The Mechanism Behind Car Valuation
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What makes up the valuation of a car? The concept may seem foreign and complicated, but we’re here to break it down for you. There are three main factors you need to know when calculating a car’s value, and they will come in handy when considering buying or selling a pre-owned car.
Open Market Value (OMV)
This is determined by the Singapore Customs when the vehicle is imported into the country, and will include the purchase price, freight cost, insurance and all other expenses involved in the sale and delivery of the car. The OMV of the vehicle will determine calculations for other additional costs, such as the ARF below, and all of these costs will affect the valuation of the car.
Additional Registration Fee (ARF)
This is a tax that is imposed on all vehicles upon registration with the Land Transport Authority (LTA) in Singapore. The ARF is calculated based on a fixed percentage that is dependent on the OMV of the vehicle.
The ARF contributes to a large portion of the price of a used car, as vehicles who have been on the road for less than 10 years are entitled to a PARF (Preferential Additional Registration Fee) rebate upon deregistration. A PARF rebate is calculated based on the unused portion of the COE when the vehicle is deregistered.
Certificate of Entitlement (COE)
The COE provides the holder with the legal right to register, use and own a vehicle in Singapore and is valid for 10 years. The cost of the COE is prone to fluctuation in market demand and is also dependent on the category in which your vehicle falls under. What is left of the duration of the vehicle’s COE will also determine the value of that car.
Apart from these factors, finding the right car consignment dealer will also help in getting the best valuation for your car. Car consignment consultants will charge a certain fee for selling your car for you so as to make some profit on top of the cost of buying over the vehicle, and that plays a part in the valuation of your car as well.
Want to find out how much your car is worth? Get your FREE car valuation today!