Wanting to buy a second-hand car in Hong Kong? Due to the large number of people moving in and out of the city in Hong Kong, you can expect to find plenty of second-hand cars available for sale.
Take the time to learn about the used car market in Hong Kong. Used cars in Hong Kong may appear inexpensive, but there are lots of factors to consider.
It’s not just the purchase price you need to consider; but you also need to consider how many previous owners the car has had, whether the car is approaching 7 years old (in which case you’ll need to pay and arrange an annual inspection), and other factors.
Given the number of choices of second-hand cars available in Hong Kong, it’s also a good idea to think about potential resale value as you select your car.
In this article, the topics we will cover include:
- The importance of the number of previous owners
- Maintenance costs
- Why you need to be wary of cars approaching seven years old
- Questions you need to ask the owner when buying a second-hand car
1. Select a second-hand car with few previous owners
It’s critical to focus on the number of previous owners of a second-hand car. In Hong Kong, it’s actually one of the key factors that will determine the resale value.
There is a simple reason why fewer owners is better. It’s because there is a belief in Hong Kong that if a car has had few previous owners, then you can assume the car has been well looked after.
In contrast, it’s considered more likely that a car with many previous owners has been less well looked after. Thus, implying that a larger number of previous owners could mean more mechanical issues down the road.
That’s why you should try to buy a vehicle that has a low number of owners. The first owner is considered to be the owner number “zero.”
2. Watch out for maintenance costs in HK
While it might be easy to buy a good second-hand car at a low price, one of the most important factors to consider is potential maintenance costs.
Maintenance costs are generally higher for European vehicles when compared to Japanese cars.
I have seen a friend buy a luxury European car at a low price, only to then spend three times the value of the initial purchase price in maintenance fees over the next 12 months as various issues popped up.
If you are looking for low maintenance costs in Hong Kong, consider Japanese carmakers. Not only are Japanese cars themselves ultra-dependable, but when it comes time to buy new parts for your car, your wallet will thank you.
3. Only buy a second-hand car in HK with full-service history from an official repair shop
It’s essential to buy a car which has a full-service history. A full-service history should mean fewer maintenance costs for you, and it should also make it easier for you to resell the car at a later date.
It’s better to buy a car that has been serviced by the car maker’s official repair shop. Official repair shops tend to be more proactive about making repairs before significant issues arise.
On the other hand, if you buy a second-hand car that has been serviced by a random, back-street repair shop, it’s likely the vehicle has had minimum repairs done.
Minimal repairs will increase the chance of more significant problems arising as the quality is compromised.
4. Be wary of second-hand cars approaching 7 years old
Vehicles that are seven years and older will need a roadworthiness inspection (MOT) by a government-appointed garage for you to be able to complete the annual registration. For this reason, you will tend to find an abundance of 7-year old cars for sale.
Try to avoid buying second-hand cars that are getting close to 7 years as you may end up spending quite a lot of money getting them maintained so that they can be considered “road-worthy.”
There is so much choice in Hong Kong; you should aim to buy a 2-3 years old car to try and achieve the right balance between the initial purchase price, maintenance costs, and resale value.
5. Buy through individuals rather than dealers
It’s well known that some second-hand dealers in Hong Kong alter (lower) car mileage. For this reason, it’s often best to buy a second-hand car from an individual and, if possible, to buy a vehicle from the first owner of the vehicle.
If you can buy a second-hand car from a friend, then it’s even better. However, we recommend asking how many owners the vehicle has had if you wish to sell it at a later stage.
6. Get the car checked by a reputable, independent mechanic
You should get any vehicle that you are seriously considering purchasing checked by a trusted, independent mechanic.
As we said previously in this article, second-hand vehicles’ prices might appear cheap, but maintenance costs can really add up.
A trusted mechanic will check the vehicle body and structure, electrical equipment, engine, ignition and fuel system, cooling system, air conditioning, transmission, steering system, wheels and tires, brakes, and suspension.
This could save you a lot of time, money, and hassle down the road.
Most importantly, you always need to think about the resale value.
If the car you purchase ends up needing major repairs, not only will you have to pay for the repairs, but all the troubles will be recorded in the service book. These issues could lower your resale value.
7. Questions to ask when buying a second-hand car
- Ask about the vehicle history; mileage, how many owners, and whether the car has been involved in any accidents
- Ask for a full vehicle history report; if a car has had small repairs that are spread out over time, it’s a good sign that the car is well looked after and gets taken for regular repairs. A flood of repairs done over a short period of time is a possible sign of bigger problems down the road
- Find out why the owner is selling the vehicle; are they moving country, or is instead because the car is costing them too much money in maintenance and repairs?
- Ask if it’s possible to take the vehicle for a test drive.
