Commuting between places is so much easier with a personal mode of transportation. Instead of following fixed routes or timetables, drivers can plan their own trip, take diversions to avoid bad traffic, and relish in the utmost flexibility and privacy of a peaceful journey.
But as we all know, cars are an expensive financial commitment. To understand its true cost, we break down the main components contributing to the price of owning a car in Singapore.
Image Source: Generational Kinetics
According to Land Transport Authority (LTA), a registration fee of S$220 will be collected upon registration of the car.
Open Market Value (OMV)
The Open Market Value is determined by the Singapore Customs. It is based on:
- Actual price paid for the purchase of the car
- Freight cost of the car
- Insurance and other possible charges involved in the sale and delivering of the car to Singapore.
The Excise Duty is a tax collected by Singapore customs. It is directly correlated to the OMV. The Excise Duty for cars in Singapore is 20% of the car’s OMV.
Certificate Of Entitlement (COE)
When the demand for vehicle ownership spiralled out of control in 1990, the former transportation unit of Singapore’s Public Works Department implemented a quota limit to manage the rapid vehicle population growth rate. Known as the Certificate of Entitlement (COE), this certificate represents a quota license received from a successful winning bid in an open bid uniform price auction which grants the legal right of the holder to register, own and use a vehicle in Singapore for a period of 10 years.
Today, this system remains as one of the key pillars in Singapore’s traffic management strategies that has contributed to our sustainable urban quality of life.
The COEs are divided into five categories. To own and operate a vehicle in Singapore, it is compulsory to bid for a COE from the matching category:
- Category A | Cars with engine capacity up to 1,600cc and maximum power output up to 97 kW (130bhp)
- Category B | Cars with engine capacity above 1,600cc or maximum power output above 97kW (130bhp)
- Category C | Goods carrying vehicles and buses
- Category D | Motorcycles
- Category E | This is an “open category” COE, which can be used for all of the above.
(Related Story: The Fundamentals Of Singapore’s COE System)
Additional Registration Fees (ARF)
The Additional Registration Fee will be imposed upon registration of the car. It is taxed based on the OMV of the car. At present, any vehicle with OMV of up to S$20,000 will be subjected to 100% OMV. As for vehicles with OMV above S$20,000, they will be taxed differently based on the incremental OMV.
Vehicular Emissions Scheme (VES)
In Singapore, the Government also takes into account carbon emissions. Where the cars emit low carbon emissions of less than or equal to 160 g/km, the car owners are entitled to a rebate that ranges from $5,000 to $20,000. On the other hand, car owners will be penalised with a surcharge that ranges from $5,000 to $20,000 if their vehicle emits carbon more than or equal to 211 g/km.
Details of the VES bandings for cars are as follows:
- Road Tax
- IU Fee
- Car Plate Number Fee (Related Story: A Guide To The Types Of Car Plate Numbers In Singapore)
- Sales Commission of Dealers
Let’s also not forget Goods and Services Tax (GST) which is imposed on OMV and Excise Duty.
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