Useful Info › Buying a Car in Singapore

Why do Singapore cars cost so much?

The government actively controls the number and age of vehicles in Singapore through a complex but highly transparent system of tax’s and quotas.

The total number of cars as of 2006 is only 465,000.

The average age of cars in Singapore is very low with most Singaporeans changing their car every couple of years (48.8%):

Average age distribution for cars as at 31st December 2006

Years Total Number of cars %
Below 1 116,741 (24.7%)
1 - < 2 109,075 (23.1%)
2 - < 3 93,240 (19.7%)
3 - < 4 63,124 (13.4%)
4 - < 5 26,056 (5.5%)
5 - < 6 15,655 (3.3%)
6 - < 7 5,823 (1.2%)
7 - < 8 3,398 (0.7%)
8 - < 9 4,456 (0.9%)
9 - < 10 1,174 (0.2%)
10 - 20 33,566 (7.1%)
Total: 472,308 (100%)
Source Land Transport Authority - extract)


In the section below we have tried to highlight the key areas of cost and explain to you the various terms you may come across when looking to purchase a vehicle in Singapore.

OMV

What is OMV? It stands for Open Market Value.
OMV is assessed by the Singapore Customs (Tel: 6355 2000), taking into account purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car from country of manufacture to Singapore.

 

Goods & Services Tax (GST)

GST is approximately 7% (with effect from 1 July 2007) of the Custom Duty and OMV.

 

Vehicle Number Plate

On average, the cost of a set of normal number plate will range between S$25 to S$30.

 

Motor Vehicle Insurance

With today's competitive market, there are many insurance services available.

 

Profit Margin for Motor Distributors

Varies from distributor to distributor, after taking into account the costs listed above.

 

Vehicle Radio Licence Fee (if a radio set is installed)
6 months: $13.50
1 year: $27.00

 

COE

As you will soon find out before you can register a car in Singapore, you have to secure a COE. Different motor distributors have different practices. However, as a service to customers, many companies offer packages that include the COE.

In order to obtain a COE for your NEW vehicle either you or the motor distributor has to bid or the COE through a public tender which cannot be guaranteed and is subject to market forces.

Most buyers opt for the motor distributor to bid on their behalf as the process is daunting for most buyers. However before you sign your sales contract authorising the motor distributor to bid on your behalf you should familarise yourself with the terms and conditions.

Listed below are some of the important items that you should look out for.

1. Is the COE guaranteed?
If it is an unconditional guarantee, it means that the contracted package price is the price inclusive of COE-regardless of what the eventual COE premium for your car would be. If it is a conditional guarantee, make sure that you agree with the conditions before signing.

2. Number and sequence of bids
You need to be clear on the number of bids that will be made over what duration and whether they are they consecutive bids?

3. What is the COE rebate level, if any?
The COE rebate level is the minimum amount at which the company will bid for the (agreed category of) COE. Should the successful (agreed category of) COE premium for that COE tender exercise fall below the COE rebate level, the company will usually rebate the difference to you.

4. Bidding of COE
From time to time, COE premiums may rise and you may be called upon to revise the COE bid amount stipulated in the contract. The company will then bid at an amount equal or higher than the revised bid amount as reflected in the contract.

 


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