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Driving in Singapore: Buying or leasing – here’s what you need to know

So, you’re thinking of driving in Singapore? There are tons of rules and regulation to get your head around – and that’s before you even get behind the wheel. The convenience of having your own wheels (and not having to wait for taxi’s) really is worth the initial hassle though! We’ll take you through it and get you on the road in no time!

Converting your licence

If you have a valid overseas driving licence, you can drive in Singapore for up to 12 months before you need to convert your licence. If you become a PR, you need to convert your licence immediately. If your licence is not in English, you must have an International Driving Permit in addition to your licence. To convert to a Singapore licence, you need to pass the Basic Theory Test (BTT), which involves learning local traffic rules. (EL top tip: Study for the test – it can be very tricky!)

Your application must be made in person at a driving test centre (see sgdriving.net or ssdcl.com.sg for details). The processing fee for converting your licence is $50 and the test fee is $6 (payable with cash, CashCard or NETS only). Make sure you buy the basic theory book at a driving centre, bookshop or petrol stations – and do read it!

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CashCards, the ERP and Parking Coupons

The grey box mounted above your dashboard is the CashCard-reading In-vehicle Unit, or IU. You need to buy a CashCard from a petrol station or convenience store, which can be topped up at the latter or at top-up machines in most car parks. The cards store value and are used to pay for car parks (the fee is debited automatically at the exit barrier) and Electronic Road Pricing (ERP). ERP is charged on expressways and in the central zones, and rates vary according to the location and time of day. Parking coupons are used for street parking and HDB (Housing Development Board) car parks and can be purchased at petrol stations and convenience stores. Most residential parking is free.

General Tips:

  1. If you accidently go through the ERP without enough money on your CashCard, go to onepay.onemotoring.com.sg and pay your fine online. MotorPay is a system that allows you to pay ERP charges through you credit card, without the hassle of constantly stopping to top up the amount left on your CashCard. There’s a monthly fee of $2.50.

  2. Off-Peak Car Scheme: A red number plate means the driver is part of the Off Peak Car Scheme (OPCS), an initiative to encourage car owners to drive outside peak times. In return, they save on car registration and road taxes. (Off-peak drivers can drive all day on Saturdays, Sundays and public holidays and on Mondays to Fridays 7pm to 7am). A $20 e-Day Licence is required for driving an off-peak car at any other time.

  3. New Expressway: Work continues on Singapore’s 11th major highway, the North–South Expressway, a 21-kilometre road that will link the East Coast with the northern parts of Singapore. The $8 billion project is expected to be completed by 2020.

Thinking of buying a car in Singapore?
It could be one of the most confusing and frustrating things you ever do – and that’s before you even try and park in some of the underground mall parking lots! The first thing you need to get to grips with is a few acronyms that you will here time and time again…

  • OMV – Open Market Value: this 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.

  • ARF– Additional Registration Fee: On top of the $140 basic Registration Fee (RF), you also have to pay an ARF, which is 100 percent of the OMV and upward (the higher the OMV, the higher the ARF), plus a 20 percent excise duty. In addition, you need to pay a seven-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.

  • COE – Certificate of Entitlement: To own a car, you need a document known as a COE, which is valid for ten years. The government uses the COE system to control the number of cars on the road, and only releases a limited number each year. 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; it can range from a dollar to $100,000!

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.

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Keen to lease a car instead? 

If you’re 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’re only in Singapore intermittently, renting is a useful option.

Sharing is an option too!

Car-sharing options such as Whizzcar and CarClub are also available. In addition to a membership fee, you pay for the time that you use the car and the distance driven.

Top Tips from our expat panel

Planning on driving? Here’s what some of our contributors have to say on the matter.

“We rent a car with company petrol. Our children’s school is 14km away and the school bus doesn’t stop where we live. It’s easy for doing a big shop, and having friends or family over as our Toyota Fortuner easily seats two families of four.” – Olga

“Having a car makes you feel like you actually live here. It’s funny how the ability to get in the car to buy some groceries rather than catch a taxi is just so appealing, even if it may not make financial sense! Having a car makes you do more because you don’t have the extra step of having to call a taxi or figure out which bus or train to catch. I think a car is a necessity when you have children, as you need to use it so often. We bought our car because we felt this was more economical than renting.” – Penny

“Lease rather than buy. It’s the same cost in the end (if you shop around for a great deal) and much more convenient.” – Kelly

This article first appeared in EL City guide 2015/ 2016.