Buying a Car in Singapore
This post is intended to serve as a brief look into purchasing a car in Singapore. For more detailed information, you are of course advised to consult a car dealer/financier as well as the respective government institutions involved in the registration process.
But that being said, as we’ve already pointed out before that if you’re on a tight budget, buying a car in Singapore may not be the best idea. Indeed given the nation’s relatively-small size and impressive transportation infrastructure, owning a car isn’t as much of a necessity as it may be in other parts of the world.
But some people do have the means to comfortably acquire their own ride. Or others may feel that no matter what, they just cannot live without their personal vehicle. Also, depending on where you’re coming form, there are some destinations which can in fact be reached faster by car than the Mass Rapid Transit (MRT). So in this article we’re going to explore acquiring a private vehicle in the Lion City.
IMPORTING A CAR
Some individuals may actually decide to import a car. Or maybe some foreigners will decide to bring their own with them when relocating to Singapore. Well first things first – there’s a flat registration fee involved for all imported cars. And said fee comes up to a sizable amount of about US$7,300 (SGD$10,000).
Then other stipulations also apply. For example, it must be a right-hand drive car. So you can’t import for instance cars from the United States, where the steering wheel tends to be on the left side of the dashboard. Also the vehicle cannot be more than three years old. It is not clear why cars have to be new, but knowing the Lion City, it’s probably in the name of keeping up appearances. Also more-modern cars tend to be more fuel-efficient. And yes, any car that is imported will in fact undergo a fuel-economy test.
Also there are other charges which will apply. Ultimately, if you are importing a vehicle, it would be advisable to liaise with someone at Singapore Customs to hash it all out. For instance, there are customs’ duties which cost about 20% of the Customs Value of the car. The Customs Value of the car is determined by Singapore Customs and is obtained by a calculation which takes into account not only the cost of the vehicle itself but its freight, shipment insurance, etc. Then on top of that, you’ll have to pay what is known as the Goods and Services Tax (GST). Currently GST stands at 7%. So you will pay 7% of the car’s Customs Value plus customs duties in order to have it imported. And there are other general charges which all car owners, imported or domestic, must pay, the most notable in this particular case being the Certificate of Entitlement (COE). Also if you are actually sending the car from overseas, you will incur another major cost when transferring money from a foreign bank to one in Singapore in order to complete the transaction. So accordingly even if you can afford to be a car owner in the Lion City, actually importing a vehicle is more of an option for the well-to-do.
PURCHASING A CAR DOMESTICALLY
Usually there are various transaction payment options you can use to purchase domestically such as check, credit card, straight-up cash or a popular payment-transfer system known as NETS (which you will also use to pay tolls once you acquire the car). And yes, there are some intricacies to the game. For instance, some dealers may encourage you to finance your car via loan even if you don’t necessarily need to. And whereas at first this may seem like a kind of scam, it has been pointed out that in some cases taking out a loan is more beneficial than paying upfront. So you’ll definitely want to familiarize yourself with all financing options available and, where applicable, even negotiate prices (some online marketplaces don’t engage in negotiations).
And whereas importing a car may be more costive, at the end of the day you should expect to cough up a pretty penny for your automobile even if you do buy it locally. For instance, regardless of how the car is acquired, you still have to get that dreaded COE, which is basically a car registration. There is a bidding process involved in its acquisition. But ultimately, to be completely frank, a COE is damn expensive unless, relatively speaking, you’re registering a motorcycle. And even if it is just a motorcycle, as of July 2020 its COE will set you back about US$4,741. Meanwhile the most you can pay for a COE, depending on your car type (i.e. its engine size and wattage) is about US$25,500. And yes, in most parts of the world that is enough money to purchase a car in and of itself. Also, under normal circumstances the COE must be renewed every decade. So if you buy a used car whose COE is still active, you won’t have to worry about getting its documentation renewed until its current period of validation expires, thus making the prospect of obtaining a used vehicle even more attractive from a monetary standpoint.
Then beyond the COE there are a number of other documents which must be acquired before actually putting your car on the road. But the COE, as well as the price of the actual vehicle, are the two biggest expenses which will be incurred. And we will delve even further into the actual cost of owning a car a little bit later.
