Are Japanese Cars Always Better Value For Money? Why I Always Shortlist A 2nd Hand Continental Car

In Singapore, there is an evergreen, and sometimes heated debate between whether a Japanese car or Continental car is better value for money. For reasons stemming from perceived reliability, car servicing, cost of spare parts, and what people read on online forums, the general sentiment would indicate that a Japanese car is always better value for money. While Japanese cars do generally present a very sensible ownership package, are they always better value for money? The short answer is - No. Not always. Here are some factors for your consideration.

In this segment, we take a quick look at two case studies, comparing Japanese cars and Continental cars in the same segment, and compare key financial and performance figures. To maintain as fair a case study as possible, the cars selected for these case studies are from the same second hand car dealer. For ease of comparison, the two cars in each case study are also of a similar age. For this comparison, I have gathered some key figures from current used car listings from Carousell. All figures pulled for use in the case studies are accurate at the time of writing. Images of the actual units have been omitted to maintain anonymity.

2016 Audi A4 Sedan 1.4 TFSI S-Tronic Auto:

Price: $88,800 | ARF: $26,848 | Age: 3 Years 6 Months

Depreciation: [$88,800 (Sale Price) - $13,424 (Scrap Value @ 50% of ARF) ] / 6.5(Remaining Years) = $11,596 per year (Approximate)

2016 Mazda 6 2.0 Sedan Executive (A):

Price: $83,800 | ARF: $23,532 | Age: 3 Years 7 Months

Depreciation: [$83,800 (Sale Price) - $11,766 (Scrap Value @ 50% of ARF) ] / 6.4(Remaining Years) =$11,255 per year (Approximate)

Looking at the figures really quickly here, we can see that the Audi A4 depreciates at a marginally higher rate than the Mazda 6, and costs $5,000 more to purchase outright. If you consider that the Audi A4 is in fact one month younger than the Mazda 6, then this negates the $5,000 outright purchase price by at least 30% - 50%. Assuming equal interest rates are applied on the loan and equal 30% down payment on both cars, there would be a marginal, almost negligible difference in your installment payments per month. However, the scrap value of the Audi A4 is higher by $1,658. That might not seem like a lot, but if you view it from the perspective of recycling your scrap value to fund your next car’s down payment, $1,658 extra added to your down payment essentially means that you are empowered to purchase a car that is approximately $5,526 more expensive (based on 30% downpayment) in terms of sale price value. Lastly, consider the road tax you will pay each year for the remainder of each car’s life. At 1,395cc, the Audi A4 will warrant a road tax of $624 a year, while the Mazda 6’s 1,998cc displacement will warrant a road tax of $1,210 a year. That’s almost double that of the Audi A4.

Before you jump up and say that we can’t just outrightly compare the road tax warranted by two engines with vastly different displacements, we actually can. You see, though the Audi A4 has a much smaller displacement, the power output levels at 147bhp (thanks to a turbocharger) are almost comparable to the Mazda 6’s 162bhp pumped out from its naturally aspirated set up. When you look at torque figures, things get even more skewed. The Audi A4 will generate 250 Nm of torque between 1,500 - 3,500 rpm, while the Mazda 6 will generate 213 Nm of torque from 4,000 rpm. In the real world, this basically translates to a more responsive drive from the Audi A4, better fuel economy, and therefore, better running costs. Contrary to some beliefs, under normal driving conditions, a turbocharger set up that kicks in at 1,500 rpm actually helps the car to get up to speed faster, reducing the need to drag out your revs, leading to better fuel economy. Lastly, let’s also consider that the Audi A4 runs a 7-speed dual clutch transmission, which is designed to not only shift faster, but also under normal driving conditions, shift more frequently, keeping your rpms as low as possible, and your fuel economy as good as possible. On the flip side, the Mazda 6 runs a traditional 6-speed torque converter. Both cars have an almost identical curb weight.

2015 Volkswagen Sharan 2.0 TSI DSG Auto:

Price: $88,000 | ARF: $49,454 | Age: 4 Years 6 Months

Depreciation: [$88,800 (Sale Price) - $24,727 (Scrap Value @ 50% of ARF) ] / 5.5(Remaining Years) = $11,649 per year (Approximate)

2015 Toyota Estima Aeras Premium 2.4 CVT 2WD:

Price: $94,800 | ARF: $32,990 | Age: 4 Years 5 Months

Estima: [$94,800 (Sale Price) - $16,495 (Scrap Value @ 50% of ARF) ] / 5.6(Remaining Years) =$13,983 per year (Approximate)

If the first case study wasn’t pronounced enough, we have an even more jarring example right here. The Sharan is about a month older, and costs $6,000 less to purchase outright. The Sharan also depreciates at more than $2,000 less a year, which assuming equal 30% downpayment and equal interest rates, would equate to a more noticeable difference in your monthly installment quantum. Going back to my earlier point about how using your car’s scrap value to fund the down payment on your next car, you will notice that the with the Sharan, you will get back a whopping $8,000 more at the end of your car’s lifespan. That is some serious financial empowerment for your next purchase, where $8,000 extra in down payment, would enable you to purchase a car that is about $26,000 more expensive (based on 30% downpayment) in terms of sale price value. Road tax wise, the Sharan weighs in at $1,194 a year with its 1,984cc displacement, while the Estima weighs in at $1,638 a year with its 2,362 cc displacement.

Performance wise, this pre-facelift Sharan’s turbocharged engine pushes out 197bhp and approximately slightly less than the 280 Nm of torque at 1,700 rpm you get on the current model. The Estima’s naturally aspirated engine pushes out 167 bhp and about 220 Nm of torque at 4,000 rpm. Once again, this is a case where the more modern set ups (smaller turbocharged engines) found in many continental cars, are likely to present a more responsive drive, along with lower rpms, and better fuel economy under normal driving conditions.

While the case studies seem to point in one direction, the truth is that there isn’t an inherently good, bad, better, or worse car. There are just different cars that suit the needs of different people, and are better at different things. For example, some value safety over price, some value reliability over performance, and some value brand image over practicality. And in that, perhaps there is fundamentally no wrong or right car to buy. But consider a few scenarios. What if, you have ever gone car-shopping with the preconception that a continental car is too expensive to own, and therefore never fully researched and considered the possibility? What if, you’ve heard a friend or colleague say that a car is giving problems, but never considered that they might just be whining about replacing wear and tear parts? What if, you’ve heard someone complaining about gearbox failure, or a catastrophic breakdown, but never considered if the person is properly invested in preventive maintenance, or even changes their transmission fluid regularly? If you’ve ever been blindsided or misdirected by any of these scenarios, then perhaps you might begin to realise that owning a continental car may be more attainable and more reasonable than you think. If you get past that hurdle, then maybe, you’ll find yourself the proud owner of a continental car, one that is well built, luxurious, driver oriented, and with a badge to boast.

I’m not asking anybody to run out there and buy a continental car right away, but keep an open mind towards all cars and take the time to crunch the numbers and do your research. Some units may catch your eye and represent value for money for the luxury and branding offered. Buy what suits your financial and family needs, and what makes you as a driver proud and happy. If at the end of the day, you decide that a Japanese car is still more suitable for you and your family’s needs, then that's the perfect car for you.

In the meantime, there is no harm shopping around for ideas.

#Cars #Autos #SG #Singapore #UsedCars #Buying #Secondhand #Continental #Japanese #Vehicles

Credits: David Foo