Let us face it, most people may need a private mode of transport for a valid reason. Once you have made the decision of purchasing a second hand car here are some important things you need to do. For the purpose of this article all tenure of loans and assumptions made are based on a chat that has seven years left of its original COE. Always remember that you should have a good car servicing company for car service.
First of all, have enough finances and if you don’t, look at the different hire purchase schemes provided by the car dealer to sift out the best deals. Remember a car has depreciating costs and when you make a bad deal, you will incur losses even if you sell earlier than the tenure that you signed for.
Since the cars are second – hand, the interest rate usually fluctuates anywhere between 2% to 5.5% per annum. That is a hefty amount of savings that can be depleted if you choose the company with the higher interest rate.
Take a look at the following table as an illustration.
Lower Interest Rate
Higher Interest Rate
|Used Car (30% principal – balance 70% loan)|
Interest Rate – 2.28%
|Used Car (30% principal- balance 70% loan)|
Interest Rate – 5.5%
|Principal amount $60,000 – $18,000 = $42,000||Principal amount $60,000 – $18,000 = $42,000|
|Interest Rate calculation|
$42,000 X 2.28% X 7 = $6,703.20 (7 years loan
|Interest Rate calculation|
$42,000 X 5.5% X 7 = $16,170 (7 years loan)
|Principal Amount = $42,000 + $6,703.20 = $48,703.20||Principal Amount= $42,000 + $16,170 = $58,170|
|Instalment Tenure= 84 months||Instalment Tenure= 84 months|
|Monthly Instalment= $48,703 / 84 = $579.80||Monthly Instalment= $58,170 / 84 = $692.50|
2) Mileage Condition
Know the exact mileage that the car has clocked in over the past few years that it has been driven. If you are driving the car for a remaining 7 years, and the car has already hit a mileage of 70,000km in the last three years then undoubtedly the car has been over driven. A rough calculation will work out to be about 23,000km that has been driven over a year. That means in the second year that you drive the car, it would have hit its 100,000km mileage and the warranty on its servicing will no longer be valid. Alternatively, the mileage displayed can be unusually low at times so here are some tips to see if the odometer might have been tampered with:
- Cross-check the mileage with figures found on maintenance and inspection records
- See if the odometer numbers are aligned on the instrument cluster
- Check for any visual discrepancies on the screen
- If the mileage is way below the average yearly use, there’s a good chance the mileage has been tampered with
- Look for missing screws on the dashboard
- Bring the car to your trusted car workshop for a more in-depth inspection
Remember that on average, Singaporeans will drive 12,000km – 18,000km a year. If you find that the odometer is showing significantly lower numbers, ask the owner or dealership why this is so. If he/ she gives unusual answers, reconsider your choices.
You can also protect yourself from being a victim by insisting that the current mileage is recorded in the sales agreement. This will help prove breach of contract if the figures turn out to be false after you have made your purchase. If the dealer is hesitant, there is a good chance he might be guilty.
Additionally, you can avoid buying cars without full service history. In fact, you can reject the car immediately.
Ensure that the car has not been involved in a previous accident. You can ask the car dealer to send the car for a vehicle inspection.
Here are a few tell-tale signs you should look out for to see if the car has been tampered with:
- Some parts have been replaced
- Mismatched or missing screws/fasteners
- Scrapped/scratched paint problems or inconsistent paint jobs
- Inconsistent panel gaps
- Welding marks
- Creased panels or cracked windows
4) Exterior, Interior and Engine Condition
Before you agree on purchasing the car, thoroughly inspect the car. Look at the exterior and do not skip the under hood. Spotting scratches or dents are easy, but spotting rust is more difficult and yet it can be more detrimental. Rust can cause major safety issues as it can weaken the frame of your car and even seep through to affect your suspension or brakes.
When checking the interior, make sure you test out all the buttons and different car functions. Here are some checks you should remember to do:
- Test the air conditioning – make sure the cabin gets cold and the air is blown consistently
- Windshield wipers – that it swishes from left to right and does not get jammed halfway.
- Signal lights, headlights, high beam, cabin lights – they have to be bright enough especially in night driving.
- Windows and side mirrors – there must be no physical damage
- Radio or infotainment system – the buttons and menu system can easily be navigated.
- The leather/fabric on the seats are not worn out.
If you’re inspecting the parts under the hood, bring along a trusted friend or a mechanic.
- Look out for leaks (Fresh oil on the engine is a huge sign of a problem)
- Engine oil – if it’s black, it means that it’s not been regularly maintained
- Transmission fluids – if the transmission fluid looks brown/orange and smells slightly burnt, that is a sign there might be some issues present
- Coolant level – also check the colour of your coolant, it should be green. If the coolant is pinkish/brownish, the coolant has to be replaced.
5) Warning Lights
Pay close attention to the dashboard and the LCD display. If you notice any unusual signals lighting up each time you close the door, boot and just about for no reason, then most likely the car has some issues that have not been rectified. The worst case scenario is that the car would have been involved in a car accident or the car may not have been serviced on time.
With this handy guide, you are just a step closer to getting that dream second- hand car!