Here Are 5 Factors You Should Know
If there’s one thing that Singapore is known for—apart from banning chewing gum–it’s having ridiculously expensive cars. They are so expensive! In fact, the cheapest model available in 2017 is the Mitsubishi Armitage, will set its prospective owner back $79,999.
That’s more than a 2017 Range Rover Sport, and TWICE as much as a Land Rover Discovery Sport will cost in the USA. And this doesn’t number doesn’t even account for fuel, insurance or the COE (Certificate of Engagement), which can cost almost as much as the car itself and without which you can’t even drive on public roads..
However, these exorbitant prices are purposefully put in place by the Singaporean government to discourage people from owning cars, and instead use the (rather brilliant) public transportation system.
But if your heart and mind is set on buying a car, then here are 4 things that you should keep in mind when setting your budget.
1. The Certificate of Entitlement (COE) and Vehicle Quota Scheme (VQS)
The certificate of entitlement is represents the rights to vehicle ownership and to use the limited road space available in the country for a period of ten years, after which it expires and you can renew it for another five or ten years.
Though the certificate can be factored into the car’s price, it is usually acquired on an open bidding online that takes on the first and third Monday of every month and goes on for two days.
The bids are highly competitive as only a certain number of them are released each month and they even more expensive, with the certificate itself costing almost as much as a car itself. In November 2016, the COE premium was $56,000! The category A COE, meant for smaller cars up to 1,600cc and 130bhp, fell to $48,000 from $50,951 two weeks ago – a fall of nearly 6 per cent and also the second straight drop.
2. Taxes and Registration Fees
All vehicles that come into Singapore are automatically stamped with a 41% duty. There is also a registration fee of $1000 for private cars and $5,000 for company cars. Then, when a car is first registered, whether it’s new or used, an additional registration fee of 150% of the car’s Open Market Value is to be paid. These further inflate the costs of cars in Singapore compared to other markets.
3. Electronic Road Pricing (ERP)
This was implemented to help alleviate traffic during peak hours. The system is installed on all roadways that lead to Singapore’s central area and the Gantries get photos of the licence plates of all cars entering the area and charge the owners.
The system was very effective in reducing traffic congestion in the city, causing a reduction by around 25,000 vehicles during rush hours.
However, for drivers, the system is quite expensive to install and run. The In Vehicle Unit (IVU) costs $150 and is mandatory for all cars that want to use the priced roads. Then the costs of passing through each gantry vary depending on the amount of traffic, but a good estimate is costs range from around $2 per gantry up to $15. (Note that there can be up to 5 on one road leading to the city centre.)
The system is install in all cars, new vehicles must have It install.
4. Road Taxes
Road taxes are renewable every 6 or 12 months, and a valid vehicle inspection certificate is necessary. For vehicles ranging from 3 to 10 years old, an inspection every 3 months is necessary. You have to inspect any car over 10 years old annually.
There are also a number of different tax schemes to encourage green growth which we will cover here.
Vehicular Emissions Scheme (VES)
In order to encourage drivers to switch to less environmentally destructive models, the VES is introduced. It takes into account the emissions of four pollutants: hydrocarbons, carbon monoxide, nitrogen oxide, particular matter, and carbon emissions.
Even electric cars are not immune from this tax, as they consume power which at the source produces CO2. What happens in their case is that they take the total amount of emissions produced during the manufacturing process into account and then charge based on that.
Carbon Emissions-Based Vehicle Scheme (CEVS)
This is similar to the VES above. Its main purpose is to encourage consumers to shift to low emission means of transport. But is simpler in that it only takes into account the carbon emissions and fuel emissions.
Cars with low carbon emissions will qualify for rebates. While cars with a high carbon emission will have to pay a surcharge during registration. There’s also the thing about having to make things go better
Much more in-depth information about tax structures can be found here.
5. Used Cars
As mentioned at the start of the article, buying any kind of car here is a massive investment here. But you may have noticed that the prices mentioned were only for brand new cars. You may opt to choose a second hand car whose value has depreciated. But even for these, the prices are ridiculously high, hovering around $30,000 – $40,000.
And in addition to the still high prices, there are very many risks associated with used cars. Increased risk of buying refurbished, damaged, or even written off cars which the sellers advertise as perfectly fine, expired warranties. You may also have to re-buy a certificate of entitlement (COE) if it has expired. What’s worse is that it will still be the same price as it will for a new car.
So from here, you can see that owning a car is very expensive in Singapore. After paying all these costs, you will still have to deal with the traffic, fuel, insurance, and other ownership costs. To be honest, there are not enough advantages to warrant owning a car over using a bus, taxi, MRT, or any other public transport system to get yourself around the city.
If you are looking to get a car but do not have enough cash for the down payment, you can get a loan from licensed money lenders. We have manage to find the best moneylenders in Singapore (according to us)! If you want to have access to our secret list of best moneylender in Singapore, check it out here!
If you have never taken a loan before and have some questions, you can call us at +65 6871 4268 and our friendly staff will be on the other line to answer you.