New vs Used Car Loans: Which is the Better Deal?
Compare the loan terms, interest rates, and total cost of ownership for new versus used cars in Singapore.
Loan rates for new vs used cars
New car loans typically attract lower interest rates (around 2.28–2.78% flat p.a.) compared to used car loans (2.78–3.5% flat p.a.). However, the higher purchase price of a new car usually means a larger absolute interest cost.
Depreciation
A new car loses roughly 10–15% of its value in the first year. Used cars have already absorbed the steepest depreciation — this is why many financial advisers recommend buying a car that is 3–5 years old.
PARF and COE rebate
Understanding your vehicle’s PARF rebate (payable at deregistration) and remaining COE value affects total ownership cost significantly. Factor these into your decision.
Insurance differences
Insurance premiums for new cars are typically higher. Some used cars, depending on age and model, may be harder to insure comprehensively.