Buying A Car In Singapore: 6 Must-Know Facts
So you’ve decided to get your own car. Congratulations!
You’re already halfway there. Buying a car in Singapore is no easy feat.
The city-state is notorious for making it difficult for people to own a vehicle — for a good reason.
Singapore is a small island with a high population density. To make sure it stays pedestrian-friendly and spacious, the Government has placed a lot of red tape on vehicle ownership.
But that doesn’t mean you can’t have your own car. It’s just a little bit more challenging to get one. So if you’re dead set on getting behind the wheel and cruising Singapore’s streets with your sedan, below is a guide to help you out.
Car-Buying Checklist In Singapore
If you’re buying a car in Singapore, you must have a handy checklist.
There are other costs to consider besides the vehicle’s purchasing value.
Additionally, you need to have a bit of money saved to make a purchase.
Here’s a rundown of the documents, requirements, and fees involved in purchasing a vehicle:
- Certificate of Entitlement (COE)
- Road Tax
- Petrol Fees
- Parking Rates
- Maintenance Fees
- Loans and Instalments
1. Certificate Of Entitlement (COE)
Every car owner in Singapore needs a COE to drive on the roads legally. A COE is a piece of documentation that allows you to register, use, and drive an automobile. This document is valid only for up to 10 years. You’ll have to renew the COE if you want to drive your car for another decade.
To register your car, you have to place a bid for a COE in the corresponding vehicle category. Under the Vehicle Quota System (VQS), only a handful of cars can be registered in Singapore. Its purpose is to control the number of vehicles passing on the roads daily.
Currently, there are 5 COE categories under the VQS:
- Category A – Vehicles with engine capacity of up to 1,600 ccs and power output of 97kW.
- Category B – Vehicles with engine capacity exceeding 1,600 ccs or power output of 97kW
- Category C – Vehicles used to transport goods (buses, trucks, vans, etc.)
- Category D – Motorcycle
- Category E – Open category that applies to all of the above classifications, except Cat D.
So how does COE bidding work? You’ll start by placing a bid or the amount you’re willing to pay. This will now be the “reserve price” in the system. Then, the system will automatically increase the current COE price by $1.
If the COE value surpasses your bid, then you no longer have a chance to bid in this round.
The current COE price will rise indefinitely and stop only when there are as many bidders as available COEs.
After the bid ends, successful bidders will have to pay each category’s final Quota Premium (QP).
2. Road Tax
The road tax is included in the total car cost of buying a vehicle.
However, you’ll have to renew the road tax every 6 or 12 months if you meet the renewal requirements.
Here’s a list of prerequisites needed to renew a road tax
- Vehicle Insurance Coverage – Your vehicle must have insurance coverage for the entire duration you’re paying the road tax. Car insurance should cover third-party liabilities for deaths and bodily injuries. Driving a vehicle without insurance coverage is a criminal offence. You may be fined or imprisoned for doing so.
- Vehicle Inspection (if due) – You will receive an inspection notice three months before the expiry of your road tax. If you’ve misplaced the notice, you can have the LTA inspect your vehicle in LTA-Authorised Vehicle Inspection Centres.
- Outstanding fines from the Land Transportation Authority (LTA), Housing & Development Board (HDB), Urban Redevelopment Authority (URA), and Traffic Police (TP) – Any outstanding warrants or fines with these agencies may disqualify you from road tax renewal. Make sure you pay all existing fines at least three days before paying for road tax renewal.
- For Weekend Cars/ Off-Peak Cars/ Revised Off-Peak Cars – The road tax for these vehicles can be renewed only every 12 months.
For Heavy Vehicles – Must have a valid Vehicle Parking Certificate (VPC).
Your vehicle is categorised as heavy if it falls under these:
- Maximum laden weight exceeding 5,000 kg
- Bus with 15+ passenger seating capacity
- Trailer/mobile crane
- Recovery vehicle with an unladen weight exceeding 2,500 kg
Check with your car dealership if the road tax is included in the cost for brand new vehicles. On the other hand, used cars may have an invalid road tax. Ensure that it’s valid. Without one, it’s best to talk with the dealer.
3. Petrol Fees
You have to set aside money to pay for petrol and diesel fees.
In Singapore, the average price of gasoline stands at $3.02, with a minimum of $2.69 and a maximum of $3.25.
Compare this with the global average price of petrol, which is $2.75.
For example, you want to buy a new Toyota Corolla Altis. Be prepared to save at least $200 a month on fuel costs. Considering that you can drive 15.4 km per litre before refuelling, your annual fuel costs may total $2,402.
4. Parking Rates
The HDB and URA manage Singapore’s parking services. This means you’re allowed to park only in designated zones around the city. Parking in unauthorised locations may warrant a fine or offence.
With the HDB and URA, you can apply, renew, transfer, and terminate your season parking ticket.
You may also buy parking coupons and pay parking-related fines to them.
5. Maintenance Fees
Before buying a car in Singapore, understand that it takes enormous responsibility on your end to maintain it.
Vehicle maintenance is vital in preventing car problems and ensuring you can drive safely on the roads.
It’s a good habit to know how often you should service your car.
Generally, you’ll have to send your vehicle to an auto servicing centre every six months or once its mileage reaches 10,000 km. If you own a luxury vehicle, it’s best to have it serviced at a specialist auto shop.
6. Loans And Instalment
You won’t necessarily have cold, hard cash when buying a car in Singapore from a dealership — and you’re not expected to. This is why some people opt for loans and instalment payments.
On average, loans for cars with an Open Market Value (OMV) below $20,000 are payable for up to seven years. The loan value is capped at 70% of the vehicle price. Meanwhile, for OMVs higher than $20,000, the maximum loan is capped at 60% of the vehicle price.
Are you thinking of buying a car in Singapore?
Start preparing for the costs and required documents with the simple guide above. Although owning a car in the state is a bit difficult, it does encourage you to become a more responsible driver. Maintenance, road taxes, COE renewal, parking ticket — you’ll need to manage your finances well to ensure your car is at its peak performance.
Need more information on automobiles?
Kee Yong Auto has got you covered. We’re a family-run Sing Ming car workshop specialising in premium car packages. We service luxury car brands like Jaguar, Mercedes, Bentley, Porsche, Land Rover, and BMW.
Enquire now and learn more about how we can help!
FREQUENTLY ASKED QUESTIONS ABOUT BUYING A CAR IN SINGAPORE
Can Foreigners Buy A Car In Singapore?
Yes, foreigners can buy and drive cars in Singapore. However, most don’t find the need due to Singapore’s efficient public transport system.
How Do People Buy A Car In Singapore?
People buy their cars from accredited dealerships in Singapore. Due to the city’s strict vehicle ownership rules, visiting a dealership is the easiest way to own a car.
Why Are Second-Hand Cars Cheap In Singapore?
Used cars in Singapore are cheaper because they’re less costly to insure. Also, aftermarket and used parts are in wide availability. They’re easy to find, making them far more affordable than brand new vehicles.
Are Central Provident Fund (CPF) Contributions Payable On Personal Car Loan?
No, CPF contributions are not payable on personal car loans given to the employee, especially if the vehicle is not tied to their work. However, they are payable on cash payments for the following employee car-related expenses:
- Parking fees
- Electronic Road Pricing (ERP) fee
- Road tax
- Repair fee
- Servicing fee