In appreciation of depreciation

SINGAPORE — A car’s sticker price is one thing, but how much it actually costs to own is another. The latter is a matter of depreciation, which is the true price you pay between buying a car and getting rid of it one day.

In more precise terms, the depreciation on the car is the difference between how much you bought it for and the amount you receive when you get rid of it in the future.

And while it’s impossible to predict what tomorrow will bring with any certainty, the Singapore car market makes it easy to calculate a new car’s depreciation over the 10-year lifespan of its COE (Certificate Of Entitlement).

That’s because de-registering (and then scrapping or re-exporting) a car entitles the owner to a rebate on the upfront taxes that were paid when it was first put on the road.

This amount, known as the PARF (Preferential Additional Registration Fees) Rebate, guarantees you a fixed sum at the end of 10 years, which makes it possible to calculate the straight-line depreciation for any new car.

The numbers can be complicated but we’ve crunched them for you to come up with a list of seven cars that each depreciates at S$12,000 a year or less — or S$1,000 a month. There are other models out there that meet the same criterion, but these are relatively safe yet varied choices that should provide years of satisfying motoring.

One caveat: The main figure used to calculate depreciation for a car is its Open Market Value (OMV), which is basically its price from the car factory and all the costs associated with shipping it here. That amount tends to vary with currency fluctuations, so the historical OMV figures used to perform the calculations here may not tally precisely with what you get from buying the same car today, though they shouldn’t be far off either.

In any case, here are seven cars that cost about S$1,000 a month to own:

HYUNDAI TUCSON S/R

S$126,999 with COE

Korean cars are considered basic, but the Tucson says otherwise. It’s quiet on the move and has tidy handling with a smooth ride, but the S/R model (for sunroof) has equipment like a powered tailgate and blind spot monitor. Cabin plastics have improved, too.

TOYOTA WISH ELEGANCE 1.8

S$120,888 with COE

A classic seven-seat Multi Purpose Vehicle (MPV), the Wish is a ubiquitous sight here, thanks no doubt to Toyota’s reputation for 
dependability and ease of use. It has useful features like rear-seat entertainment and six airbags, with easy-to-fold rear seats.

NISSAN X-TRAIL

S$124,988 with COE

If any car is made up of a recipe that’s designed for success in Singapore, the X-Trail is it. It’s a crossover (currently a hot segment) with seven seats (always a hit with family men) and a Japanese badge (trusted by locals). For S$1,000 a month, it’s tough to beat.

OPEL INSIGNIA

S$133,888 with COE

How’s this for a curve ball: A plush German sedan that isn’t an Audi, Mercedes-Benz or VW? Yet, Opel’s Insignia offers German-car attributes at Korean-car prices. The Insignia is solidly built, well-equipped and has a peppy turbo engine.

SUBARU OUTBACK 2.5IS

S$129,800 with COE

A raised station wagon with rugged looks, the Outback is a rare sight on Singapore roads, but it does offer Subaru’s unique engineering philosophy with plenty of load-lugging practicality. A boxer configuration engine helps make it different without being weird.

CITROEN GRAND C4 PICASSO 1.6 THP

S$132,988 with COE

This quirky French Multi Purpose Vehicle (MPV) packs seven seats into an unusually stylish package, with plenty of emphasis on safety. A clattery (but frugal) diesel engine was a put-off, but this newer turbo petrol version is much more appealing.

VOLKSWAGEN GOLF 
SPORTSVAN HIGHLINE

S$130,800 with COE

Think of the Sportsvan as a roomier sibling to the common Volkswagen Golf (or think of it as VW’s answer to the Mercedes B-Class). It’s not a large car, but it feels like one inside. The Highline model adds posh equipment like GPS navigation and a panoramic sunroof.