Singapore truly lives up to its name as one of the most expensive cities in the world with its high cost of living. Surely, it’s not easy to own a Parisian flat or an apartment in the Tokyo metropolis but there is nothing to compare with the cost of buying and maintaining a car in Singapore.
As we all know, Singapore is a relatively small state in size, not nearly as tiny though Vatican City or Monaco. What does it mean is that because the country is so minuscule that the number of cars being allowed to operate on the roads is being controlled and organized by the government.
To achieve this effectively, the Singaporean government decided to elevate the price of owning a car by including various fees and taxes to discourage some of the citizens to own a private car and choose to utilize public transportation instead. This makes buying and maintaining a car in Singapore so expensive with its additional taxes and fees compared to other countries.
In this piece, asiaone we will break down a few of these charges of what makes owning a car more expensive than usual.
Certificate of Entitlement
The Certificate of Entitlement or COE is simply put, a special license that allows the person to own a car for 10 years and it’s renewable. This fee makes up the large bulk of what is keeping the ownership of a car so expensive. The COE is also being decided based on open bidding, which is being done twice a month.
Whether you know how to drive or not, Singaporeans know the term Certificate of Entitlement. The COEs are also categorized following the vehicle’s engine capacity. Cars with a capacity of 1,600 ccs have a higher cost and vehicles like buses and motorcycles have a lower cost.
Open Market Value
The Open Market Value or OMV is a set of fees that are determined by the Singaporean Customs. It is the actual price of the vehicle based on the international standards when it was imported to the country from foreign brands.
It is also the actual price of the car before being charged with additional fees and surcharges. The OMV includes purchase price, freight fees, insurance, and other additional fees that were included in the package.
Vehicular Emissions Scheme
We know that cars emit varying carbon dioxide which is a pollutant to the Greenhouse gases in our Earth’s atmosphere. These harmful gases like carbon monoxide, hydrocarbons, nitrogen oxide, and other impurities are being tested from your vehicle before being granted to operate.
The Singaporean government added a taxation scheme to encourage buyers to purchase a more environmentally friendly vehicle. The VES comes with either a rebate or surcharge depending on your carbon emission test. If you pass the emission you are entitled to a rebate and if your vehicle has a high emission you are subjected to a surcharge fee.
Apart from the purchase price and the government taxes, owning a car in Singapore also comes with maintenance and running costs. Your budget for maintenance will most likely fall in the petrol because we can’t run the vehicle for a mile without fuel. Another is parking fees, road tax, and insurance.
We want to ensure the smooth operation of our vehicles that is why we also put the regular maintenance of our vehicle in our budget. Electronic Road Pricing also makes up this list because driving into a certain region has a road cost, Road tax on the other hand are being paid every 6 to 12 months depending on the car’s engine capacity.
There are also hidden costs that are included in the costs of owning a car. We know that a car is a liability and it depreciates every year. It is wise to know the taxes and fees of buying and owning a car in Singapore because the dynamics of the market change every time.