Difference between revisions of "Buy a Car in Singapore"

#Make sure you can afford to own a car. Keep in mind that the Singaporean government has put into place a variety of taxes and fees to discourage vehicle ownership that make it significantly more expensive compared to other countries. For example, a typical sedan in Singapore often ends up costing more than the average price of a home in the United States.<ref name="rf1">http://www.bloomberg.com/news/articles/2012-06-04/singapore-family-sedan-matches-cost-of-a-u-s-home</ref> There are quite a few costs to take into consideration in addition to the market price of your potential car:

#*Other taxes and administrative fees add up. You will need to pay a flat registration fee of S$140 along with an Additional Registration Fee that will usually exceed the open market value of the vehicle itself. You will also be charged an Excise Duty equal to 20% of your car's open market value.<ref name="rf2">http://www.lta.gov.sg/content/ltaweb/en/roads-and-motoring/owning-a-vehicle/costs-of-owning-a-vehicle/tax-structure-for-cars.html</ref> Finally, there will be a 7% Goods & Services applied to the open market value plus its Excise Duty.<ref name="rf3">http://www.livinginsingapore.org/how-to-buy-a-car-in-singapore/</ref>

#*Because space is at a premium, most Singaporeans must also pay to park their cars at home and work. A typical month of parking costs $180.<ref name="rf4">http://blog.moneysmart.sg/car-ownership/the-true-cost-of-owning-a-car-in-singapore</ref>

#*Loan tenure for motor vehicles cannot exceed 5 years.<ref name="rf5">http://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Commercial%20Banks/Regulations%20Guidance%20and%20Licensing/Notices/MAS%20Notice%20642_Banks_phy%20disability%20exclusion_15Apr13.pdf</ref>

#Know when the next bidding period is. Read through the Land Transport Authority's COE Open Bidding Demonstration Kit & User Guide for the most up-to-date information.<ref name="rf6">http://www.lta.gov.sg/content/ltaweb/en/ocoe.html</ref>. Ask anyone you know who has recently successfully won a bid for a COE what to expect.

#*The Land Transport Authority (LTA) will release an announcement before each bidding period that will include the number of COEs being released and the exact start and end times for the bidding exercise.<ref name="rf7">http://www.lta.gov.sg/content/ltaweb/en/roads-and-motoring/owning-a-vehicle/vehicle-quota-system/certificate-of-entitlement-coe.html</ref>

#*Category E: A special category that includes all the vehicle types described in Categories A-D. This category is usually the most expensive type.<ref name="rf8">http://blog.moneysmart.sg/car-ownership/understanding-singapores-coe-system</ref> However, if you choose to register a motorcycle with a Category E COE, you will only need to pay one third of the quota premium.<ref name="rf9"> http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/bid_coe.html</ref>

#Be prepared to bid. You will need a bank account with either DBS Bank (or its subsidiary POSB) or OCBC Bank. If you are bidding on behalf of a company, you will need an account with UOB. This account must contain at least enough money for the fixed bid deposit, which is S$200 for a Category D and S$10,000 for all others.<ref name="rf10">http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/bid_coe.html</ref>

#*DBS/POSB customers must place their bids through DBS/POSB ATMs. OCBC users can do so through phone banking. Individuals using UOB will submit through an Internet banking system.<ref name="rf6" />

#*If you find the bidding process to be a headache, car dealers offer a variety of packages where the COE is included in the car's list price. Just keep in mind that COEs obtained through this method are often more expensive.<ref name="rf8" />

#*Keep in mind that the final COE price will be one dollar more than the highest unsuccessful bid, not the actual reserve price set by the successful bidders.<ref name="rf11"> http://www.lta.gov.sg/content/ltaweb/en/roads-and-motoring/owning-a-vehicle/vehicle-quota-system/certificate-of-entitlement-coe.html</ref>

#*You may revise your bid as many times as you like. However, keep in mind that you may not revise your bid lower than its current amount and that each revision with incur an additional small administrative fee.<ref name="rf9" />

#Pay for your COE. You must pay the difference between the bid deposit and the final quota premium upon registration. Bids for Categories A, B, and D are valid for 6 months, while those for Categories C and E remain valid for only three months. If the full amount has not been paid by that time, the bid is no longer valid and you must forfeit your initial bid deposit.<ref name="rf10" />

#Revalidate your COE after 10 years. If after 10 years you still would like to hold onto your COE, you must renew it. For a 10 year renewal, you must pay the new current Prevailing Quota Premium, which is an average of the COE prices in the last 3 months. 5-year renewals are subject to half this price.<ref name="rf7" />

#*Once a vehicle has been registered with a 5-year COE, it is no longer eligible for renewal with a 10-year COE.<ref name="rf12">http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/maintain_vehicle/coe1.html</ref>

#Have a firm idea of what kind of car you want and stick to it. A trait common to car salespeople in most countries is that a major part of their job is to upsell the customer. In Singapore where costs related to purchasing a vehicle are extremely inflated, it is especially important to not let yourself get talked into an even pricier car with features you neither want nor need.<ref name="rf13">http://www.livinginsingapore.org/how-to-buy-a-car-in-singapore</ref>

#*If you plan on paying in cash, do not say so until after negotiating for the price you want. Most car salespeople in Singapore make their profits from loans. If you tell them you want to pay in cash in the beginning, they are not likely to give you a better deal than the list price.<ref name="rf13" />

#Shop around. Buying a car is likely to be one of the biggest purchases you'll make in your lifetime. Visit multiple dealerships and compare prices. Test drive as many vehicles as you can. Make sure the car you're buying is the one you want to drive for the next few years. You don't want to spend so much time and money only to end up with buyer's remorse.<ref name="rf13" />

#*Do not sign any "blank hire purchase" forms. If you sign a blank document, the dealer may tack on extra fees without your consent.<ref name="rf14">http://www.oneshift.com/used-car-buying-guide/695/pre-owned-car-buying-guide-part-5-protecting-yourself/2</ref>

*The car buying process is the same for both Singaporean citizens as it is for foreigners.<ref name="rf15">http://singapore.angloinfo.com/information/transport/vehicle-ownership/buying-a-car</ref> If you are new to Singapore, it's best to not tell your car dealer. As with first-time buyers, if you signal your inexperience, your dealer may try to take advantage.

*School buses and emergency vehicles are exempt from the COE process.<ref name="rf16">http://www.expatsingapore.com/content/view/1152</ref> Voluntary welfare organizations are also exempt from paying the COE and the pricy Additional Registration Fee when purchasing a passenger van used in running direct welfare services.

*In many areas of the world, cars are a necessity due to a lack of reliable public transportation. In contrast, because of its small size and high population density, Singapore has invested in an extensive public bus and rail system. Car sharing is also a very popular option.<ref name="rf17">http://www.todayonline.com/singapore/life-without-wheels?singlepage=true</ref>

*Consider buying a motorcycle instead. The average cost of a motorcycle COE is roughly one tenth of other vehicle classes.<ref name="rf18">http://www.oneshift.com/new_cars/lcoe.php</ref>

*Individuals are limited to one COE bid per exercise. Because of this, you cannot bid for a COE in more than one category or get a COE for more than one vehicle at a time. However, businesses, such as car dealerships, are exempt from this and can place multiple bids.<ref name="rf9" />

*A major area for new car sales in Singapore is at the Leng Kee Car Belt. There you will find over a dozen different dealerships selling most international car brands.<ref name="rf19">http://www.sgcarmart.com/direction/index.php?L=Leng_Kee_Car_Belt</ref>

*Because of Singapore's small size, many car dealerships have a monopoly on certain car brands.<ref name="rf15" />