PLACES WHERE CARS CAN BE PURCHASED DOMESTICALLY
There are parts of Singapore that specialize in car sales. But this being the modern world, of course purchasing one online is also an option. Here, we will point to some popular sites, both online and off, that you can look into if you’re interested in purchasing a car within Singapore.
Leng Kee Car Belt (aka Leng Kee Road) is perhaps the most-popular place in the Lion City for purchasing a new car. Leng Kee Road itself is situated in a part of Singapore known as the River Valley which isn’t too far from the Downtown Core. What make the Leng Kee Car Belt unique is that, as its name implies, there are a number of car dealerships on the strip. And you can find shops there run by well-know companies including BMW, Mercedes-Benz, Hyundai and Toyota.
Then there is the Kampong Ubi Industrial Estate. This area is also located in Singapore’s Central Region, northeast of the Downtown Core. The Kampong Ubi Industrial Estate is full of automobile merchants of different varieties. It is the place to go if you’re looking for a used car. Also there is a plethora of car repair and upgrade shops situated there.
SGCarMart is also a cool website to visit if you’re looking for a used car, though new models are also available. Indeed there are some really-pricey vehicles, if that’s what you’re into, available on the site. Moreover SGCarMart, according to its presentation, can fully facilitate a car purchase, including assisting buyers with financing.
And there are also other online marketplaces, such as OneShift, which offer similar services with their own unique angles. For instance, with Carro, a used-car dealer, the company itself personally inspects and approves all of the cars they sell before advertising them online.
AVERAGE COSTS OF CAR OWNERSHIP IN SINGAPORE
Once you do decide to purchase a vehicle, you can expect the cost to dissuade you because, once again, it is an expensive endeavor. And these expenses go beyond the high costs associated with buying it in the first place. For instance, just acquiring a driving license alone, if you use a driving school, will set you back over US$1,000 – in some cases significantly more. You can opt to take your mandatory lessons via a school or private instructor, with the latter being the less-expensive option. But either way be prepared to shell out some major bucks.
The good news is that if you’re a foreigner visiting Singapore, the licensing options made available to you are infinitely less-expensive. For instance, you can apply for an International Driving Permit for just US$15. Or you can convert your current driver’s license into a Singaporean driving license. And the cost of that process is roughly US$36.
Then after acquiring a license, we refer to a site called Dollars and Sense that has put together estimates of how much you should expect to pay annually to maintain your vehicle. For instance, there is a Road Tax that will hit you in the pockets for about US$360 per year. Then auto insurance is an additional US$910. And in terms of parking, let’s estimate around US$100 a month, which will equal an additional US$1200 per anum. Gas will come up to about US$175 for a month, which multiplied by 12 will give us a bill of US$2100. Then maintenance has been calculated at least an additional US$728 annually. So all of these together amount to US$5,300 you’ll be paying for your car each year, excluding car loan payments if such apply.
And this information is not meant to scare anyone away from buying a car, at least not on our end. We just want to show you the hardcore financial aspect of owning your own vehicle in the Lion City. But it has been pointed out that the primary reason why owning a car is so expensive is because the Singaporean government itself does not want the relatively-small nation to be overburdened with motorvehicles. Or stated differently, they don’t want people driving around just for fashion. The way the Singaporean government idealizes the situation is that only those who have an absolute necessity to possess their own vehicle would go as far as to actual acquire one.
If you visit a webpage that is centered on giving advice on purchasing a car in Singapore, almost invariably the first thing they will mention is that doing so is an expensive endeavor. In other words, one should look before they leap. But the situation is so for a reason, which is that the Lion City does not want to become a traffic nightmare. Indeed many of us have been to much larger cities which are plagued with issues associated with too many cars being on the road. So even if you can afford a car, you may want to comply with the government’s ideology by not actually buying one. And they’ve made that option more appealing with their maintenance of the ultra-modern MRT system. Moreover there are taxis, Grabs, etc. in abundance.
But that being said, owning a car is like a dream – or even necessity one could argue – to some people. So if you’re one of those types who can’t do without – and you can afford it, no one is going to stop you from going for it. But at the same time, even those who have actually taken this leap are always warning others of the associated costs that come with owning a car in the Lion City.