Buying a car in Singapore

After getting a driving license, the next step would be getting a car. When buying a car in Singapore, potential car owners should think of the immediate and long-term cost of owning a car throughout the years.

Administrative procedure

The buyer will need to book the car of their choice using their I/C. They will also need to provide their income proof, to make sure that they are capable of taking on a loan to buy the car.

The purchasing process can range from 2 weeks to 6 months.The purchase is confirmed when a booking fee is paid. The booking fee is approximately S$2,000, subject to the car model. The rest of the payment is made upon the successful bidding of the COE (Certificate of Entitlement) and 1 week before the car collection.

Upon purchasing the car, the owner will need to register the car so that they can be charged accordingly for their taxes. These taxes are also known the Additional Registration Fee (ARF). The initial selling price of the car will affect the ARF. Registration can be done by the car dealer using the LTA e-Service. Alternatively, new car owners can register by going to the LTA Customer Service Centre at 10 Sin Ming Drive, Singapore 575701 (nearest MRT Marymount). Individuals are required to bring the following documents:

• Identity card
• Car insurance certificate
• Notice of Vehicle Approval Code (VAC)
• Inward Cargo Clearance Permit (CCP)
• Original manufacturer’s invoice

For car registration, an administrative fee of S$25 (not inclusive of GST) will be incurred.

Immediate costs of buying a car

The immediate costs of buying a car in Singapore as illustrated on a 2017 Toyota Corolla Altis 1.6 . Infographic from MustShareNews.

When purchasing a car, there are different types of fees to pay. These factors make up the immediate cost of buying a car.

Bearing in mind the additional cost factors, a car with an OMV of S$50,000 will have a total base price of approximately S$153,079 = S$50,000 (OMV) + S$220 (RF) + S$62,000 (ARF) + S$10,000 (Excise Duty) + S$4,200 (GST) + S$26,659 (COE).

Factors	Details
Open Market Value (OMV)	The initial selling price of the car without any additional costs.
Registration Fee (RF)	S$220
Additional Registration Fee (ARF)	The ARF is significantly more expensive than the RF. The more expensive the car, the higher the ARF. First S$20,000 of OMV, the ARF rate is 100%. Eg. A car that costs S$18,000 will have an ARF of S$18,000 (100% x 18,000) Next S$30,000 of OMV, the ARF rate is 140%. Eg. A car that costs S$50,000 will have an ARF of S$20,000 (100% x 20,000) + S$42,000 (140% x 30,000) = S$62,000 Above S$50,000 of OMV, the ARF rate is 180%. Eg. A car that costs S$90,000 will have an ARF of S$20,000 + S$42,000 + S$72,000 (180% x 40,000) = S$134,000
Excise Duty	The Singapore customs charges an excise duty that is 20% of OMV. Eg. A car that costs S$50,000 will have an excise duty of S$10,000 (20% x 50,000).
GST	There is a 7% GST on the OMV and Excise duty. Eg. A car that costs S$50,000 will have a total GST charge of S$3,500 (7% x 50,000) + S$700 (7% x 10,000) = S$4,200
Certificate Of Entitlement (COE)	Those with a COE are allowed to own a vehicle and use Singapore roads for 10 years. COE prices are usually very high due to the limited supply released by the government and the excess demand from the public. COE prices change from month to month. As of March 2019, the prices are as such: Category A (Cars 1600 CC below & Taxi) - S$26,659 Category B (Cars above 1600 CC) - S$39,401 Category C (Goods Vehicle & Bus) - S$27,021 Category D (Motorcycles) - S$3,602 Category E (Open) - S$41,000 When a COE expires, car owners have the choice of de-registering their vehicle or to renew the COE for another 5 or 10 years by paying a Prevailing Quota Premium (PQP). The PQP of a vehicle is costs more or less the same as the original COE price.
Vehicular Emissions Scheme (VES)	VES rebates are given off the ARF if the car emissions do not exceed a certain level. This was put in effect on 1 January 2018.
Local dealer’s margin	Profit which local dealers make for the successful sale of cars in order to sustain their business.
In-vehicle unit fee	This device is used to pay ERP and other relevant road parking charges.
Licence plate number	S$1,300 has to be paid for transferring the old licence plate to the new car. For those that choose to bid for a specific plate number, the cost depends on the popularity and demand for the number.

Long term costs of buying a car

After paying the immediate cost of purchasing a car, there are still certain charges which a car owner will need to pay for throughout the years of owning a car. These can be known as either the long term costs or the ongoing costs.

Electronic Road Pricing (ERP)

The ERP is meant to ease traffic congestion on Singapore roads by charging drivers for using crowded roads during peak hours. A comprehensive list of ERP locations and their respective charges during peak and non-peak hours can be accessed on the LTA website (ERP digital service).

Fuel costs

Different cars run on different types of fuel (such as gasoline, diesel and petrol) and require different amounts of fuel as well. The type and cost of fuel a car consumes can be calculated on the LTA digital service (Fuel Cost Calculator digital service).

Road taxes

Car owners have to pay annual road taxes for their road usage. Road taxes differ according to the vehicle's engine capacity. As of March 2019, the annual road tax for cars of 1600cc is S$744. Individual car owners may calculate their road tax on an online digital service (STCars road tax calculator).

Parking fees

Car owners have to pay parking fees at shopping mall car parks and season parking tickets to park at HDB car parks on a long term basis without having to use parking coupons. Individual owners may apply for season parking on HDB's e-service portal (Season Parking portal).

Repair

Even if the car does not require major repairs throughout the years, it is quite certain that minor repairs will need to be made to the car such as the changing of tyres. Additional costs will also be incurred if the car owner does not wash the car themselves and sent it to the car wash instead.

Car loan repayments

It is difficult to be able to pay the immediate cost of the car in full as it is a hefty sum. Thus, many take up car loans which will be paid back by the owner in installments, with interest included.

Potential car owners can borrow up to a Loan-to-value (LTV) ratio of 70% of the car’s OMV, provided that the OMV is not more than S$20,000. Otherwise, the maximum amount that the owner can borrow would be 60% of the OMV. The maximum loan tenure is fixed at 7 years. The interest rate will depend on the company’s terms and conditions.

Car insurance

Getting a car insurance is compulsory in Singapore and are usually paid by car owners in the form of yearly premiums. The amount of car insurance premiums that car owners need to pay depends on factors like driving experience, car engine capacity and sometimes even age.

Where to buy

New cars

Car dealers have showrooms of cars from various brands. There are also car dealers in Singapore which only sells second-hand cars. Thus, it is important that potential car owners do their research on the types of cars sold at the different car dealers and find one that is most suitable for them to visit based on their preference. To protect themselves from scams, car buyers should research and check on the reliability of the car dealers.

Ubi is an area in Singapore that is populated with car dealers such as Tan Chong Motor sales, Vincar Pte Ltd  and Car Times Automobile Pte Ltd. Alternatively, potential car owners can also visit the Singapore Motor Show which happens on a yearly basis. At the event, many car dealers present car models that are most recent and popular. At the show, car dealers will also have special promotions and deals for car buyers.

Second-hand cars

As for second hand cars, there are second hand car dealers in Singapore such as Speedo Motoring Pte Ltd, Commonwealth Car Mall and Das WeltAuto Singapore. When buying second hand cars, car buyers should exercise their personal discretion to check if the car is well functioning and suitable for them.

Certain things to check for include the used car’s mileage, the number of previous owners and the age of the car. For example, having many previous owners may indicate that there are certain issues with the car. A potential buyer should do a thorough check before purchasing. The age of the car and the years of ownership will indicate how much the car has depreciated in value from its original price.