Cost of Getting A Car In Singapore: Why Are COE Prices So #$%&ing High?!
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Seedly Cost Of Car & COE Price

Cost of Getting A Car In Singapore: Why Are COE Prices So #$%&ing High?!

Ming Feng
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Singapore has been doing a great job in retaining its number one title as one of the most expensive cities in the world.

And it’s largely due to the cost of buying and running a car.

In fact, we worked out in another article that if you want to buy a car in Singapore, you should be earning $7,500 first.

Yes.

It’s that siao.

We also looked at the results of a 2014 international census, which compared how much a Volkswagen Golf 1.4 — a family-friendly hatchback by the way, not some high-end sportscar — would cost across 156 countries.

Volkswagen Golf 1.4
Source: Volkswagen
CountryPrice of a Volkswagen Golf 1.4 (USD)
Singapore$110,479.80
Vietnam$47,427.08
Malaysia$45,724.74
Hong Kong$31,584.64
South Korea$28,033.98
United Kingdom$26,604.59
Australia$24,568.85
Thailand$22,984.98
Japan$21,597.23
United States$20,000.00

Not surprisingly, Singapore came out tops again.

But most importantly, we realised that once we cross the Causeway, the cost of owning a car becomes about 2.5 times cheaper

HOW CAN DIS BE ALLOW?!


TL;DR: Why Is It so #$%&ing Expensive to Own a Car in Singapore?

Singapore is physically small.

This means that the number of cars allowed on Singapore’s roads has to be properly controlled.

To do this effectively, the government decided to push up the price of car ownership through the levying of various fees and taxes such as:

  • Certificate of Entitlement (COE)
  • Open Market Value (OMV)
  • Additional Registration Fee (ARF)
  • Excise Duty
  • Registration Fee
  • Vehicular Emissions Scheme (VES)
  • Other Charges (road tax, IU fee, car plate fee, dealer’s commission, and etc.)

Apart from the OMV of a vehicle, the biggest single fee levied on car owners is probably the COE.

Without it, you wouldn’t be able to own, much less drive the car you bought at the dealership.

Here’s the current COE price:

CategoryCOE Price
(Dec 2019)
COE Price
(Jan 2020)
A (Cars up to 1,600cc and 97KW)$32,889$35,320
B (Cars above 1,600cc or 97KW)$36,000$37,109
C (Goods vehicles and buses)$23,200$24,402
D (Motorcycles)$3,658$3,989
E (Open - All Except Motorcycles)$37,989$38,000

COE Prices in Singapore

Car Icon

Whether you drive or not.

The term, Certificate of Entitlement (COE) is something that all Singaporeans know.

It’s basically a certificate that gives car owners the legal right to register, own, and use a vehicle in Singapore for a period of 10 years.

A typical COE for a sensible sedan car will cost around $30,000 to $50,000.

But as you can see from the wide range, the prices are determined by supply and demand.

So if supply is low and demand is high… then siao liao.

The COE is also the BIGGEST reason why cars in Singapore are so #$%&ing expensive.

What Is the Current COE Price?

There are five categories of COE available to bid for:

  • Category A: Car up to 1,600cc and 97KW
  • Category B: Car above 1,600cc or 97KW
  • Category C: Goods vehicles and buses
  • Category D: Motorcycles
  • Category E: Open (all except for motorcycles)

Here’re the latest COE prices:

CategoryCOE Price
(Dec 2019)
COE Price
(Jan 2020)
A (Cars up to 1,600cc and 97KW)$32,889$35,320
B (Cars above 1,600cc or 97KW)$36,000$37,109
C (Goods vehicles and buses)$23,200$24,402
D (Motorcycles)$3,658$3,989
E (Open - All Except Motorcycles)$37,989$38,000

When Is the Next COE Bidding Exercise?

There are usually two COE bidding exercises conducted by LTA every month.

The next weekly bidding exercise will open on 31 Jan 2020 and closes on 3 Feb 2020.

The available numbers for bidding will be published from 30 Jan 2020.

And the results of the next bidding exercise will be released on 5 Feb 2020.

What If I Bid for the COE Myself? Will It Be Cheaper?

