To Buy …
Buying a car in Singapore could be one of the most confusing and frustrating things you ever do. The first thing you need to get to grips with is OMV – Open Market Value, which is roughly the base value of the car at the time of import. Singapore Customs places an OMV on each vehicle, and this determines many of the additional taxes.
On top of the $140 basic Registration Fee (RF), you also have to pay an Additional Registration Fee (ARF), which is 100-percent of the OMV, plus a 20-percent excise duty.
On top of that, you need to pay a 7-percent Goods and Services Tax (GST), and road tax. Road tax is reduced if you purchase a hybrid or electric car, or a car that runs on natural gas.
To own a car, you need a document known as a Certificate of Entitlement, or COE, which is valid for ten years. The government in Singapore uses the COE system to control the number of cars on the road, and only releases a limited number each year. COEs can be renewed for a further five years without the option to renew, or ten years with the option to renew. You can bid for your own COE – tenders are called for twice each month – or you can leave it up to your dealer. The cost of a COE rises or falls according to demand.
Although the cost of buying a car in Singapore will initially seem much higher than at home, bear in mind that when you sell, export, or scrap your car, you will recoup the unused portion of the COE. If you sell your car after two years, for example, your COE will still be valid for eight years, and you will recoup 80 percent of its cost. You will also recoup between 50 and 75 percent of the ARF. Financing options can be surprisingly affordable, with typical interest rates between 2.25 percent and 2.75 percent per annum. Loans can be repaid over ten years with a low deposit, if any, required up front. All vehicles in Singapore must carry at least third-party insurance.
Or Not to Buy …
Leasing or Renting a Car
If you are on a fixed-term contract, then leasing can be an attractive option, as lease arrangements can be set up to match your contract. All of the big rental companies offer leasing packages and include 24-hour roadside assistance, even in Malaysia. If you are only in Singapore intermittently, renting is a useful option. Just check that the vehicle is insured and remember that a surcharge is applicable if you drive into Malaysia.
Car-sharing options such as Whizzcar and the NTUC Income Car Co-Op are also available. Cars are available across the island and you can collect and drop them off at different locations. In addition to the membership fee, you pay for the time that you use the car and the distance driven.