A car can take you wherever you want in the shortest possible time. It reduces your efforts and saves you time. One way to understand the usefulness of a car would be to accept that a modern car, in many ways, epitomises the progress we have made from the time we started to utilise rudimentary technology to minimise our efforts. Modern cars go much beyond satisfying the primary purpose of transportation. While the majority still continue to use a car for the primary purpose of convenience and mobility, some see it as a tool for making a style statement or a way to feel liberated. Whatever the reason, you’ll hopefully enjoy reading this article because buying a car in Singapore is not just about paying the dealer, taking ownership of the car, and riding back home. There are quite a few issues that you’ll have to wrap your head around.
How Easy Is It to Buy a Car in Singapore?
Whether buying a car in Singapore in today’s times is the best thing to do, is best left to debate and interpretation. One thing is for sure, though. The government of Singapore, in order to keep the country’s limited number of roadways congestion-free, has adopted some unique deterrents and disincentives to make sure that only a handful get to own a car in Singapore. Hence, you may soon discover that buying a car in Singapore isn’t easy, especially with all the paperwork and the different charges that you’ll have to concern yourself with. But, now that you have made your mind up, you should first understand the procedure before you make the actual buy. In this article, we have broken down the complex process into simple steps for easy understanding.
Want to Have a Rough Estimate of the Cost of Owning a Car? Here Are the Important Charges
The government of Singapore, in its bid to keep the number of cars plying on the country’s roads at a manageable level, uses the Vehicle Quota System (VQS). In addition, it also levies a number of taxes on car ownership.
The price of a car in Singapore may depend on the following components:
- Open market value of the car
- Dealer’s margin of profit
- Cost of registration
- Excise duty charges
- GST charges
- Vehicular Emissions Scheme (VES)
- Cost of owning a COE (Certificate of Entitlement)
However, before you buy a private car for your conveyance, you would probably want to get a driving licence if you don’t have one already. You may have to invest a significant amount of time and money before you can get that elusive and prestigious driving licence for Class 3/3A (Motor cars). Here’s an outline:
Cost of Procuring a Driving Licence
Depending on whether you train yourself with a private instructor or enrol in the driving lessons offered by one of the three registered driving schools in Singapore, the price could vary significantly. The three driving schools are:
- Bukit Batok Driving Centre (BBDC)
- ComfortDelgro Driving Centre (CDC)
- Singapore Safety Driving Centre (SSDC)
As per some estimates, the total cost of getting a Class 3/3A licence is approximately S$2,000 and upwards.
The final cost could vary depending on the following factors:
- Time slots you have chosen (The cost per lesson could significantly vary depending on whether the time slot of your class is during the peak period or off-peak period)
- Which school or private instructor you have chosen.
- The number of practical lessons that you have enrolled for.
- Costs related to the actual tests.
- Extension fees if you don’t pass the test within 1 year of enrolment.
- Whether you’re applying for a driving licence to drive a manual-transmission car or an automatic-transmission car.
To offer you a proper perspective, let us turn our attention to the fee structures for training courses offered by BBDC,CDC, and SSDC.
CDC Course Fees for Class 3/3A licence
For a 6-month membership, you’ll have to pay S$112.35, inclusive of 7% GST. This fee is applicable for theory classes only and doesn’t include practical training. Learner membership at this institute can be extended from 6 months to 1 year.
For practical and theory combined lessons, you’ll have to pay the following fees:
- Enrolment fee - S$165.85 for 1 year
- Renewal fee - S$53.5
- Induction programme - Between S$34.24 and S$38.52, depending on the time slot
- Practical training - Starts from S$68.48 for a 100-minute slot and can go up to S$77.04 per 100 minutes (Price varies according to the time slot chosen)
You’ll also have to pay fees for a driver competency test, a pre-operative check on the test vehicle, test vehicle and warm-up fee, and internal evaluation.
The following fees would be charged for practical tests:
- S$6.50 for every Basic Theory Test
- S$6.50 for every Final Theory Test
- S$33 for every Practical Driving Test
SSDC Course Fee for Class 3/3A Licence
You may have to pay the following fees if you decide to get trained at SSDC:
- Enrolment fee - S$167.67
- Practical lessons - S$77.04 for off-peak time slots, per 120 minutes of class
- Warm-up lessons for practical test - S$35.31 during off-peak periods
- Rental charges for vehicle (for practical test) - S$171.20
- Theory trial test for BTT and FTT - S$4.28 per test session
BBDC Course Fee for Class 3/3A Licence
If you want to be trained at BBDC, you may have to pay the following fees and charges (including GST):
For Class 3 Theory Course:
- Enrolment fee (1-year membership) - S$48.15
- Fee per 100 minutes of theoretical lessons - S$17.12
- Fee per 45 minutes of theory practice - S$3.21
- Fee per 45 minutes of theory evaluation - S$5.35
- Renewal of membership - S$4.01 per month
For Class 3/3A Driving Course:
- 1-year membership fee - S$96.30
- Fee per 100 minutes of theory lessons - S$17.12
- Fee per 45 minutes of theory practice - S$3.21
- Fee for 100 minutes of practice during peak time slots - S$77.04
- Fee for 100 minutes of practice during off-peak time slots - S$68.48
- Renewal of membership - S$8.03
- Rental charges for test vehicle - S$171.20
- Warm-up session charges - S$38.52
You may also have to pay for eyesight test, photo session, driving simulation, and risk forecast training session.
