30-10-2011, 01:20 PM
The Straits Times
Oct 30, 2011
Now is a good time to sell your car
By Christopher Tan
A little more than two years ago in this page, I said it was a good time to buy a car, despite the economic turmoil that was unfolding then.
I reasoned that car prices would head for the moon soon on the back of a severely constricted certificate of entitlement (COE) supply.
Well, those who did buy a car then must have thanked their lucky stars, and at least one - my colleague Peter - thanked me.
The price of a Toyota Corolla 1.6 has rocketed from $55,000 then, to about $110,000 today. The bigger Camry 2.0 has gone from $78,000 to $152,000.
Generally, car prices have doubled since.
Today, I am making a 'sell' recommendation. Yes, it is now a great time to make an exit: to give up the car - if not permanently, then temporarily.
It might seem strange for a motoring columnist to recommend that you get rid of your car, but I am doing so purely for economic reasons.
Car prices are near record levels. If you had bought your car between 2008 and last year, there is a good chance you will make some money exiting the market (unless you had taken an inordinately huge loan, or you had bought a Chinese car).
Take the example of housewife Melvina Chua, 39, who made a tidy profit of $15,000 selling her Volkswagen Golf recently.
She bought the hatchback in June 2009 for $75,300, and sold it for $91,000. She could use the extra cash to remodel her kitchen, or go on a holiday.
Even if you had not bought your car recently, it is still a decent time to sell it now. Those who entered the market between 2005 and 2008 will be able to do so with bearable losses.
For instance, a Toyota Wish bought for $67,000 in 2006 can now fetch around $47,000. That works out to $20,000 for five years of use, or just $4,000 a year.
Times like this do not come frequently. The next time anyone can sell a car and make money (or not lose too much) will be several years down the road. That is, if the current COE system does not change drastically.
Economics aside, it is a relatively painless time to give up the car now because Singapore's MRT expansion programme seems to have gone back on track.
The Circle Line is up and running, improving connectivity and convenience for thousands of households along its 33.3km alignment.
And with one new rail project scheduled for completion every single year up till 2017 (and quite possibly up till 2020), the need for a car is no longer as dire as before.
So, once again, opt out of driving if you do not have a real need for a car. Or give up that second car, at least. You can always re-enter the market later, when prices return to saner levels (and mark my words, they will).
If I haven't made myself clear by now, let me say it one more time: This is not a good time to buy a car (especially a new one). In fact, it is one of the worst times you can sign on the dotted line.
To borrow a stock market parlance, there is not much upside to the market now. That is to say, we are near peak prices. If you buy now, brace yourself for substantial and unnecessary losses ahead.
Oct 30, 2011
Now is a good time to sell your car
By Christopher Tan
A little more than two years ago in this page, I said it was a good time to buy a car, despite the economic turmoil that was unfolding then.
I reasoned that car prices would head for the moon soon on the back of a severely constricted certificate of entitlement (COE) supply.
Well, those who did buy a car then must have thanked their lucky stars, and at least one - my colleague Peter - thanked me.
The price of a Toyota Corolla 1.6 has rocketed from $55,000 then, to about $110,000 today. The bigger Camry 2.0 has gone from $78,000 to $152,000.
Generally, car prices have doubled since.
Today, I am making a 'sell' recommendation. Yes, it is now a great time to make an exit: to give up the car - if not permanently, then temporarily.
It might seem strange for a motoring columnist to recommend that you get rid of your car, but I am doing so purely for economic reasons.
Car prices are near record levels. If you had bought your car between 2008 and last year, there is a good chance you will make some money exiting the market (unless you had taken an inordinately huge loan, or you had bought a Chinese car).
Take the example of housewife Melvina Chua, 39, who made a tidy profit of $15,000 selling her Volkswagen Golf recently.
She bought the hatchback in June 2009 for $75,300, and sold it for $91,000. She could use the extra cash to remodel her kitchen, or go on a holiday.
Even if you had not bought your car recently, it is still a decent time to sell it now. Those who entered the market between 2005 and 2008 will be able to do so with bearable losses.
For instance, a Toyota Wish bought for $67,000 in 2006 can now fetch around $47,000. That works out to $20,000 for five years of use, or just $4,000 a year.
Times like this do not come frequently. The next time anyone can sell a car and make money (or not lose too much) will be several years down the road. That is, if the current COE system does not change drastically.
Economics aside, it is a relatively painless time to give up the car now because Singapore's MRT expansion programme seems to have gone back on track.
The Circle Line is up and running, improving connectivity and convenience for thousands of households along its 33.3km alignment.
And with one new rail project scheduled for completion every single year up till 2017 (and quite possibly up till 2020), the need for a car is no longer as dire as before.
So, once again, opt out of driving if you do not have a real need for a car. Or give up that second car, at least. You can always re-enter the market later, when prices return to saner levels (and mark my words, they will).
If I haven't made myself clear by now, let me say it one more time: This is not a good time to buy a car (especially a new one). In fact, it is one of the worst times you can sign on the dotted line.
To borrow a stock market parlance, there is not much upside to the market now. That is to say, we are near peak prices. If you buy now, brace yourself for substantial and unnecessary losses ahead.