Have you had your first car over the past few years but are now itching for a change? During your car ownership adventures, there may come a time when you wish to sell your car in Singapore.
Out with the old, and in with the new, as they say. Nonetheless, while the used car market in Singapore is thriving, the process of selling your car is complex and confusing for first-timers. This is especially given the variety of ways available to do so.
To find out which pathway is best for you, and our tips and tricks for selling your car, read on!
1. Settle Your Loans and Insurance
Tie up all loose ends
Before you can even begin to sell your car in Singapore, make sure you have settled all outstanding loans and insurance on the vehicle.
The transfer will only be approved by the Land Transport Authority (“LTA“) if the following conditions are met. It must be shown that the car has a valid road tax and the insurance policy of the new owner has been activated.
2. Decide On a Targeted Price To Sell Your Car in Singapore
Do your research to know what it’s worth
Before beginning the process of selling, do your research on the rough estimate of the value of the car. You need to know what your car is worth, before getting a good deal for it. Do note that a car’s value depreciates over time in Singapore. Thus, you should calculate its annual depreciation to understand how much you can earn by selling your car.
As a rule of thumb, annual depreciation = (Total Cost of Vehicle – Sale Value of Vehicle) / Number of Years in Service. This formula is more complicated than it seems, so do your online research to accurately gauge just how precious your vehicle is worth.
Do note that the value of your car is also based on the current market conditions. In this regard, the latest Certificate Of Entitlement (“COE“) pricing and fluctuations having a greater effect on newer cars less than a year old.
3. Selling to a Used Car Dealer
Find the right one
Selling to a used car dealer is probably the most conventional and heard-of method to sell your car in Singapore. However, select your dealer with great care. Often, dealers are profit-motivated and are simply keen on closing as many deals as possible so that they can receive their commission. They are probably not looking to give you a fair deal for your car.
Some car dealerships may also be cheating you and running a scam. In 2016, used cars dealer Cars Today cheated 71 buyers, 14 sellers and four finance companies out of a total of $3.16 million in money and cars.
Not all dealers are shady, but it is best to do your research. Find a used car dealer with CASETRUST-SVTA accreditation. They are jointly certified by the Consumer Association of Singapore (“CASE“) and the Singapore Vehicle Traders Association (“SVTA“) according to predetermined criteria, so you know your car is in good hands.
You can also find a reliable and trustworthy used car dealer simply through word-of-mouth. Try speaking to your colleagues and friends regarding how they sold their used cars.
Lastly, do not commit to the first used car dealer you find. It is wiser to consult multiple used car dealerships to ascertain which dealership will get you the best price for your car.
4. Sell a Car by Consignment
Paying another to sell on your behalf
What is consignment?
Consignment is allowing a dealer to sell your car in Singapore on your behalf but retaining all legal ownership of the car until it is sold. This process will differ depending on the dealer you are working with. Some may require you to leave the car at the dealer’s showroom, while for others, you are free to keep the car with you. However, in the case of the latter, you will have to visit the showroom with your car whenever there is an interested buyer, which can be a hassle and interrupt your day’s activities.
Selling your car through consignment is beneficial as the experienced dealer will be with you throughout the entire sales process, from start to finish. You will feel a greater sense of security knowing that there is someone helping you navigate through this cumbersome and at times bewildering process.
Nonetheless, do note that you will be paying for this peace of mind. Dealers take a cut of the final sale, ranging from a flat fee to 1% of the final selling price.
5. Sell Directly to Another Car Buyer
Potentially reaps the greatest returns
Selling directly potentially grants you the greatest financial returns.
In the age of online shopping, you can buy virtually anything on the internet. This includes big-ticket items such as cars. Finding a buyer for your car can be as simple as posting an advertisement on sgcarmart.com or even Carousell! The best thing is, no middleman is involved so you can cut out substantial middleman fees.
Comes with its own issues and requires more effort
However, this method does come with its own set of issues and requires greater commitment on your part.
Firstly, advertisements don’t come cheap. For instance, standard ads on sgcarmart.com cost S$58. Furthermore, to pin your advertisement to the top of search results, you would have to pay extra for premium advertisement spaces that provide a range of additional benefits.
Moreover, your advertisement will be clamouring for attention amongst the many online advertisements available. Hence, you must put in the effort to create an appealing advertisement. This is no regular Instagram post. To stand out from the crowd, you should snap a good photo of your freshly-washed and groomed car. You’ve also got to be as detailed as you can be in describing the qualities and condition of your car. This provides the necessary information for sellers to make their purchasing decisions.
The process of finding and directly dealing with a car buyer may also be quite time-consuming. This is because you may need to wait for interested and serious buyers and directly negotiate a sales agreement with them. You also need to do due diligence on the potential buyer and ensure that the legal paperwork is completed properly.
6. Trading in Your Car
Great for those in a hurry
This is by far the fastest and most convenient way to sell your used car and earn some extra cash. This is because you would only have to negotiate an agreement with the dealer who is experienced enough to smoothly facilitate the nitty-gritty process of paperwork.
However, the nature of trade-ins is that you sell to the same dealer you are buying your new car from. Thus, you may have to pay for the greater speed and may be offered a price that is below the market rate and true worth of your car.
Conversely, since you are buying another vehicle from the same dealer, certain dealers are willing to negotiate with you for a better deal for both parties, working to your advantage.
Again, research is key here if you are committed to this path. Steer clear of dealers infamous for offering horrible prices, and look to those who typically offer to purchase used vehicles at a rate above that of the general market.
7. Meeting an Interested Buyer
Take the necessary precautions
Congratulations! After a few weeks, you should have found an interested buyer. You should then set up a test drive with your potential buyer. It is best to demarcate a set route you will allow the potential buyer to drive. Take extra precautions by asking the potential buyer to sign an indemnity form beforehand, otherwise, you could be responsible for any damage caused during the drive.
If the potential buyer agrees to buy the car, that’s great news for you! However, the process is not over yet. Before heading down to LTA, you should draw up a sales contract that allows you to collect a sales deposit from the buyer. This allows you to sieve through the serious buyer from flippant ones. This also means that the buyer agrees to pay all of LTA’s transfer fees and levies, and is responsible for their own motor insurance.
8. Transferring Ownership
Making it official
If you’ve reached this step, hurray for you! You’ve found a serious buyer who is keen to purchase your vehicle at the price negotiated. All that’s left for you is to fulfill some simple steps.
You first need to check with the buyer if their loan and motor-insurance are approved, before handing down to LTA together to co-sign an M01 transfer form. This process requires both the buyer’s and your identification documents, and the buyer’s original motor insurance certificate. Following that, you pay a transfer fee of $25.
After this, the deal is complete. Before parting ways with your car, it is best to issue a vehicle handover form to your buyer, before returning home a very satisfied seller with some extra cash in your pocket!
Unless you are a seasoned car owner, to sell your car in Singapore can be a rather intimidating process. Nonetheless, it is fairly easy to navigate your way through the market’s complexities, and the range of options available should encourage, rather than deter you, with its flexibility and diversity. Simply do your research, assess your options, and you’re good to go!
Looking to buy a new car after selling your old car? Here are 10 Key Factors When Considering How to Buy a Car in Singapore.