tzlee.com/blog

Author: Justin Lee

  • Screw you, PayPal. You are off my list.

    I am absolutely pissed. If I’m an ass I can basically go and reverse any PayPal purchases I’ve made and I’ll get away scott-free thanks to their “consumer protection” policy.

    I’ve had customers who received their orders, signed on the SingPost consignment note and then later did a charge back on their cards. Not only did PayPal honor the payment reversal, they still charged us the payment processing fee.

    This means if the transaction was $1,000, I not only lose $1,000, I’ll still have to pay PayPal ~$40 (~4%) for payment processing. What kind of logic is this?

  • Why is everybody building an iPhone app?

    I’ve had many many self proclaimed wannabe entrepreneurs approaching me with “compelling” iPhone app ideas, and oh, it’s top secret – before they breathe a single word about it I’ll have to sign a 3,112 page NDA so in an event that somebody else has the same idea I can be brought to court and made to compensate billions.

    What is it with iPhone apps, really? Even SMRT released an app and had a press release for it. For what? Can’t they just post disruptions on Twitter and Facebook – which I think they already do? Why build an app? They think my grandmother has an iPhone? An app is not the solution. A proper announcement system and staff training is.

    The phone and mobile apps are just technologies and delivery mediums. Building a product around a technology is a wrong start. Technology should be built around a product instead. A lot of “app” pitches I’ve heard have no real value. Technology alone does not sell a single cent. It must solve a real world problem. Would you buy an app because it could, for example, switch on your microwave at home? Has remotely switching on a microwave been a need for housewives?

    If you’re reading this and thinking of building an app, please look at the product as a whole. If it’s just another one of those apps, I think you may be better off spending your time and money (app developers charge a really crazy sum BTW, just because it’s HOT) building a real product with a HTML5 site that will truly scale when the need arises… at a fraction of the price. If you are a business owner, don’t derail your core business by focusing on apps and whatever technology trend that comes along.

    Sometimes no technology is the best technology.

  • What does it really cost to own a car in Singapore?

    Update: Do also read the updated article I wrote here in 2014: How to buy a used car in Singapore

    OK, I read this article and felt I had to put in a few words of my own as it was not accurately represented.

    Before I move on, those who are not familiar with the basic taxation structure for cars in Singapore should read my earlier blog post.

    If you have understood the taxation structure in Singapore (I know, it’s a lot to swallow) you would realize that the author of the above article failed to take into account the minimum PARF rebate. The author also picked a car that’s way overpriced in the current market.

    Here’s the facts. A savvy car buyer would have looked at all available options. And to pick a Toyota Altis at the price of $105,988… are you out of your mind?

    Let’s take a Volkswagen Jetta. List price $115,800. Called VW, they have a $6,000 discount. So that brings the list price down to $109,800.

    The OMV of this car is $18,500, so that gives us a $9,250 PARF rebate (50% of OMV). The straight-line depreciation of the car over 10 years is hence $109,800 – $9,250 = $100,550.

    Now, that’s just the car. All taxes inclusive – GST, etc. are already priced into the list price.

    Next, the loan. Assuming if you’re buying a ~$100k+ car, you should must have some cash for downpayment. A wise tip here – at least downpay the minimum PARF rebate and don’t take a full 10 year loan or you will be in serious debt in an event you need to sell your car. If you don’t even have cash for downpayment – sorry to say but Taxi is your friend for now.

    So let’s say we take a 1.88% (compounded) loan over 8 years for the sum of $100,550, the interest works out to be ($100,550 x 1.88%) x 8 years = ~$15,123.

    Adding that to the original sum of the car you have $100,550 + $15,123 = $115,673. The monthly repayment would be $115,673 / 8 years / 12 months = ~$1,205.

    The rest is pretty straightforward… let’s use a table to add ’em up. Here’s the true month-to-month affordability of a VW Jetta 1.4 TSI as of Jan 2012. Note some variables like insurance, parking and ERP really depends on each individual’s profession and usage of the car.

    Item S$/mth
    Loan installments $1,205
    Insurance @ $2,400/yr, no NCD $200
    Road tax @ $620/yr $52
    Fuel @ 20,000 km/yr, 13km/l @ $2/l $256
    Servicing @ $800/yr $67
    Parking (HDB + Office) $200
    Others (ERP, etc.) $100
    Totals $2,080

     

    Now, that’s $2,080 for a VW Jetta. So by wise financial guidelines that you should not spend more than a third of your salary on a car, you (or your family) should take home at least $6,000 to buy a car like that…

    What if you (or your family) only take home $4,000 a month? Under $1,500 a month for a car… is it achievable? Answer is… YES! Pick up a 2005 Nissan Sunny for $23,800. Bargin a little bit and bring it down to maybe $23,000… and here’s the calculations.

    Actual car depreciation (2005 cars retain 55% of OMV) = $23,000 – ($13,000 x 55%) = $23,000 – $7,150 = $15,850.

    Loan = $15,850 over 3 years @ 1.88%: $15,850 (principal) + $893.94 (interest) = ~$16,744. This works out to ~$465 per month.

    Item S$/mth
    Loan installments $465
    Insurance @ $2,000/yr, no NCD $167
    Road tax @ $742/yr $62
    Fuel @ 20,000 km/yr, 9km/l @ $2/l $370
    Servicing @ $800/yr $67
    Parking (HDB + Office) $200
    Others (ERP, etc.) $100
    Totals $1,431

     

    I know what some of you may be thinking – it’s just $600 more a month, why not get the Jetta. Well, $600 can kill you – that’s $7,200 a year. I eat about $600 per month on average so it really makes a lot of difference. I can either eat plain bread or have good meals or I can save that and go for a crazy vacation. It’s all about balance.