In addition, you’ll have to pay the following charges for your tests, irrespective of the driving centre you choose:
- Basic theory test - S$6.50 per attempt
- Final theory test - S$6.50 per attempt
- Practical driving test - S$33 per attempt
Private lessons will usually cost you less. According to online sources, the registration cost for private lessons tend to be lower. Also, depending on the actual number of training sessions that you sign up for, the total cost can vary. You may also have to pay a fee of S$50 to apply for a Qualified Driving Licence (QDL). Let us now turn our attention to the common upfront costs you’ll pay for owning a car in Singapore.
Open Market Value (OMV)
The open market value or OMV is the sticker price of the car. This doesn’t include the add-on prices such as the dealer’s margin, excise fees, etc.
The exact value will be determined by the Custom authorities of Singapore and usually consists of the following factors:
- Purchase price of the car.
- Freight and transportation costs, if any.
- Insurance charges and any other incidental costs related to the delivery and sale of the car in Singapore.
Dealer’s Profit Margin
The dealer’s profit margin or the sales commission that a dealer normally charges for a particular model will be one of the components of the ex-showroom price of your car. According to an article published on the internet, the markup could vary between 15% and 50% in general. If you check SGCARMART.COM, you might see that for some entry-level to medium-range models, the markup or premium can vary between 2% and 17%.
In layman’s terms, this particular price component can be computed by subtracting OMV of the car from the final retail price that you pay.
Cost of Registration
After buying a car, you’ll first have to register it. You may have to pay the following fees for registration:
- A flat fee of S$220 for registering a car in Singapore.
- The Additional Registration Fee (ARF), a form of tax, computed based on the open market value of your car. It will be charged at the time of registration.
ARF for a car is computed based on OMV slabs as follows:
|OMV Slab||ARF Rate|
|First S$20,000||100% of the base OMV slab|
|Next S$30,000 (i.e. from S$20,001 to S$50,000)||140% of the second OMV slab|
|Remaining part||180% of the final OMV slab|
For example, if the open market value of your car is S$85,000, the ARF will be computed as follows:
- S$20,000 (=100% of 20,000) for the 1st slab.
- S$42,000 (=140% of 30,000) for the 2nd slab.
- S$63,000 (=180% of 35,000) for the 3rd slab.
Therefore, you’ll have to pay an ARF of S$125,000 (=S$20,000+S$42,000+S$63,000) if your car’s OMV is S$85,000.
Excise Duty Payments
After your car is registered, you’ll also have to pay another tax called the excise duty. Just like ARF, excise duty also depends on your car’s OMV. Currently, the government is charging an excise duty of 20% of the open market value of your car.
For example, if OMV for your car is S$85,000, you’ll be charged an excise fee of S$17,000 (=20/100x85,000).
If you had thought that the list of taxes has come to an end, we would recommend that you hold your thoughts. You’ll have to deal with some more taxes! The Goods and Services Tax (GST) is one such tax. A GST of 7% will be levied based on the combined value of your car’s OMV and excise duty. Considering that the OMV of your car is S$85,000 and that you’ll have to pay an excise fee of S$17,000, a GST of S$7,140 [=7/100x(85,000+17,000)] will be charged.
Certificate of Entitlement (COE)
This is a certificate issued by the Land and Transport Authority of Singapore which grants you the right to own, register, and use your car in the country. In order to win one, you’ll have to place your bid in a uniform price auction organised by the government.
This ownership license is valid for 10 years. After the expiry of this licence, you can either choose to deregister your vehicle or you can extend it for a period of 5 years or 10 years by paying the necessary Prevailing Quota Premium (PQP).
If you choose to deregister your car before the expiry of the original COE, you’ll be awarded a Preferential Additional Registration Fee Benefit (PARF).
Since COE prices are market-regulated, there may be volatilities. When the price of COE goes up drastically, the overall price of owning a car also increases. The Quota Price (QP) for the month of October 2018 is S$31,301 for Category B cars and S$28,457 for Category A cars. The categories A and B primarily cover the passenger car segment.
