One of the first things that every new expat should consider when arriving in Singapore is transportation. Having a personal vehicle in our lives can be so important, that it may seem crippling not to be able to drive yourself around.
However, the entirety of Singapore is about the size of a large town – maybe even smaller! It has a sophisticated system of air-conditioned trains and buses that reach every single corner of the country – public transport is comfortable and efficient. Many Singaporeans forgo buying a car in favour of the reliable public transport.
If you still have your heart set on a personal vehicle, we will walk you through the puzzling intricacies of getting a car in Singapore, and point out the mistakes to avoid!
Buying a car in Singapore can be hideously expensive compared to America or Europe – and with good reason. Importing cars into Singapore is hugely exorbitant – and additional costs add to the original car price. Land is limited in Singapore, and there is a real danger of its 5.3 million citizens severely congesting the roads.
To control the growth in the number of vehicles, the government has enforced a number of controversial measures to manage car ownership and usage. These include the Certificate of Entitlement (COE), which can vastly inflate the final cost.
Below is a comprehensive list of charges that is included in the car price.
- Basic administrative fees of $140.
- Open Market Value (OMV) – Value of the vehicle, which takes into account all charges associated with the sale and delivery of the vehicle from the manufacturer to Singapore.
- Excise Duty – A tax imposed by Singapore Customs, which is 20% of the OMV of the vehicle.
- Goods & Services Tax – 7% GST on Excise Duty and OMV. A tax that is imposed based on the value of goods.
- Additional Registration Fee (ARF) – A tax imposed upon registration of a vehicle, it is a percentage-based tiered rate which increases with the OMV of the car
- Certificate of Entitlement (COE) – Each month, a limited number of certificates are released, and you will have to bid against fellow motorists to get your hands on one. The vehicle entitlement is valid for 10 years from the date of registration of the vehicle. This informative article shows you the process of bidding for a COE.
These charges are just for purchasing a car. To actually drive the car, you will have to pay road taxes, car insurance, parking and Electronic Road Pricing (ERP). This comical infograph works out the true cost of owning a car in Singapore – you will be shocked at how much it actually costs! No wonder most Singaporeans prefer to use public transport.
Examples of prices (As of April 2015):
A new Toyota Corolla Altis 1.6: SGD100,000 to SGD115,000
COE rate for a vehicle above 1,600cc: SGD68,000
Now, we come to the cutthroat world of car businesses. With highly-competitive dealerships and contracts shrouded in legalese, is it even possible to outwit the canny salesman and buy your dream car? With this guide, you can succeed in your epic quest!
Mistake #1: Letting the salesperson steer you
There may be honest car salespeople out there, but remember: They are trying make a sale which will result in the most commission for them. To this end, they may ignore your needs and push you to buy an unsuitable car, or even encourage you to take out an expensive car loan. Good salespeople can pick up on hidden body cues and speech inflections – if you show preference for a particular car, they will play on your emotions and convince you into buying it before you know what’s happening!
Mistake #2: Expose yourself as a newbie
Car dealerships love new buyers – you may even hear the Jaws theme playing as salespeople converge upon an unfortunate newbie.
Someone may ask if you are financing, which means to take out a car loan and pay by monthly instalments. Always reply that you have not decided yet, and never let slip that you are paying by cash. A salesperson profits from loans – If they know that you are paying cash, negotiations will get rather inflexible. Also, don’t ask for their best price – it will show you up as a newbie.
Mistake #3: Not understanding what you are buying
Beware the salesman who stands there flashing his best smile, all while expounding on the car’s best aspects. Do your research beforehand, so that you know what specifications you are looking for.
Factor in maintenance cost and the overall running cost over time. Make a plan, stick to it and don’t get suckered by a hypnotizing list of attractive features. Always take the car out for a test drive – everyone car handles differently, and it’s important to get hands-on.
Mistake #4: Drawn into aftermarket purchases
Don’t be the person who calls back to the dealership with buyer’s remorse, trying to negotiate a cancellation of fancy aftermarket extras that you were talked into buying.
You have just bought your dream car, and now the nice salesperson is offering you all kinds of cool stuff that you can upgrade your ride with. Don’t be drawn into visions of racing spoilers and carbon hoods – you may end up with a bill that you can’t pay.
Mistake #5: Buying at the first dealership
Buying a car is a big investment, and you don’t want to be caught out with a car or bill that you regret later. Salespeople are trained to be very persuasive and will try to charm you into buying a car on your first visit. Get out there, shop among all the dealerships, and resist the urge to ‘settle’.
Compare prices, cars and deals; take this information with you to other places and see if another dealer can offer you a better deal.
Singapore may be small, but it does have first-class road conditions – traffic congestions are rare, and parking spaces are easy to find. Buying a car in this country may be expensive, but the independence of travelling on your own time will be totally worth it. So what are you waiting for? It’s time to find your dream car today!