By Lin Jiamei | Posted: 05 April 2010 1705 hrs
SINGAPORE: It's a seller's market now for second-hand cars, as high COE prices drive up the resale value of used cars.
Dealers say sales of used cars have gone up by at least 30 percent over the last two weeks.
Certificate of Entitlement (COE) prices for vehicles soared when the last bidding exercise ended on March 24, as the market reacted to an expected reduction in the supply of COEs this month.
The biggest increase was in the Open category, where the COEs can be used for any vehicle type but end up usually for cars. Here, the premium rose S$14,411 to close at S$42,001.
While the sky-high COE prices may be bad news for first-time car buyers, it may just be good news for those looking to sell their cars.
With the higher COE prices, car dealers say they are seeing more people who are willing to sell their cars in order to upgrade to another one.
These sellers are asking for at least the same price at which they bought their cars about one or two years back.
And dealers are willing to match these prices in anticipation of better sales in the second-hand car market in the months ahead.
Wang Weiye, sales manager at Vegas Automobile, said: "A BMW is the most classic example. A new car then was $108,000. But in today's used car market, a car like that, which is about a year old, can (fetch) $128,000. Instead of losing money, you have gained $20,000 in returns. It is as if consumers are driving the car for free and taking in a profit."
Eric Liew, sales manager at Fugen Automobile, said: "We actually saw a lot of people upgrading from, for example, a Honda Fit to a Volkswagen Polo, from a Japanese car to a Continental car."
Raymond Tang from Yong Lee Seng Motor said: "....about three to four months ago when they wanted to sell a car (and buy a new one), they needed to top up the difference or maybe they will take lesser money back.
"But now, they do not need to top up and instead they can break even on the car price or they may even take more money back to put into their next car.
"Two years ago, if you buy a Toyota Altis, you will be paying around $50,000. Now, you can even sell out at around this range...and you are not making a loss."
The results of the next round of COE bidding, which is the first after a supply cut, will be out this Wednesday.
- CNA/ir
Dealers say sales of used cars have gone up by at least 30 percent over the last two weeks.
Certificate of Entitlement (COE) prices for vehicles soared when the last bidding exercise ended on March 24, as the market reacted to an expected reduction in the supply of COEs this month.
The biggest increase was in the Open category, where the COEs can be used for any vehicle type but end up usually for cars. Here, the premium rose S$14,411 to close at S$42,001.
While the sky-high COE prices may be bad news for first-time car buyers, it may just be good news for those looking to sell their cars.
With the higher COE prices, car dealers say they are seeing more people who are willing to sell their cars in order to upgrade to another one.
These sellers are asking for at least the same price at which they bought their cars about one or two years back.
And dealers are willing to match these prices in anticipation of better sales in the second-hand car market in the months ahead.
Wang Weiye, sales manager at Vegas Automobile, said: "A BMW is the most classic example. A new car then was $108,000. But in today's used car market, a car like that, which is about a year old, can (fetch) $128,000. Instead of losing money, you have gained $20,000 in returns. It is as if consumers are driving the car for free and taking in a profit."
Eric Liew, sales manager at Fugen Automobile, said: "We actually saw a lot of people upgrading from, for example, a Honda Fit to a Volkswagen Polo, from a Japanese car to a Continental car."
Raymond Tang from Yong Lee Seng Motor said: "....about three to four months ago when they wanted to sell a car (and buy a new one), they needed to top up the difference or maybe they will take lesser money back.
"But now, they do not need to top up and instead they can break even on the car price or they may even take more money back to put into their next car.
"Two years ago, if you buy a Toyota Altis, you will be paying around $50,000. Now, you can even sell out at around this range...and you are not making a loss."
The results of the next round of COE bidding, which is the first after a supply cut, will be out this Wednesday.
- CNA/ir
