthermore, the majority of pre-owned cars in Singapore are fairly new, all things considered. Therefore, it should be fairly easy for the seller to provide a complete list of servicing and maintenance records.

On the other hand, it should be equally easy for you to then check and verify that these records are authentic.

Have the Car Thoroughly Inspected

Following up from the point above, you should hire a professional evaluation centre or a reputable mechanic to inspect the car so you can be completely sure of its condition, age, and mileage before you buy it.

Disreputable sellers may try to mislead you regarding the vehicle’s accident history, maintenance records, age, and mileage. They may even tamper with the car’s odometer or covering up scratches with paint jobs.

Go for a Test Drive

You should pay close attention to how the suspension, brakes, steering, and gearbox are functioning during this time. As you’re test driving the car, take into account everything you’ve discussed with the seller too. Does everything translate to its on-road performance? Are there any discrepancies which you’ll need to discuss more with the seller about?

Ensure a Contract Is Drawn Up

This allows the both of you to document the transaction once you and the seller are ready to make a deal. Additionally, have a trusted third party present to witness the transaction taking place. You and the seller should read the fine print and make sure you’re in agreement for every point.

At this point, you still have the opportunity to avoid paying any ambiguous or hidden fees by combing through every charge and fee proposed.

Lastly, don’t sign a contract or form until it is final and cannot be altered by the seller. Remember, a properly written contract is a legally binding document once you and the other party have signed it. Don’t get into any unnecessary financial trouble because of this.

Related: The Best Car Loans in Singapore

Should You Buy a COE or PARF Car?

When you’re in the market for a used vehicle, you have the option of buying either a Preferential Additional Registration Fee (PARF) or COE car.

A PARF car is a vehicle under 10 years old. Essentially, it still bears its original COE. Therefore, you can still qualify for a PARF rebate if you de-register the car before it passes its 10th birthday.

On the other hand, a COE car is a vehicle which has had its COE renewed through its former owner paying the Prevailing Quota Premium (PQP) for either five or 10 additional years. Additionally, this vehicle must be at least 10 years old.

Ultimately, which kind of used car you should purchase depends on your preferences regarding the overall cost and vehicle condition.

COE Car

COE cars are generally going to be your cheapest option for a used vehicle. Any COE car will be at least 10 years old. As such its Open Market Value (OMV) would have depreciated significantly from it was when brand new, and its price should reflect that.

Also, when you’re buying a COE car, built into the price is the time left on its COE. Depending on what the PQP was when its COE was renewed, it’s possible you may be able to save a lot of money by not having to pay the current PQP for a new COE.

For example, the average price of COEs in Category A in 2009 was S$10,744, as compared to the average COE cost in 2024 which is currently around $79,000. If you bought a car that had its COE renewed in 2009, you’d only have to pay a fraction of the PQP cost from 2009 and save tens of thousands of dollars.

If you end up de-registering your used car before its new COE expires, you also can qualify for a rebate based on the amount of unused time left on its COE at the time of de-registration.

However, there are also some drawbacks to buying a COE car you should bear in mind.

As your car continues to age past the 10-year mark, you will be obligated to pay a progressively larger amount in road tax, as outlined in the table below.

Also, carefully consider the condition of the used car you have in mind. Due to a COE car’s higher age, it may have accrued significant mileage. As mileage accumulates in a car, its performance depreciates too.

The downside is that you may find yourself paying to repair or replace parts for your car more frequently than you’d anticipated. This is especially so if the car in question did not undergo regular periodic maintenance for the first 10 years of its lifespan.

PARF Car

Conversely, PARF cars grant you the opportunity to drive a newer vehicle that has accrued less total mileage.

This may just lead to lower maintenance costs, and it doesn’t require you to pay higher road tax surcharges until the car turns 10. As you can see from the table above, this surcharge can be as high as 50%!

What’s more, because a PARF car is still under 10 years old, you can benefit from both the PARF and COE rebates as long as you de-register it before it turns 10 and before its COE expires. Obtaining these two rebates could help counter a major downside to buying a PARF car: Its cost.

Not only are PARF cars generally more costly than COE cars, you may also have to part with a larger down payment. The Monetary Authority of Singapore mandates that people purchasing a car with an OMV of S$20,000 or less can borrow up to 70% of the vehicle’s purchase price. If the car you’re buying has an OMV of more than S$20,000, you can borrow up to 60% of its purchase price instead.

As PARF cars are newer than COE cars, their OMVs wouldn’t have depreciated as much by the time you’re buying it. This results in a higher likelihood that its OMV is still higher than S$20,000 and therefore, a higher down payment of 40% of the purchase price would be required.

Conclusion

Buying a used car in Singapore requires you to be meticulous and patient, which is especially important should you decide to purchase a vehicle from an individual seller rather than an official showroom or dealership.

This allows you to get the most value for your money and ensures the car you do get can perform well for as long as you intend it to.

Take your time in checking every aspect of the car, from its internal and external condition to how accurate its servicing and maintenance records are. Finally, ensure what you’re paying is indeed a fair price for that very car model and condition it’s in. Even though you’re buying a used car in Singapore, it’ll set you back a pretty penny.

If you just made a car purchase, be sure to check out and compare the best car insurance in Singapore to protect you and your vehicle!

Read More:

• What’s the Average Cost of COE in Singapore?
• Why the Cheapest Car Insurance Plan Isn’t Always the Best
• What is a Car Insurance Excess?
• Cost Comparison: Regular-Use vs Off-Peak Cars – How Much Can You Save with the Latter?
• VC Compares: Hybrid Cars VS Electric Vehicles (EVs)

Cover image source: Unsplash