As a car owner, you’ll also have to be concerned about some of the following costs:
Long-Term Costs That You Can’t Avoid
Here are some unavoidable long-term costs that you’ll have to bear for the entire period of ownership of your car:
You’ll have to pay this tax on a periodic basis if you wish to ply your car on the Singaporean roads. Usually, the licence has to be renewed every six months or 1 year. You’ll have to keep your auto insurance updated, meet the emission standards, and also satisfy other vehicular evaluations if you wish to renew the licence.
Does your car have a diesel engine? Then you’ll have to pay this tax over and above the regular road tax. This tax acts as a disincentive for diesel engines and high fuel consumption in general. It aims to promote fuel conservation and lower pollution.
Vehicular Emissions Scheme (VES)
This scheme aims to incentivise owners to opt for less pollutive car models. Based on your car’s emission of carbon dioxide (CO?), carbon monoxide (CO), hydrocarbons (HC), nitrogen oxides (NO?), and particulate matters (PM), you’ll be eligible for a rebate or a surcharge.
While the emissions of cars registered between 1 January 2018 and 30 June 2018 would only be evaluated for CO?, NO?, CO, and HC, cars registered post 30 June 2018 and up to 31 December 2019 will additionally be evaluated for PM.
The VES rebate or surcharge will depend on the most damaging pollutant emitted by your car. Based on the emission readings, your car can be included in 1 of the 5 emission bands as follows:
|Band||CO? (*g/km)||HC (*g/km)||CO (*g/km)||NO? (*g/km)||PM (**mg/km)||Rebate||Surcharge|
- PM emission readings won’t be considered for VES rebate/surcharge calculation of cars registered by 30 June 2018.
- You’ll only be eligible for a rebate if you pay a minimum ARF of S$5,000.]
[*g/km = gram/kilometre, **mg/km = milligram/kilometre]
If you get a rebate under VES, this rebate will be used to offset your ARF payments.
It is mandatory for all car owners in Singapore to insure their cars. The premium payable will depend on the extent of coverage offered by your insurance and your claim history. If you want, you may opt for a comprehensive auto cover to enjoy a complete peace of mind.
Car Parking Expenses
Thanks to the country’s perennial space constraints, parking a car in a crowded parking space is sometimes more difficult than finding an empty seat at a restaurant in Chinatown or Little India. This means that the parking spaces usually come for a premium. If you’re a resident of an HDB flat, you’ll have to pay S$80 per month for surface car parks and S$110 per month for sheltered car parks, if you’re owning an HDB car park for the first time. If not, you’ll have to pay S$90 per month for surface car parks and S$120 per month for sheltered car parks. According to an estimate by an online source, you may have to spend upwards of S$100 for office parking, too. This means that you could easily be spending between S$200 and S$250 on car parking every month.
This will depend on your daily/monthly car use, the mileage your car offers on an average, and the price of fuel. Thanks to rise in fuel prices globally in the recent months, fuel may not be cheap. This will inflate your overall car maintenance cost by some margin.
Purchasing a car without financing is not a popular choice because of the number of costs that have to be dealt with. The tenure for most car loans in Singapore may go up to 7 years. The DBS Car Loan is a case in point. Depending on your car’s OMV, you may be able to borrow up to 70% of the retail price or the valuation of your car as per the bank’s assessment, whichever is lower. The remaining cost will have to be borne by you. The bigger the loan amount and the longer the loan tenure, the heavier will be your interest burden.
Car Servicing Expenses
Wear and tear will be a part of your car’s journey. To minimise wear and tear and to maximise resale value, regular servicing is recommended. According to an article published on Torque, a typical auto servicing session may cost you approximately S$188. For a major repair or replacement, the average cost could be around S$425.
If you service your car every 6 months on an average, you may have to allocate between $376 and S$400 per year for maintenance of your car. If major overhauls are required every 2 or 2.5 years, you may have to throw in an additional S$425 or more.
Public Conveyance a More Economical Option?
While public conveyance is indeed a more economical option, you’ll have to see if owning a car is helping you reduce time and effort or not. Taking everything into account, owning a car may not be a bad option, provided you have chalked up a plan for meeting your expenses and know how to get value for your investment.
Also, do a thorough research on the brand and model you want. Do some back-of-the-hand calculations to compare benefits against costs. Knowing what you want is probably a good place to start. For example, if you’re looking for an economical option for city commute primarily, you would probably not consider an European sedan or SUV, would you? A Japanese hatchback may serve you better. If you find the right match for your need, you can hope to save appreciably.