Beginner’s Guide to Buying a Car in Singapore
Before you start reading this, you should know that this isn’t some ‘101 guide for dummies’, nor is it a long essay filled with automotive jargon. Like many, I dream of getting my own car (but first, a driver’s license) one day. For now, I have been spending quite some time and brain cells trying to grasp a basic understanding of purchasing a car in the ever-sunny Singapore.
After days of furrowing my brows and beavering away at countless articles, I have come to one conclusion: Car-buying is comprehensive, but it is not complicated. As such, I decided to write this simple guide to make various key features more digestible for new drivers.
Let’s get the ball rolling with some food for thought:
- What is the purpose of the car?
- What do I have to pay for?
- What other aspects should I consider?
What is the purpose of the car?
Unlike the daily ritual of getting kopi to go for the day ahead, purchasing a car is a costly affair — one that makes you think twice, or even thrice. How much you are willing to set aside every month depends significantly on the type of car you are buying.
Do you need this car for family travel and convenience? Or perhaps you want a luxury vehicle to reward yourself after years of hard work, simply because, adulting is hard enough and you know you really deserve it. Regardless of the reason, it is crucial to first understand your personal needs in order to find a car that best suits your budget and lifestyle.
Pro tip: Buying a car is different from an impulse midnight purchase on Shopee – so give it a more thorough thought and do not simply do it for the ‘gram (Instagram) or TikTok!
What do I have to pay for?
Alas, we have come to the heart-pain-wallet-pain part of car purchase: paying for a car. While we can’t possibly go through all the details in this guide, the first three points are commonly discussed during a sales consultation. For starters, every car purchase requires a basic administrative fee of $220 and a processing fee of $26.75. Here is an overview of the charges and fees:
- Certificate of Entitlement
- Open Market Value (inclusive of 7% GST on OMV + Excise Duty)
- Road Tax
- Registration Fees
- Additional Registration Fee (ARF)
- Special Tax
- Carbon Emissions-Based Vehicle Scheme
Certificate of Entitlement (COE) is required by law for anyone who wishes to register a new vehicle in Singapore. In addition, COE represents a right to vehicle ownership and use of Singapore’s road space for a span of 10 years. There are two COE bidding exercises every month, and the results are released through competitive bidding.
After the decade COE period has ended, a car owner may choose to deregister their vehicle or to renew the COE for another five to 10 years by paying the Prevailing Quota Premium, which is calculated based on the three-month moving average of the Quota Premium for the respective vehicle categories.
There are five COE categories in total:
- Category A – Cars Below 1600CC & Taxi
- Category B – Cars Above 1600CC
- Category C – Goods Vehicles & Bus
- Category D – Motorcycles
- Category E – Open
Open Market Value (OMV) refers to an amount that will be assessed by the Singapore Customs. Not to be confused with the selling price from the manufacturer or local authorised car dealers, when formulating the OMV, the Singapore Customs will evaluate the following:
- The purchase price of the car
- Freight costs
- Other charges incidental to the sale and delivery of the car (from the country of manufacture to Singapore)
Not forgetting Road Tax, which every car owner has to pay unless you can safely say that here, there and everywhere is your “grandfather’s road”. Most road taxes are renewable either every half a year or annually. To renew, vehicle owners must fulfill some prerequisites, and one such example is passing the periodic vehicle inspection.
Pro tip: To learn more about financing, check out the article: ‘Let’s talk finances (part 1): Budgeting and how to save for a car’
What other aspects should I consider?
As with all material goods, there are the new and pre-owned; and with cars, the decision to go for either a hybrid or electric vehicle. With a myriad of choices more than the dishes for your caifan order, buying a car for the first time is no mean feat.
Thankfully, there are many online car forums for you to stalk and dig up more information, and if in doubt, always seek advice from a professional automotive sales consultant.
Purchasing a car is a huge responsibility, and with all the maintenance and hidden costs, it is always wiser for first-time buyers and users alike to consider mainstream and popular cars, namely the Honda Vezel and Toyota Sienta. Always do multiple checks on the paperwork and car’s condition before giving your seal of approval.
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Ready for another quick three-minute read? Check out: ‘5 Common Questions when Purchasing a Pre-Owned Car’