Sunday, April 14, 2013

An RX-8 For Less than a Vios

Update: 16 Apr 2015

It has been almost exactly two years since I first wrote the blog post below. Since then, a few LTA rules changed, and the COE prices have fluctuated while remaining pretty high. My car-culator tool was replaced by CarIQ. But one thing remains constant: the RX-8 is still cheaper than a Vios! Here is a comparison of the cheapest Mazda RX-8, Mazda 3 and Toyota Vios currently on the market (all registered in 2007), and the car with the lowest annual cost is an RX-8. However, it costs about $4000 more per year than 2 years ago!

Original Post: 14 Apr 2013

After my previous post on Buying a Used Car, some people asked if an RX-8 can really cost less than a Vios. So here are the detailed calculations. (Doing these calculations also made me realise that prices have really dropped after the new cooling measures! I bought my car the day before they were announced ...)

The Mazda RX-8. Built in child-locks make an excellent family car.

 First, the listings from SGCarMart. RX-8 lists at $39,800 vs $29,345 for the Vios. Both are 2006 models (about 3+ years remaining).

Next, we pop the essential data into the Car-culator.

And ta-da! The annual cost of the RX-8 is $7,647 vs $7,389 for the Vios.

Ok, well the RX-8 didn't exactly work out cheaper, but would you be willing to pay $20 more per month for an RX-8? (And I definitely did find RX-8's for cheaper than a Vios in my previous research.)

I should add a few caveats for full disclosure. First, my app does not take into account fuel consumption, and the RX-8 will definitely consume more petrol, the final cost depending of course on your usage. Second, the RX-8's rotary engine is more expensive to maintain. I was advised by my Mazda salesman friend to budget about $2k for repairs to a used car, but this increases to $3k for an RX-8.

Why would you settle for this?

Friday, April 12, 2013

Buying a Used Car in Singapore

The cost of car ownership in Singapore is horribly confusing - and risky. And a key factor people often overlook in the cost of ownership is how depreciation and road tax vary between similar cars. Understanding this is crucial in finding a good bargain on a car.

I started learning the intricacies of second-hand car pricing when I started shopping for my own car recently. Probably as a legacy of my Wharton education, I am incapable of making any major financial decision without a spreadsheet, and so I got to work studying the tax structure for cars in Singapore, and trying to work out what kind of car would fit my budget. It's a very simple question really, but a fair bit of work. You know much you are being charged for the car, but how much do you get back when you sell/scrap it? Then divide the difference by the term of ownership to work out the annual cost (mainly the depreciation, road tax and fuel costs). There are other calculators out there that help to work out things like how much the car loan will cost, but I was more concerned with the immediate question: which car is the best value of money?

Early on, I came to some very interesting conclusions.

First, the annual cost of used cars is fairly homogenous (despite differences in selling price). This is rather counter-intuitive, but I discovered that the annual cost of cars of a similar size is actually very similar, especially toward the tail end of their lives. If you buy a car 7 years or older, it should cost you somewhere between $7k to $8k a year. (This is down from $9-10k before the new MAS ruling.) It doesn't matter if it is a Toyota Vios or a Mazda RX-8. So although the price of the RX-8 is much higher than the Vios, for example, you get most of the difference back at the end of it's life because of the RX-8's high OMV (see detailed calculations here). It is a similar situation for larger cars, although of course the price range is correspondingly higher. I immediately set about convincing my wife that the RX-8 was indeed the family car we had been looking for all along ...

Second, the cost difference between similar models drops over time. The price of a Mazda 3 and Mazda 6 are almost the same at the 7th year. The main difference in annual cost is the road tax and fuel consumption. Similarly, the cost of a BMW 3, 5 or 7 series will converge. This is because the OMVs of these cars are not much different, but there is a large markup on the higher models in the showroom. As the car gets older, the difference imposed by this markup shrinks as it approaches the paper value which is based on OMV.

With these two discoveries, I don't think I will ever buy a new car again. The markup on the new car is just ridiculous, and you can really get some good deals buying second hand, especially if you are looking for the higher end models. However, it also boils down to your ability to assess the reliability of a used car, and to find a good price.

Third, and most important, despite the convergence in ownership cost, it is possible to find outliers on the low end. This is where the math and hard work came in. By plugging every listing that interested me into my spreadsheet, it was quite obvious which cars were terribly overpriced and in a few cases, to identify some really good bargains! These were the ones I checked out in the showroom, to determine if they were cheap because of defects, or if they were just a good bargain. And that is how I found my Mazda 3 in the space of about 2 weeks. Almost 2 months on, I am still extremely pleased at the purchase, with an annual depreciation of only about $5,600, the car is in excellent condition. (Even with the recent price drop, this is still an excellent deal!)

I put all that I had learned into a simple Android App. This is the app I had tried to find while buying my own car and was shocked that none existed. So I resorted to spreadsheets first. It is such a simple thing, but no one has done it; so after buying my car I decided to build it myself. Because LTA has been unwilling to release any test data to me (citing privacy concerns), I had to resort to going from car to car in Turf City, comparing the calculations. After more than 1000 users tried it, so far so good!

You can find the app here:

See also the tutorial for more details on the Car-culator including screenshots and a quick description of how to use it.

Updated 29 November 2014:
You may also wish to try the latest version of Car-culator, which works on any browser on your phone or computer. It is still included among the suite of tools provided by CarIQ that is still under development, but already has all the features of the first version, and many more including the ability to import a listing from sgcarmart or oneshift, and to save your favourite cars for comparison shopping. Comments, feedback and suggestions on how to make it better are welcome at the release page (please don't post them here), which also contains the tutorial on how to use it.

Sunday, April 7, 2013

Fun with QR Codes

QR Codes are an ingenious way of distributing hard-to-remember data. You usually see QR codes on display ads directing you to a certain website, or to download a smartphone application. All you need to access these is a Barcode Scanner app

But the uses of QR codes go beyond that. Some of my personal favourites include:

1) Wifi Login – How many times have you had friends come over who want to connect their tablet to your home network? Then you either have to tell them, or key it in for them. With a QR code, just print it out and put it in a convenient location. If someone asks for your network details, you can just hand them the code to scan. With this, you can even hide your SSID for greater security.

2) Contact Details – Why not print one of these on the back of your namecard?

3) VCalendar Event – If you are trying to publicise an event, a QR code will allow interested parties to scan the event right into their calendars. This way, you eliminate the risk of people getting a date or time wrong.

4) Google Maps Location – Similar to the above, you can easily encode a location into the QR Code, to ensure people go to exactly the right place.
Here's my favourite budget vietnamese eatery

5) Plain Text – I’m not quite sure why anyone would do this, but a QR code can store up to 4296 characters of data, so it gives you significantly more to say than a tweet.
For the above functions and more, the best place to go is There, you can not only generate the QR Code, but stylize it and turn it into all sorts of cool products.

I recently realized that most of my SAF colleagues have no idea what a QR code is despite them being around for quite a long time. I suppose it is not surprising since most do not have camera phones, so now you know one of the good things you are missing out on! It is high time our IT security policies are reviewed to keep up with the times!