The COE is not something that only car dealers can get.

You can bid for the COE yourself too.

And it’s pretty simple actually.

But whether it’ll be cheaper doing it yourself is a little iffy.

Assuming everyone cooperates and bids low. Maybe $1.

Then you can probably get your COE for a low price.

But knowing how kiasu Singaporeans are and the fact that so many affluent Singaporean drivers can just throw money to get their COE, it’s unlikely that you can get your COE for $1.

How to Bid for COE?

Before the start of the COE bid, LTA will announce how many COEs are available for bidding and what were the previous COE prices.

Note: the previous COE price does not have direct influence on how the COE prices for the next bidding will turn out — most will use it as a gauge.

In order to bid for the COE as an individual, you can do it through a DBS or POSB ATM.

Just select “Electronic COE Bidding” and follow the instructions.

You’ll also have to enter your reserve price which is the amount you are willing to pay for your COE.

The minimum amount for this is a mere $1 (imagine if everyone in the COE bid only bid $1…).

If your bid is accepted, you’ll get a 6-digit Acknowledgement Code which you can use to submit or revise your bid via the LTA Open Bidding site.

FYI: your Bidder ID will be your NRIC or FIN number.

When the COE bidding starts, you’ll need to revise your bid in order to qualify for one of the available COEs.

Also, you won’t know what the dealers or other independent car owners are bidding.

BUT.

You will always know what the lowest bid is.

So if you want your bid to qualify, you have to at least beat the lowest bid.

The bidding will last for three working days.

Once the bidding is closed, the bank will deduct the non-refundable administrative fee of $2 to $10 from your account.

If you were successful in your bid, the bank will also deduct the bid deposit:

COE CategoryCOE Bid Deposit
A, B, C, and E$10,000
D$200

Congratulations!


Open Market Value

Price List Icon

The Open Market Value (OMV) of a vehicle is determined by the Singapore Customs.

It is based on the actual price paid or payable for the vehicle.

The OMV includes:

  • purchase price
  • freight fees
  • insurance, as well as
  • other charges incurred

during the sale and delivery of the car to Singapore.


Additional Registration Fee

Fees Imposed Icon

The Additional Registration Fee (ARF) is a form of tax that is imposed upon registration of a new car.

This tax is calculated based on a percentage of the OMV of a vehicle.

OMV of VehicleAdditional Registration Fee (ARF) Rate
First $20,000100% of OMV
Next $20,001 to $50,000140% of Incremental OMV
Above $50,000180% of Incremental OMV

VES rebates (if any) will be subtracted from the above-listed values.


Excise Duty

Tax Icon

The Excise Duty is another form of tax imposed by the Singapore Customs.

This tax is 20 per cent of the vehicle’s OMV.

No discounts and no buts.


Vehicular Emissions Scheme (VES) Surcharge

Car Emissions Icon

In order to reduce carbon emissions and pollutants like:

  • hydrocarbons
  • carbon monoxide
  • nitrogen oxide
  • particulate matter

the Vehicular Emissions Scheme (VES) is a taxation scheme which was implemented to encourage buyers to choose vehicles that are more environmentally friendly.

Depending on the date of registration of your vehicle as well as the band which it falls under based on the emission scheme, you will enjoy a rebate or pay a surcharge.

Assuming your vehicle is registered from 1 Jan 2018 to 31 Dec 2019:

BandCO2 (g/km)HC (g/km)CO (g/km)NOx (g/km)PM* (mg/km)Rebate**Surcharge
A1A1 ≤ 90A1 ≤ 0.020A1 ≤ 0.150A1 ≤ 0.007A1 = 0.0$20,000N.A.
A290 < A2 ≤1250.020 < A2 ≤ 0.0360.150 < A2 ≤ 0.1900.007 < A2 ≤0.0130.0 < A2 ≤0.3$10,000N.A.
B125 < B ≤1600.036 < B ≤ 0.0520.190 < B ≤ 0.2700.013 < B ≤ 0.0240.3 < B ≤0.5N.A.N.A.
C1160 < C1 ≤1850.052 < C1 ≤ 0.0750.270 < C1 ≤ 0.3500.024 < C1 ≤ 0.0300.5 < C1 ≤2.0N.A.$10,000
C2C2 > 185C2 > 0.075C2 > 0.350C2 > 0.030C2 > 2.0N.A.$20,000

*Not applicable to vehicles registered from 1 Jan to 30 Jun 2018

**Subject to a minimum payment of $5,000 for ARF


Registration Fee

Registration Fee Icon

According to Land Transport Authority (LTA), a Registration Fee of $220 is levied upon the registration of a new car.


