Owning a car comes with a host of perks – being able to bid adieu to public transport, not fretting about endearingly talkative taxi drivers and getting yourself anywhere independently to name a few.

However, whilst it’s exciting to think about driving yourself around, it’s important to know what goes into this milestone purchase so you can save up for it and avoid any surprises.

Here are some factors to prepare yourself (and your wallet) for.

Kick it into gear

There are five main price points any future car owner should familiarise themselves with.

OMV (Open Market Value)

This is the baseline price which refers to the cost of the same car at importation. Determined by the Singapore Customs, it includes the purchase price, freight costs, any insurance or charges needed for sale and delivery.

A handy guide is available if you want to gauge the OMV of your dream car.

Excise Duty

Simply put, excise duty is a form of tax imposed on cars in Singapore, which is 20% of the OMV – this does not include an additional 8% GST charge (as of 2023).

COE (Certificate of Entitlement)

The famous COE is a mandatory registration which you need to bid for and renew every 10 years, allowing you to drive your car on Singapore roads.

There are five types:

The COE is also market-driven, so it fluctuates according to the demand for vehicles. As of January 2023, it has peaked at S$107,889 in category E:

 

^{Source: Motorist Singapore} 

ARF (Additional Registration Fees)

Another form of tax payable for cars in Singapore is the ARF. This is a registration tax based on the OMV of your car:

Vehicle Emission Scheme (VES)

Introduced in 2018, the VES can be a rebate or surcharge affecting the ARF paid, depending on the pollutants emitted by your ride of choice.

Dealer’s Margin

This is a fee paid to your car dealer, i.e., their profit, and depends on the car. It can be an added cost anywhere from 10% to 50% of the basic cost – meaning essentially, the OMV, Excise Duty, COE, ARF, GST and VES Surcharge/Rebate is compared against the car’s sale price, and the resulting difference is what you’d pay as the dealer’s margin.

On the road

We wish that’s all we need to fork out for a car, but it’s worth noting that even after all is said and done and you’ve purchased your car, there are the extra bits.

From season parking, petrol top-ups, maintenance to car insurance as well as personal accident insurance, there’ll be recurring costs that come with car ownership – so plan carefully for the smoothest road to getting your new car!

 

Notes

^{The above information is accurate as at 17 January 2023.}

^{1. Source: One Motoring, Upfront Vehicle Costs, accessed on 3 January 2023.}

^{2. Source: Motorist Singapore, Latest COE Prices and Bidding Results 2023, access 9 January 2023.}