Owning a Car in Singapore: What You Need to Know
Are you thinking about buying a car in Singapore? It’s a big decision that comes with many factors to consider. From taxes to maintenance costs, there’s a lot to take into account. In this article, we’ll walk you through the ins and outs of car ownership in Singapore.
Before Buying Your First Car
Before you make the leap and purchase a car, there are several important things to keep in mind. First, you’ll need to factor in taxes, running costs, loan and interest rates, and most importantly, the Certificate of Entitlement (COE) and Additional Registration Fee (ARF).
The COE is a unique system in Singapore that grants vehicle owners the right to register and own a car for 10 years. COE prices tend to be higher when there is a high demand for new vehicles. The ARF, on the other hand, is a tax based on the Open Market Value (OMV) of the vehicle. The higher the OMV, the higher the tax. These costs can significantly impact the overall price of your car purchase.
COE – Certificate of Entitlement
In Singapore, the Certificate of Entitlement (COE) is a necessary requirement for car ownership. This certificate grants the owner the right to register and own a vehicle for a period of 10 years. COE prices can fluctuate depending on the demand for new vehicles, with higher prices often seen in the category B cars and open category E.
ARF – Additional Registration Fee
The Additional Registration Fee (ARF) is a tax imposed on vehicles based on their Open Market Value (OMV). The OMV is the basic price of the car before any taxation is applied. The ARF rates increase as the OMV of the vehicle increases. For cars with an OMV under S$20,000, buyers are taxed 100% of the OMV. The ARF tax rates continue to increase for cars with higher OMVs. This can add a significant amount to the overall cost of purchasing a car in Singapore.
VES – Vehicular Emissions Scheme
Another important consideration when purchasing a car in Singapore is the Vehicular Emissions Scheme (VES). This scheme categorizes cars into different bands based on their emissions ratings. Cars in the most efficient band, A1, receive rebates, while cars in the higher emissions bands, C1 and C2, incur penalties. The VES bands can influence the overall price of the vehicle, impacting your loan and downpayment costs.
Owning Your First Car
Once you’ve purchased your first car, there are additional costs to consider. These include insurance, road tax, and mandatory inspections. Road tax is applicable to all vehicle owners, and the amount varies based on the vehicle’s engine capacity or power rating. Inspections are carried out to ensure your car’s road-worthiness and are required once every two years for new cars and annually for cars over 10 years old.
Maintaining Your First Car
To keep your car in good condition, regular maintenance is essential. Checking tire pressures, tire wear, and engine oil levels at every fuel stop is a good practice to ensure your car remains roadworthy. Caltex service stations offer convenient options for car maintenance, including Caltex Havoline® autoPro Workshops that provide lubricants for regular vehicle servicing needs. Additionally, using Caltex with Techron® fuels can help prevent carbon build-up and improve engine efficiency.
Conclusion
Owning a car in Singapore comes with various costs and considerations. From taxes to maintenance, it’s important to be aware of the financial implications before making a purchase. By understanding the factors involved and taking steps to maintain your vehicle, you can enjoy the benefits of car ownership in Singapore.