Other Charges

Money Bags Icon

As though you haven’t paid enough, there’s also other stuff to pay for like:

  • Road Tax
  • IU fee
  • Car plate number fee
  • Dealer’s commission

You see how owning a car in Singapore can be an expensive affair?


Er… So How Much Does It Cost to Own a Car?

Now that you understand the various fees and taxes involved in buying and owning a car.

Let’s look at how a $19,783 Volkswagen Golf 1.4 costs a whopping $103,400 once it gets to Singapore.

Factors Affecting Car PricesCosts
Certificate of Entitlement (Category A COE)$35,320
Open Market Value$19,783
Additional Registration Fee$19,783
Excise Duty$4,234
Registration Fee$220
Vehicle Emissions Scheme$0
Other Charges$24,060
Final Price$103,400

Note: figures quoted from sgCarMart.


Should I Renew My COE or Buy a New Car?

It seems like a lot of money to be paying for a COE.

So once it’s near the 10-year mark, a lot of car owners will wonder if it’s worth renewing it.

Or does it make more (financial) sense to just buy a new car and get a brand new COE?

We took to the Seedly Community to understand what people’s views are with regard to this dilemma.

  • Ken Tan
    Bought a new car and sort of regretted it. Should have gotten a resale instead.

 

  • Sau Yee Fong
    My car has less than 2 years worth of COE and I intend to renew the COE for another 10 years. Just to share with you my thought process, hope it will be helpful to you. My car has low mileage (75K as of now) and hence I am betting that there will be less wear and tear. My car, if bought in today’s context, would be classified under CAT B. But I get to renew my COE under CAT A since it was under CAT A eight years ago. So I get to enjoy CAT B power by paying CAT A COE. With the introduction of VES, I would expect COE premiums stay relatively constant at the current level. An old car that renews COE is not subjected to VES but a new car is.

 

  • Bea Tang
    Renewed COE (cash only) last year at a 10 year low (but still 4x of the value it was when I first got the car). Depreciation for next 10 years works out to $5k+ per annum (including loss of PARF but excluding higher road tax) which is far lower than a new car of similar capacity (2000cc). Having said that my mileage was low (<70k) and the car was in good condition. I did, however, stock up on some parts as Honda no longer manufacture that model and I was already facing difficulty getting parts.

 

  • William Seah
    How well does your car run? If maintenance is cheap, and the car works, then sure renewing is a good idea. Having said that, most cars will need a certain degree of higher maintenance cost as it gets older due to lack of spare parts, or even wear and tear of parts (gearboxes, for example, are designed to run for possibly 200k km give or take, which after ten years is a possibility) so some repairs won’t show up till after you renewed. In my case, I renewed my COE. After that, I also renewed my transmission, clutch, Aircon, and will have to renew my suspension soon. Such wonderful opportunities for renewal only came after I bought a COE back in 2016. So beware!

 

  • Lucas AI
    Take your car’s scrap value into consideration. (Scrap value + renewed COE price) divided by the number of years renewed = depreciation per year. Hence, smaller or cheaper b&b cars usually more worth to renew as they have lower OMV. With that in mind, a new car does not necessarily mean high depreciation. A brand new small Toyota can have a depreciation of about 8-9k. This is similar to a Toyota with renewed COE for 5 years. The difference lies in the financial outlay. Furthermore, do note that a renewed COE Car has road tax that will increase year on year till its 50% more. So then again, it’s more expensive to renew a bigger capacity car.

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About Ming Feng
A stint in Bloomberg gifted me with a beer belly, which only grew larger when I moved on to become a Professional Trader. Now I turn caffeine into digestible finance-related content.
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