Selling your used car in Singapore can be a very complicated process. There are many steps that need your close attention even after the process of finding a buyer and negotiating is done. Just to mention a few things, varoius documentations need to be executed flawlessly so that the ownership of the car is transferred to the buyer in the records of the Land Transport Authority. Not only that, if you have an existing bank loan on the car, you need to ensure that it is paid before the application for change in registration is made.
But the most difficult part is to get the best possible price for your used car. There are hundreds of dealers whom you can approach. Which dealer should you select? Or should you cut out the middleman altogether and sell directly to someone who wants to buy a used car? Here is some information that you may find useful.
1. How can you get the best price for your used car?
Most people prefer to use the services of a dealer. Dealers have expertise in how a sale transaction works and therefore can be of great help. While it is definitely possible to understand the steps to be taken to sell your used car on your own, it will require a great deal of time and effort on your part.
However, you need to select a dealer with great care. Often, dealers are incentivized to make a sale happen as soon as possible so that they can receive a commission and move onto the next deal. While there certainly are trustworthy used car dealers out there, there have been instances of customers getting cheated. Last year, a used car dealership, Cars Today, cheated 89 people for a total sum of S$3.2 million. In order to ensure that you get the best price, you should find a dealer that you can trust. The simplest way of doing so could be to ask a friend or colleague who has sold a car recently.
Our pecond precaution that you can take is to find a dealer who has a CASETRUST-SVTA accreditation. The Consumer Association of Singapore (CASE) and the Singapore Vehicle Traders Association (SVTA) jointly certify dealers who meet certain pre-determined criteria. This can help give you more confidence that the dealer you work with is certified by the government and thus can be held accountable for their compliance with the law and ethics.
Thirdly, you should try to find a dealer who has expertise in the brand of car that you are selling. If you want to get rid of your old Honda Civic, don’t approach a dealer who specialises in Mercedes cars. If you make this mistake, you will usually get a quotation that is below the fair market price.
Lastly, it is also useful to speak to more than one dealer. But be prepared to show your car to each of them. You cannot get an accurate estimate of the selling price just by calling several dealers on the phone.
Before deciding on a targeted price for your used car, you can read our guide on car value depreciation to understand how a car's price declines with time in Singapore.
If you've found a buyer, taking the dealer’s help to complete the paperwork is usually the best course to follow. Dealers are familiar with the procedure and the documentation requirements, so you don't have to spend an enormous amount of time to avoid making a mistake. However, it is important that you spend a little time in understanding the various steps that are involved. This will help you to monitor the progress and ensure that the process for the transfer of vehicle registration is being correctly carried out.
For instance, according to the rules framed by the Land Transport Authority, it is an offence not to transfer the vehicle registration within seven days of giving possession of the vehicle to the buyer. To transfer the registration of your vehicle, you must first obtain a Transaction pin. This is an alphanumeric password issued by the Land Transport Authority to the registered owner of a vehicle and can be obtained online on the eServices page of the One.Motoring website. The Transaction pin can also be collected from the Land Transport Authority at Sin Ming Drive.
3. Remember To Repay Your Car Loan
Before you sell your car, you must first pay the outstanding loan amount that is due to the bank. The normal procedure that sellers follow is to authorise the dealer to whom the car is being sold to pay this amount. Consequently, the sale price that you receive will be reduced by the outstanding loan amount.
Some sellers worry that the dealer may not pay the bank and that the loan will remain outstanding against their account. While this is a possibility, there are several precautions that you can take. First, if you work with a dealer who has CASETRUST-SVTA accreditation, you can generally trust them to operate in compliance with the law. Secondly, you can also check with the bank to confirm that the loan has been paid on your behalf to keep a tap on your dealer.
4. Selling Your Used Car Directly
It is quite possible to get a better value for your car if you sell to a user directly instead of to a dealer. But for most individuals, this is not advisable. You will need to invest a great deal of time in understanding the procedural requirements for transferring the vehicle. Also, if you have any car loan amount outstanding, you will have to pay it yourself. In the normal course of the process, an individual buyer will not be able to take up the responsibility of paying the bank.
Don’t Be In a Hurry to Sell
It is usually a good idea to have your car inspected by at least three dealers and get an indicative price from each of them. Of course, this will take some effort on your part. But at least it will ensure that you get the maximum possible value for your used car so that you can use the fund to 1) repay any car loan outstanding, 2) help purchase your next car or 3) funnel the money into something else you need to do. If you are in the market for a new car after the sale, we have prepared a detail report on the best car loans in Singapore so you can find the best loan to help finance your purchase.