ALMOST NO ONE IN SINGAPORE BUYS A NEW CAR WITH CASH.
1. AN AVERAGE JOE EARNING $2500/MONTH (WITHOUT TAX DEDUCTIONS ETC.) DOESN'T HAVE $100,000 IN HIS BANK TO PAY OFF HIS NEW VW SCIROCCO ON TOP OF HIS AVERAGE GOVERNMENT APARTMENT (AKA FLATS) THAT COST $300,000 (OR $900/MNTH FOR 30+ YEARS).
2. IF THE CAR MEETS WITH SUPER SERIOUS PROBLEMS (I.E. CATCH FIRE, ACCIDENT, THE OWNER WILL BE HAPPY THAT HE HADN'T PAID FULL SUM)
3. NEW CARS IN SINGAPORE USUALLY LIVE LESS THAN 3 TO 5 YEARS, BEFORE BEING SOLD OFF, OR EXPORTED. AT MAX, THEY CAN ONLY LIVE UP TO 10 YEARS, BEFORE THAT COE (SEE POST ABOVE) HAS TO BE RENEWED AT COST OF $10,000+ AGAIN. THIS IS BECAUSE CITY DRIVING TORTURE THESE CARS WITHOUT MUCH HIGHWAY MILES, SO THEY DIE OFF AT 100,000 MILES OR SO. HENCE, WHY BOTHER WITH SPENDING SO MUCH OF YOUR CASH WHEN THE CAR WILL DEPRECIATE? WHY NOT SPEND THE CASH ON THE HOUSE DOWNPAYMENT INSTEAD?
SO FOR EXAMPLE, MY DAD'S BMW E90 320I PROFESSIONAL AT $139,000. IT WAS PAID WITH A $50000 CASH, AND THE REMAINING SUM ON LOAN, AT 2.88%P.A FOR 7 YEARS., WHICH WILL INEVITABLY MAKE THE REAL VALUE BE AS MUCH AS A NEW BMW 520I SPORT IN 7 YEARS.
WE'RE SMART BUYERS, BORROWING AS LITTLE FROM LOAN AS POSSIBLE. THE INDUSTRY SECRET THAT BANKS DON'T WANT CAR OWNERS TO KNOW IS THAT BORROWING 60% OF THE CAR'S VALUE IS BEST, MINIMUM INTEREST
RAPE, MAXIMUM BUDGET FOR YOU TO BUY YOUR DREAM CAR.
AND FOR MY FIRST CAR, I'LL PROBABLY BUY A 10+ YEAR OLD BMW 3 SERIES IN 2 OR 3 YEARS' TIME, WHICH COST $15,000 (E36 320I) TO $30,000 (E46 320I). I THINK I'LL BORROW $4000 FROM THE BANKS, AND THE REST INTEREST-FREE FROM RELATIVES/PARENTS/FRIENDS.
CHEERS ON YOUR NEWLY CLEANED MERC!