Owning a car in Singapore is a luxury, an expensive endeavor compared to the rest of its neighboring countries. This is also why people opt to sell their car in Singapore afterwards to at least get some money back. With many costs involved with car ownership that go beyond the standard price of a car, many ask why is it so freaking expensive to own a car in Singapore?
The real reason is that Singapore is a small country. It means that the number of cars allowed on the roads has to be properly controlled. Hence, the Singaporean government decided to implement strict laws, pushing the price of car ownership through the following.
1. Certificate of Entitlement (COE) – The main reason why owning a car is expensive. COE is something that everyone in Singapore knows. It is a certificate that gives the vehicle owner legal ownership over the car and allows them to use the car for ten years.
2. Open Market Value (OMV) – Think of a car’s OMV as a baseline guide to the original price of the car. The OMV of a vehicle is determined by the Singapore Customs. It is based on the actual price paid or payable for the vehicle. The OMV prices we see are what some people in other countries are paying for the exact same car, think of it as the basic car price. Usually, this is also the prices vehicle owners start with when they sell their car in Singapore.
3. Additional Registration Fee (ARF) – The Additional Registration Fee (ARF) is a form of tax that is imposed upon registration of a new car and all cars are subjected to this important add-on.
4. Excise Duty – Excise Duty is a form of tax imposed on specific goods within a country. For example, in Singapore, we have additional taxes on goods such as alcohol, cigarettes and petrol and our vehicles are no exception. In order to exercise your car ownership, you need to pay for excise duty.
5. Registration Fee – Aside from the ARF, this one is a separate fee for registration. According to the Land Transport Authority (LTA), a Registration Fee of $220 is levied upon the registration of a new car but this fee usually is included to the basic cost of the car itself, depending on your dealer.
6. Other Fees – Last but not least, you know when you sell your car on consignment? Then you know about the car dealers that are selling used cars in Singapore. They would also need to cover their own overheads for at least taking care of your COE bidding and finding cheaper cars for your needs. We call this dealers’ margin. Dealers’ margin could range from as little as about 15% for affordable brands to as high as 50% or more for luxury car brands.
Here is an example of how a $19,146 2014 Toyota Corolla Altis becomes $97,988 in Singapore. (source)
|COE (Cat A)||$32,309|
|Basic Cost (Including $220 registration fee)||$76,260|
|Dealer’s Margin||$21,728 (28%)|
|Final Sale Price||$97,988|
Is it worth it?
Worth is different from cost. These are two different words but their meanings are often interchanged. Yes, a 2014 Toyota Corolla costs almost $100,000 today but how much you need it would be the one to determine if it is worth it. Only you, from where you stand at this moment, can tell us if it is worth it.
If you are looking for used cars in Singapore, visit our website and let our car experts help you with your needs.