A Guide to Car Ownership in Singapore

Car ownership in Singapore is a luxury rather than a necessity, thanks to the city-state’s efficient public transportation system and well-planned urban infrastructure. However, for those who prefer the convenience and comfort of owning a car, navigating the process can be complex due to Singapore’s unique policies and high costs. This guide will walk you through everything you need to know about car ownership in Singapore, from purchasing a vehicle to understanding the associated fees and regulations.

1. The Certificate of Entitlement (COE)

What is COE?

The COE is a permit that allows you to own and use a vehicle in Singapore for 10 years. It is a key component of Singapore’s vehicle quota system, designed to control the number of cars on the road.

How to Get a COE:

- COEs are allocated through a bidding system, which takes place twice a month.

- You can bid for a COE yourself or through a car dealer.

- COE prices fluctuate based on demand and supply. As of 2023, COE prices can range from SGD 50,000 to over SGD 100,000, depending on the vehicle category.

COE Categories:

- Category A: Cars with engines up to 1,600cc and power output up to 97kW.

- Category B: Cars with engines above 1,600cc or power output above 97kW.

- Category C: Goods vehicles and buses.

- Category D: Motorcycles.

- Category E: Open category (can be used for any vehicle type).

2. Purchasing a Car

New vs. Used Cars:

- New Cars: Purchasing a new car is straightforward, but it comes with a higher price tag due to the COE and Additional Registration Fee (ARF).

- Used Cars: Buying a used car can be more affordable, but you’ll need to check the remaining COE validity and the car’s condition.

Costs to Consider:

- Additional Registration Fee (ARF): A tax based on the car’s Open Market Value (OMV). The ARF can range from 100% to 220% of the OMV, depending on the car’s value.

- Excise Duty: 20% of the OMV.

- Goods and Services Tax (GST): 8% of the OMV plus excise duty.

- Dealer’s Margin: The profit margin added by the car dealer.

Financing Options:

- Most buyers opt for car loans, which typically cover up to 70% of the car’s price for new cars and 60% for used cars.

- Loan tenures are capped at 7 years for new cars and 5 years for used cars.

3. Ongoing Costs of Car Ownership

Road Tax:

- Road tax is calculated based on the car’s engine capacity and emissions.

- For example, a 1,600cc car may cost around SGD 500 to SGD 1,000 annually.

Insurance:

- Car insurance is mandatory in Singapore. Premiums depend on factors like the driver’s age, driving experience, and the car’s make and model.

- Comprehensive insurance can cost anywhere from SGD 1,000 to SGD 3,000 per year.

Fuel Costs:

- Singapore’s fuel prices are among the highest in the world, with petrol costing around SGD 2.50 to SGD 3.00 per liter.

Parking Fees:

- Parking fees vary depending on the location. In central areas, expect to pay SGD 1 to SGD 3 per hour.

Electronic Road Pricing (ERP):

- ERP is a congestion pricing system that charges drivers for using certain roads during peak hours. Fees range from SGD 0.50 to SGD 6 per gantry.

4. Vehicle Maintenance and Servicing

- Regular maintenance is essential to keep your car in good condition.

- Servicing costs depend on the car’s make and model but typically range from SGD 200 to SGD 500 per visit.

- Singapore has many authorized service centers and independent workshops to choose from.

5. Renewing or Scrapping Your Car

COE Renewal:

- After 10 years, you can choose to renew your COE for another 5 or 10 years by paying the Prevailing Quota Premium (PQP), which is based on the average COE prices from the previous three months.

Scrapping Your Car:

- If you decide not to renew your COE, you must deregister and scrap your car.

- You may receive a PARF (Preferential Additional Registration Fee) rebate if your car is less than 10 years old.

6. Alternatives to Car Ownership

Given the high costs of car ownership, many Singaporeans opt for alternatives:

- Public Transport: Singapore’s MRT and bus systems are efficient, affordable, and well-connected.

- Ride-Hailing Services: Apps like Grab and Gojek offer convenient and cost-effective transportation options.

- Car-Sharing Services: Companies like BlueSG and GetGo allow you to rent cars by the hour or day.

7. Tips for Expats

- Understand the Costs: Be prepared for the high upfront and ongoing costs of car ownership in Singapore.

- Check COE Validity: If buying a used car, ensure the COE has sufficient validity.

- Consider Alternatives: Evaluate whether public transport or car-sharing services meet your needs before committing to car ownership.

- Stay Updated: Keep track of changes in COE prices, ERP rates, and other regulations.

Conclusion

Car ownership in Singapore is a significant financial commitment, but it offers unparalleled convenience and comfort. By understanding the COE system, calculating the costs, and exploring alternatives, you can make an informed decision that suits your lifestyle and budget. Whether you choose to own a car or rely on Singapore’s excellent public transport, the city-state ensures a smooth and efficient travel experience. https://hk-wanderlust.com/