Procedure and documents required to buy a car in Singapore
The small, densely populated island nation of Singapore with no natural resources is fast becoming a global role model for sustainable development. The Republic boasts balanced economic, social, and environmental priorities to achieve green and sustainable Singapore.
The Land Transport Authority’s announced – A “Car-Lite” Singapore, and the Singapore Certificate of Entitlement (COE) system to reduce the annual allowable car growth to zero from February 2018. Given the limited scope for further expansion of the road network, the Singaporean government levies a variety of taxes and fees too. So if you are planning to buy a car, do proper financial planning, ensure all your documentation is in order and use online forms and payment systems to help move the process along faster. You’ll be on the road in no time!
Certificate of Entitlement (COE)
After deciding on the car model, you need to first place a monetary bid for a Certificate of Entitlement (COE). It is an “open bid uniform price auction” which grants the winner to register a new vehicle in Singapore for a period of 10 years. The number of available COEs is governed by a quota system called the Vehicle Quota System (VQS) based on the number of vehicles de-registered and COEs cancelled or expired. Category A and B enlists bids for cars and when the demand is high, the cost of a COE can exceed the value of the car itself.Some car dealers’ offer collective pricing where the COE is included in the car’s list price, but the COE obtained through them is more expensive.
Additional Registration Fee (ARF)
ARF is the tax imposed on all cars during registration. The amount of ARF payable is based on the Open Market Value or purchase price of the vehicle. If the OMV is $20,000, then the ARF Payable is 100% of OMV.
Excise Duty and GST
The Excise Duty is an additional 20% of OMV and a further 7% GST is imposed on both the amount for the OMV and Excise Duty leading to double taxation.
Dealers’ margin is 15% of the purchase price for affordable brands and close to 50% on luxury car brands.
Road Tax in Singapore
The road tax typically starts at around $500 depending on the engine capacity of the car. For a 1,600 cc, the road tax is S$372.
After registration, you need to pay for insurance coverage. This may sum to about $1,250 per year, depending on the insurance company.
Vehicular Emission Scheme (VES)
The VES measures CO2, carbon monoxide, hydrocarbons, nitrogen oxides and particulate matter.The amount is determined by the worst-performing of the five emissions and you may be rebated or surcharged of either $10,000 or $20,000. All new carshave a VES label that shows the VES banding.A range of electric cars are likely to qualify for $20,000 rebate.
If you are planning to finance your car, there is sad news as the Monetary Authority of Singapore does place certain restrictions on car loans.Buying a car in Singapore, comes at a cost that goes beyond just the purchase price of a car, maintaining a car over its lifetime is also equally expensive.