Page Text: Road tax
Sales commissions and dealer’s profit
Besides, there are some optional costs. For example, you can bid a desired car registration/plate number if you do not want to use the free one (allocated automatically).
Here is the breakdown of car cost in Singapore
1. COE (not fixed, fluctuating like the stock price)
COE is purely driven by the market: demand and supply. The minimum is $2 (Cat. A) only (it did occur once in November 2008). The maximum is the sky. Up to now, the highest COE price was $110,500 (Cat.4) in December 1994. For the new COE system (since 1999), the record was $97,889 (Cat. E) in January 2013.
With the zero growth rate, one COE is released only after one car is scrapped. Because COE only lasts 10 years, the supply is now mainly determined by the registration numbers 10 years ago.
The majority of car owners in Singapore do NOT renew the COE when the price of COE is high because the renewal price, the moving average of COE prices in the last 3 months (aka Prevailing Quota Premium), is tied to current COE prices, not the old COE price. Also If you renew your COE for another 5 or 10 years, you will lose the PARF (read on) and pay additional/higher road tax each year.
Although you can bid COE by yourself with a $10,000 deposit, most of Singapore car buyers have to authorize the car dealers to bid for them. Most authorized dealers (AD) “bundle” COE with the car in the price list. If you want to bid the COE for yourself, they will deduct an amount that is far lower than current COE price for the list price. Only a few small parallel importers (PI) may be flexible. But some small PIs maybe are not so reliable.
Off-Peak Car (OPC) buyers can get a rebate up to $17000 based on the Prevailing Quota Premium (PQP). Of course, you need to understand the limitations of the OPC and the new Revised Off-Peak Car (ROPC) schemes.
You may check this guide on how COE works and how COE price fluctuates.
2. OMV (the real value of the car, depending on the car)
Open Market Value (OMV) is declared by the importer and evaluated by the Singapore Customs.
Normally, OMV includes car purchase price, freight, insurance, and all other charges incidental to the sale and delivery of the car to Singapore. So, OMV essentially is the real “value” of your car.
Several components of your car price are tied to the OMV.
Car dealers may play lightly with the OMV. They may choose to fit some components (e.g., leather seats, tires, parking camera) locally to lower the OMV to make the car price competitive.
3. ARF (tied to OMV, partially refundable if you scrap your car within 10 years)
Additional Registration Fee (ARF) is a tax for car registration. In Singapore, ARF is a percentage of the OMV. A higher percentage will be imposed for higher OMVs, similar to income tax calculation in many countries.
Currently, ARF is calculated as 3 parts based on OMV:
For the first $20,000, 100% of the OMV
For the next $30,000, 140% of (OMV-20000)
Above $50,000, 180% of the (OMV-50000)
The total ARF payable to the government is the sum of these 3 parts:
If OMV is not higher than $20,000, the ARF will equal to the OMV.
If OMV is higher than $20,000 but lower than $50,000, the ARF will be $20,000+1.4*(OMV-20000).
If OMV is higher than $50,000, the ARF will be $62,000+1.8*(OMV-50000).
Up to 75% of the ARF are refundable as the Preferential Additional Registration Fee ( PARF ) Rebates.
PARF rebates calculation is based on net ARF. If your car enjoys the VES rebate (read on), the net ARF will be the reminder after the deduction of the rebate.
If the car is deregistered within 5 years, you can get back 75% of the ARF. The percentage decreases after 5 years. If you deregister the car until COE expires, the PARF rebate will be 50% of the ARF. Please note, the car must be less than 10 years old to get the PARF rebates upon deregistration.
As mentioned earlier, if you renew the COE for your car, you will be automatically de-qualified for PARF rebates.
4. Excise duty (20% of OMV)
ARF is a tax, and excise duty is a kind of import duty.
Currently, the exercise duty for all cars imported to Singapore is 20% of the OMV.
5. GST (7% of OMV+ excise duty)
Goods and Services Tax (GST) in Singapore currently is 7% of the taxed value.
For cars, GST is collected on the OMV and exercise duty.
So, the GST the dealer has to collect is 7%*(OMV+20%OMV). This equals 8.4% of the OMV.
6.VES rebate or surcharge
Vehicular Emissions Scheme ( VES ), which replaces the old Carbon Emissions-Based Vehicle Scheme (CEVS), was implemented in January 2018.
Current VES is based on a vehicle’s carbon dioxide (CO2) emission, and the emissions of 4 pollutants – hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOx) and particulate matter (PM).
Some “clean” or “green” cars will get up to $20,000 (band A1) VES rebate to offset ARF (subject to minimum ARF of $5000), or get up to $20,000 surcharge (band C2). Unlike the rebate, the VES surcharge does NOT change your net ARF. This means you cannot get any of the surcharges back upon deregistration.
7. Car registration fee ($220)
Currently, LTA charges $200 car registration fee, including a system-assigned car registration/plate number.
8. In-vehicle Unit fee (IU, $150)
All cars registered in Singapore must fit the In-vehicle Unit (IU). The IU is required for ERP payment. Many car parks also need this IU to calculate parking fees.
The unit must be fitted before the car can be registered.
The cost of the IU unit is $150 plus 7% GST. Almost all car dealers include the IU unit in the price list.
9. 6-month (or 12-month) Road tax (tied to the car engine capacity and fuel type)
Upon registration, 6-month or 12-month road tax must be paid. Almost all car dealers in Singapore include 6-month road tax in the price list already.
Please note, when paying road tax, you must have a car insurance policy covering this period for the car. This means you need to pay the insurance company before car registration. For legal reasons, most car dealers only collect payment for the insurance company when you make payments for the car.
You have the legal right to use any insurance company. It is not necessary to use the “recommended” or in-house insurance company. But most car dealers may claim the price list includes insurance subsidy, and therefore, you may have to pay more for the car if you do not use the “subsidized” insurance company.
10. Sales commissions and dealer’s profit (usually at least 15% of the purchase price)
All car dealers do business for profit. The salesperson need to get paid for their hard work, although you may not satisfy with them.
Do you know the breakdowns of the cost of new cars? Can you understand why cars are so expensive in Singapore now?
If you have any questions about car price in Singapore, please let us know in the comment box below
The community will help you.
For questions on buying a car in Singapore, please check Singapore car ownership guides page .
For questions on driving a car in Singapore, please check Singapore driving guides page .
For driving from Singapore to Malaysia, please check Dring to Malaysia guides page .
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