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.
