Singapore boasts a handful of attributes that mark the country’s distinct identity, some of which are positive while others warrant a jaw-dropping response. It is not all that surprising that car prices fall under the latter category. Singapore has one of the most expensive car prices in the world, and with all the totalled costs, owing one can sum up to quite a substantial amount.
If you are looking to own a car, it is crucial to go into the purchasing process with proper research and deliberation, lest you are left with a higher bill than you first expected. If you are not sure what to look out for, let us give you a quick rundown on a few of the key costs you are expected to pay for.
Understanding What You’re Paying For
More than the cost of the car, the added miscellaneous fees are the actual reasons why cars in Singapore are expensive. In addition to the high individual costs, they accumulate and snowball into one hefty cost component that jacks up the car prices.
Unfortunately, these fees are necessary to curb the number of vehicles on the roads. Since land is scarce, controlling car ownership in Singapore becomes a necessary state measure.
That said, here is a brief breakdown of the different components that make car prices high:
Open Market Value (OMV)
The OMV refers to the “real” purchase price of the car before taxes and duties. This is what you are essentially paying for your automobile. The OMV is assessed by Singapore Customs, and it takes into account the purchase price, freight cost, insurance, and incidental charges related to the sale and delivery of the vehicle when it is imported to Singapore.
Certificate of Entitlement (COE)
The bulk of your costs from your car purchase comes from the COE, a legal document that allows you to drive your automobile for either 5 to 10 years. Unfortunately, the COE prices tend to fluctuate based on the market demand. Essentially, the more people bid, the higher the COE prices tend to be. This means you would not be able to predict the COE price until you apply for it. There are five categories of COE, and each has its own price band:
Cat A: car 1,600cc and below with engine power not more than 97kw
Cat B: car above 1,600cc or with engine power more than 97kw
Cat C: goods vehicles and buses
Cat D: motorcycles
Cat E: open (any other kind of vehicle)
Additional Registration Fee (ARF)
The ARF is calculated based on the OMV of the car. For the first $20,000, the ARF rate will be set at 100%. For the subsequent $30,000, the ARF will be increased to 140%. When the OMV shoots above $50,000, the ARF will be fixed at 180%.
Preferential Additional Registration Fee (PARF)
For those with cars that are less than 10 years old, you can apply for PARF rebate should you wish to deregister it before its COE expires.
A vehicle that falls under any of these categories - alcohol, cigarettes, motor vehicle, and petrol and biodiesel - will be liable for excise duty. For cars, the excise duty will be 20% of the OMV.
Goods and Services Tax (GST)
Your automobile is subjected to GST and the amount will be dependent on the OMV and excise duty. This is currently set at 7% but will rise to 9% in the upcoming years.
Local Dealer’s Margin
Car dealerships will add a margin to cover costs and make a profit. For each component of a car’s purchase, they will apply a 15% surcharge for affordable brands and up to 50% surcharge for luxury brands.
Let Zion Auto Gallery Do the Financing for You
As one of Singapore’s leading car dealerships, Zion Auto Gallery continuously strives to make the car purchasing process as convenient and streamlined as possible. We take pride in offering a comprehensive list of services to meet your needs. If you need guidance to navigate any application process, we are more than happy to help you. Consider leveraging our in-house financing services and we will tailor our flexible financing packages to suit your unique requirements.
Browse through our online catalogue or simply head down to our showroom at 159 Sin Ming Road to shop for your dream car. Enjoy a hassle-free shopping experience at Zion Auto Gallery today!