The cost of owning a car in Singapore is ridiculously expensive. Conscious with the fact that uncontrolled growth in the number of vehicles on the road can cause massive traffic jams and potential accidents since land is scarce, the government has implemented a range of measures to manage car ownership and usage.
These measures include the Certificate of Entitlement (COE), Vehicle Quota System (VQS), road taxes and Electronic Road Pricing (ERP). All vehicles must be registered at the Land Transport Authority (LTA). Want to know how much it costs to own a car in Singapore? We will have listed the costs down for you.
1. Certificate of Entitlement (COE) and Vehicle Quota System (VQS)
Anyone in Singapore who wishes to purchase a motorcycle or car has to bid for a Certificate of Entitlement. Upon successful bidding, the vehicle entitlement is valid for 10 years from the date of registration of the vehicle.
- To register for a new vehicle, bid for a COE under the appropriate category of your car.
- COE bidding exercises run on the first Monday and third Monday of the month at 12pm and,
- Ends 2 days later on Wednesday at 4pm.
- Bidding for COEs can be done electronically or through a car agent. You may also submit your bids through most ATMs.
- 50% of the bid amount will be deducted from your bank account as a tender deposit.
- Except for companies and organisations, each applicant is allowed only ONE bid in each bidding exercise. Any repeat bids will be rejected. CEOs for most categories are non-transferrable.
- A successful bidder will need to pay the lowest successful bid price, also known as the quota premium (QP). Company cars buy double QP. The vehicle must be registered within 6 months for non-transferrable categories and within 3 months for transferrable categories.
- Current COE rates can be found here
2. Vehicles Taxes and Registration Fees
All motor vehicles imported into Singapore are slapped with a customs duty of 41 per cent and Valorem. There is also a Registration fee that needs to be paid. The fee is $1,000 for private vehicles and $5,000 for company vehicles. In addition, when the car is first registered (whether new or used), an Additional Registration Fee (ARF) of 150% of the car’s Open Market Value is payable. All these make the price of cars here artificially inflated compared to ones in the States or Europe.
3. Electronic Road Pricing (ERP)
Electronic Road Pricing is the government’s latest implementation on controlling traffic on the roads during peak hours. You may have seen plenty of jokes and complaints from locals online about the ERP. ERP is based on a pay-per-use principle that is intended to reflect the true cost of driving. ERP gantries have been installed at choke-points on expressways and major roads, mostly in city areas, in order to ease congestion, especially in the mornings when traffic is the worst and ERP prices are the highest.
All in-vehicle units have now been installed in vehicles and every new car purchased must have one.
4. Road Taxes
Road taxes are renewable either one a 6-month or one-year basis. You can only renew your road tax if your vehicle has a valid inspection certificate. Cars between 3-10 years old must be inspected once in 2 years; cars older than 10 years must be inspected yearly. Motorcycles and scooters must be inspected once a year only if they are older than 3 years. Inspection notices are sent to vehicle owners three months before the expiration of the road tax.
Although a smaller fee, the sum will also always be in the thousands at least, and once your car reaches the big 1 0, the tax becomes more expensive. Tax increases exponentially from the 10th year onwards, 110% in the 11th year, 120% in the 12th year, and so on till 150% on the 15th year onwards.
5. Car insurance
A list of car insurance can be found here. It is mandatory in Singapore for all vehicles to have insurance in order to hit the road. Otherwise, why not ask your family or peers which insurer they use and get an idea of what is needed and an idea of preference.
Buying Used Cars
In Singapore, buying a car is a major undertaking due to the great expense as compared to other countries, especially the States or Europe. True, there is considerable depreciation in the actual value of the car but there are also the pitfalls of potential ‘wrecks’ and write-offs being sold off as supposedly solid pieces of kit.
Yes, you can buy a car that is more than ten years old though finding one with a warranty is difficult. This is because anyone buying a car in Singapore has to pay for the 10-year Certificate of Entitlement (COE) to obtain the car in the first place and then pay the same huge sum again after the 10 years up for renewal.
There is a limited number of COEs allocated each month by the Land Transport Authority (LTA) and demand always outstrips supply, pushing the price up for those who desperately want to win the bid. For cars which are older than 10 years, you are advised to make sure the car has a 10 year COE because a car with a 5 year COE which has expired cannot be renewed.
Why is it Difficult to Find a Car Over 10 years Old with a Warranty?
After 10 years of driving their initially new car, many people just opt to buy another car by trading in the old model rather than trying to get another ten years useful life out of it. Old cars are often either scrapped or sold off to other countries for parts for this reason and people have suggested that the inner parts are built with a 10 rather than 20-year life in mind, seeing as the owner is likely to get rid of the car when the time comes.
Making Sure Used Doesn’t Mean Ab-used
To make sure you’re not buying a car that has been overutilized, abused, in an accident or facing any other mishap, it is best to get any potential vehicle you’re interested in purchasing to be inspected by a professional. If you’re interested in buying a used car, check out CARRO, where all listed cars have been given a full 120 point inspection to ensure peace of mind.
The Overall Cost of Owning a Car
So we have listed down the different prices of owning a car in Singapore. Below is the summary.
Registration fee + Cost Price + Road Tax + COE + Insurance + Additional registration fee (140% of OMV) and customs duty (31% of OMV)
Make sure you weigh all these costs carefully before you jump on the decision to own a car.