8. Certificate of Clearance
You want to avoid being associated with any unpaid tickets. To prevent this from happening, apply to the Hong Kong Licensing Office to obtain a Certificate of Clearance.
Be sure to finalize this Certificate before you finalize the purchase. The Hong Kong government won’t charge you for this certificate, and it will remain valid for 72 hours.
9. Car Insurance
Before you finalize the purchase of your second-hand car in Hong Kong, don’t forget that it is required by law to have either your own fully comprehensive motor insurance or, at the least third-party insurance cover.
If you don’t have insurance organized, it’s illegal for you to be on the road.
The punishments for not following this law are strict, with fines up to 12 months in prison. The punishment for ignoring the requirement for a compulsory third-party policy can include a fine, a driving ban, and prison time.
And you can’t just carry over the car insurance from the previous owner. All new owners must organize new insurance that has been applied and purchased under their own name.
10. Know the market
The last point we wanted to highlight is the importance of understanding current market prices for second-hand cars in Hong Kong. A particular deal might sound good in isolation, but how annoyed would you feel if you find out later that you paid more than the market price?
There are plenty of websites with car classifieds. Do your homework to find out what typical prices are for the models you are interested in.
There is a huge second-hand market for all carmakers, including Tesla, Porsche, Audi, BMW, Lexus, and Mercedes Benz. With a little research, you are sure to find a huge amount of information about pricing for each particular model.
What are the options available in Hong Kong when it comes to buying a car?
You can buy new directly from a dealership, second hand from a private owner, or a second-hand dealer. While brand new cars will come with a manufacture’s warranty, Hong Kong has one of the highest new car taxes in the world, so buying brand new is expensive.
The second-hand car market in Hong Kong is huge. Plus, cars in Hong Kong tend to be very well-maintained and have low mileage. You will be spoilt for choice.
What are the best places to buy a second-hand car in Hong Kong?
Keep your eyes peeled on Facebook; people come and go from Hong Kong frequently, you’ll likely see good quality cars pop up being sold by people who find themselves suddenly leaving Hong Kong. You can probably find a deal via this method.
The Automall in Harbour Road Wan Chai is another good option. The Automall has many quality cars located super conveniently right next to the Grand Hyatt Hotel. Stroll around, take your time, and get a good sense of market prices. A trip to this basement car-parking lot will put you in a much more knowledgeable position very quickly.
Vin’s Motors is another second-hand dealership that is popular and comes highly recommended.
Do I need a car in Hong Kong?
The answer to this question is probably not. While having a car can be convenient, especially if you are lugging small kids and many items around, the bottom line is that Hong Kong’s public transportation is excellent and inexpensive. Besides, taxis in Hong Kong are relatively expensive, and parking is super expensive, just about anywhere in Hong Kong. Owning a car in Hong Kong is considered a luxury and not a necessity.
Is third party insurance necessary in Hong Kong?
You will need to organize third party insurance before you finalize the purchase. Only once you have purchased insurance will you be able to complete the transfer of ownership. The cost of the third party insurance will depend on the size of the engine, the type of car, and the number of previous owners.
What are the car taxes involved with owning a car in Hong Kong?
For new cars, you’ll need to pay a First Registration Tax. This fee can be very high and is generally based on the car’s published retail price. Note, this First Registration Tax can be lower for environmentally-friendly cars (i.e., lower emissions vehicles). Other fees related to owning a car in Hong Kong include; fees for renewing your driver’s license fee and third-party insurance costs. If your car is older than six years old, you will need to pay for it to get an annual checkup.
Where can I buy car insurance in Hong Kong?
We have an article which is dedicated to the topic of buying insurance products in Hong Kong. Our advice for purchasing car insurance is to use an insurance broker so they can scan the entire market and find the best insurance product for you. You can expect different insurance companies to offer both different policies and different pricing. The devil is in the detail. Take the time to know what the policy actually covers. We personally aren’t keen on talking to insurance brokers who only sell a single brand of insurance products. The more you can learn from your insurance broker about the entire insurance market, the better off you’ll be.
We hope this article helps you when you’re buying a second-hand car in Hong Kong. With so many second-hand cars available in Hong Kong, take the time to understand the market.
If you accept the first seemingly good deal, you may end up kicking yourself later. Don’t forget that you’ve got plenty of options, do your homework, take your time, and you’ll be sure to find a great deal.
If you’ve just moved to Hong Kong, check out A Guide for Newbies in Hong Kong. We cover topics such as selecting insurance products in Hong Kong, the best places for buying second-hand goods, the best furniture stores in Hong Kong, and tips on selecting an apartment.
- Best places to buy second-hand items in Hong Kong
- Guide on buying insurance products in Hong Kong
- How to find an apartment in HK