    Of course on top of just plain numbers, the value of having the convenience of a car is hard to quantify – especially if you have a pregnant wife, or an old folk, or just simply need to haul that big box from Ikea.

    Public busses and trains aren’t fair comparisons as they are mass public transit and may not bring you to your doorstep. Taxis on the other hand are getting relatively expensive and inconvenient – the queue, the wait, etc.

    So if it doesn’t break your bank – for better quality of life you should consider a car.

    At the end of the day… buy wisely, drive safely. Cheers!

    – Justin

  • Used Car Prices are Coming Down

    As predicted, it’s happening. Used car prices are coming down. It may be partially due to the fear of an impending economic crisis but I believe the problem is more micro than that.

    I’ve been watching the market for a while and there are many cars sitting at the stealer(dealer)ship for months. A lot of people are selling their cars either because they want to make a quick buck or because they got an impressive overtrade for a new VW or BMW. Whatever the case is, the used vehicle population is only growing.

    Right now there’s 22,283 used passenger cars on the market in sgCarMart. There’s currently about 600,000 passenger cars on the road and that makes up nearly 4% of the car population. Based on COE current quota allocations, this is about a years’ supply of vehicle for the entire nation. If the average vehicle depreciates about $7,000, the entire used car market stands to lose a total of $13m every month.

    Let’s check back in 1-2 months and see how this vehicle population has changed.

  • Buying a Used Car in Singapore

    Update: Do also read the updated article I wrote here in 2014: How to buy a used car in Singapore

    I saw this discussion and couldn’t help but write a short blog entry on this.

    If you’re ever buying a used car, you need to set your expectations right. Ask yourself – why did the car get so much cheaper after the first owner and even more so after its first three years? That’s because the warranty’s over and the first owner has farted all over it.

    Here’s some quick tips for the potential used car buyers.

    • Buying a used car is not like buying a new car. Don’t bother negotiating for freebies and warranty. True warranty for used cars hardly exists. Negotiate for price, save the extra cash for repairs, and most importantly – do your homework. Don’t stop at one shop.
    • STA is good for chassis inspection, i.e. if it has been in any major accidents that has compromised the main structural strength. If you get A or B grade, then the car is in good shape. Never accept anything with a C and below.
    • Don’t trust the mileage – even on high end continental cars this is reprogrammable for a fee. Afterall, it’s just a damn computer! Look for obvious signs of wear in other areas like steering wheel, seat belts and gear knobs. These are usually costly to replace and dealers don’t replace them.
    • Don’t look at superficial stuff. Dull paintwork can be fixed with a polishing job. Poor upholstery can be re-wrapped. That stench in the car is easily fixed if you just get the upholstery  and carpets removed and washed.
    • During the test drive make sure you test everything. Request for a longer route so the engine warms up. Shift through all the gears including reverse and look out for rough shifts. Turn off the air-con and radio to listen for noises. Turn the steering left and right and check for noises or free play. Let the steering go free on a straight road to see if the wheels are tracking straight. Go over humps and see if the suspension has gone bad. Get on the brakes at both low and high speeds and look out for vibrations that may indicate a warped brake discs. Accelerate suddenly then let the throttle off and see if the engine stalls. Don’t turn off the engine after a test drive – pop the bonnet and listen to the engine run at idle. Look for oil or coolant leaks under the car.
    • Be prepared to have it serviced and repaired the moment you buy it. Cars are mechanical and there will certainly be  wear and tear. Do you think the previous owner bothered to service the car when they know they’re about to sell them? Have timing belts changed, oil and other fluids changed for a peace of mind.
    • Do your research. I can’t emphasize more on this. If you are intent on buying a specific model of car please join the various car forums and learn about the common issues of the car and look out for them.
    • Do your math. Don’t buy something that burdens you. Make sure you are able to finance it and sell it without having to cough up more cash. Usually this means taking a shorter loan term and paying a decent down payment in the region of $10,000 or about half the OMV.

    Once you’ve made the purchase, the most important thing is to enjoy the ride and just fix the problems that come. Take it as a learning experience and I believe you will be happy with your second hand motor for few good years ahead.

  • COE: What goes up, must come down.

    The first round of November 2011 COE hit a 17-year high of $78,001. Believe me – what goes up, must come down.

    My analogy is that COE prices will continue to rise to such a level that many people will stop buying new cars. At this point the 2nd hand market would have also been flooded with those trading-in/making a quick buck selling their cars.

    People looking for a bread and butter car will be buying used cars but there will be a point when the market gets flooded with overinflated used cars because the used cars dealers will continue to raise their prices in tandem with the rising COE prices. Used cars will become illogical to purchase at those prices given the amount of risk(s) involved, such as accidents and mechanical issues.

    Used car dealers will eventually be stuck with excess stock and there will be price war. A few used car dealers may even wind down due to inability to pay the financing for the cars in their showroom (they are usually on loan). Some people who lost money in the recent downward spiral of the stock market would also be forced to sell or auction their cars for cheap.

    When all these happens the prices of used cars will start to come down. People will then again flock to the used cars. But there isn’t enough new car buyers to trade in their old cars. New car dealers will be in trouble when this happens and down comes the price of COE.

    Don’t buy a car now if you can wait another year… trust me.