Have you thought about owning a car in Singapore? As a matter of fact, Singapore is a unique country where cars are (in)famously known for its exorbitant price tag. In addition to the Certificate of Entitlement (COE), there are five other costs that add up to the car’s final price tag. With this in mind, let’s break down all these cost in this post.

Table of Contents:

1. The Most Popular Car in 2021
2. Registration Fee (RF)
3. Open Market Value (OMV)
4. Additional Registration Fee (ARF)
5. Excise Duty
6. Enhanced Vehicular Emissions Scheme (VES)
7. Certificate of Entitlement (COE)
8. Total Cost of a Car
9. Other Cost
10. Final Thoughts

One Minute Summary:

• Toyota is the most popular car make for 2021 – accounting for one-fifth of the entire car population in Singapore.
• Even though the physical value of a Toyota Vios is $13,900, its retail price costs eight times more.
• For the most part, the Certificate of Entitlement (COE) accounts for more than half the cost of the car!
• All things considered, Price of Car = Registration Fee + Open Market Value + Additional Registration Fee + Excise Duty + Enhanced Vehicular Emissions Scheme + Certificate of Entitlement
• In truth, the mentioned cost is merely the upfront cost of owning a car in Singapore. It is important to realise that you also need to consider the ongoing cost of owning a car in Singapore.

Part 1: The Most Popular Car in 2021

Summing up, there are over 80 brands of car in Singapore. In detail, the most popular car make is

1. Toyota (22% of the car population);
2. Honda (16% of the car population);
3. Mercedes Benz (10% of the car population).

By and large, it is impressive to note that Toyota accounts for one-fifth of the entire car population in Singapore. Coincidentally, it was also the brand of the first car that I owned – feeling nostalgic now~ Since it is the most popular car here, let’s use the cheapest consumer car from Borneo Motors, Toyota Vios as a reference for the rest of this post.

At this time, the basic model (1.5 E Grade (A)) costs $109,888. By comparison, the same car costs approximately RM82,593 in Malaysia, or SGD27,531 (Assume SGD 1 = RM 3). Emphatically, this means that it costs four times more to own a car in Singapore than that in Malaysia! Given that marginal difference, let’s determine the components that make up for this figure.

Part 2: Registration Fee (RF)

Firstly, owning a car begins with paying $220 for the car’s registration fee. To point out, this is probably the cheapest fee in the entire price tag of owning a car.

Part 3: Open Market Value (OMV)

Secondly, we look at the open market value of the car. To explain, the open market value is the price paid (or payable) when a car is imported into Singapore. For this purpose, Singapore Customs will assess the amount to be paid. To illustrate, the open market value includes the purchase price, freight, insurance, and other charges incidental to the sale and delivery of the car. In summary, the open market value is also known as the car’s fair trade value. In the case of Toyota Vios, its open market value is $13,900.

Part 4: Additional Registration Fee (ARF)

When you register a car in Singapore, you need to pay a tax known as the Additional Registration Fee. To this end, the exact amount depends on the car’s open market value (OMV). To sum up,

• For the first $20,000 OMV of the car, the ARF rate is 100%;
• For the next $30,000 OMV of the car, the ARF rate is 140%;
• Above $50,000 OMV of the car, the ARF rate is 180%.

Given that the open market value of Toyota Vios is $13,900, it falls within the first tier of the additional registration fee. As a result, you need to pay an additional registration fee that is equals to 100% of the car’s open market value; i.e. $13,900.

Part 5: Excise Duty

Fourthly, Singapore Customs implements an excise duty for the imported goods. For this purpose, you need to pay a levy that is equivalent to 20% of the car’s open market value; i.e. $13,900 x 20% = $2,780.

Part 6: Enhanced Vehicular Emissions Scheme (VES)

Depending on the level of pollutants that your car emits, the Vehicular Emissions Scheme will reward or punish you. On the whole, Land Transport Authority (LTA) takes the following five pollutants into consideration:

• Carbon Dioxide (CO2);
• Hydrocarbons (HC);
• Carbon Monoxide (CO);
• Nitrogen Oxides (NOx);
• Particulate Matter (PM).

According to the test results by Land Transport Authority, Toyota Vios emits 131 g/km of carbon dioxide. Based on the Enhanced Vehicular Emissions Scheme, it falls under Band B. Accordingly, there is neither a rebate nor a surcharge imposed for the vehicle.

Part 7: Certificate of Entitlement (COE)

Finally, let’s address the most expensive component for owning a car in Singapore, that is the Certificate of Entitlement (COE). To explain, the Certificate of Entitlement gives you the right to own and use a car in Singapore. According to the Land Transport Authority,

1. Anyone who wish to register a new vehicle in Singapore must first obtain a Certificate of Entitlement. It is important to realise that the vehicle must be registered in the appropriate vehicle category.
2. Moreover, a COE represents a right to vehicle ownership and the use of the limited road space for 10 years.

At the same time, Singapore uses a Vehicle Quota System to control the vehicle population and to cap the number of new vehicles that can be registered. To that end, it forms one of the key pillars in our traffic management strategies. For this purpose, the Vehicle Quota System classifies vehicles into five COE categories. If you wish to register a car, then you need to make a successful bid for a COE. Based on January 2022’s COE bidding results,

• Category A (Car up to 1,600cc & 97kW (130bhp)): $57,898
• Category B (Car above 1,600cc or 97kW (130bhp)): $82,001
• Category C (Goods vehicle and bus): $43,001
• Category D (Motorcycle): $10,000
• Category E (Open – all except motorcycle): $83,911

Given that specifications for Toyota Vios, its engine capacity is 1,496 cc. Consequently, you will need to pay $57,898 for the car’s COE (under Category A).

Part 8: Total Cost of a Car

To sum up, the price of a car = Registration Fee + OMV + ARF + Excise Duty + Enhanced VES + COE. Based on the figures mentioned above for a Toyota Vios, that is

$220 + $13,900 + $13,900 + $2,780 + 0 + $57,898 = $88,698.

However, the listed price for the same car is $109,888. This is because there are other costs that you need to factor in as well. For instance, you need a middleman (or a dealer) to ship the car to Singapore. Under those circumstances, you need to pay for his overhead, together with commission amongst other fees and charges. Emphatically, this explains why you are paying a 23% premium for the car!

Part 9: Other Cost

In addition, there are also other costs that you need to take into account for owning a car in Singapore. For example, all Singapore registered vehicles must be fitted with an In-Vehicle Unit (IU). This is so as to enable you to pay Electronic Road Pricing (ERP) gantries and Electronic Parking System (EPS) carparks. For this purpose, the unit cost is $150 before GST and installation.

Besides, if you have a preferred vehicle registration number, then it will be another cost to submit a bid for it. Otherwise, LTA will assign a random vehicle registration number to you automatically (at no charge).

Part 10: Final Thoughts

To conclude, the physical value of a car (in our case a Toyota Vios) is $13,900. After taking into account the paperwork and the respective taxes, its cost increases six-folds. Following that, you need to pay for the dealer’s profit margin. As a result, you end up paying eight times the physical value to own a car in Singapore!

Despite that exorbitant price tag, we still see many cars on the road. In fact, the number of cars have increased by 6.7% since a decade ago, i.e. 647,359 cars (as at 2021). Seeing that increment, are these measures really that effective in controlling car ownership in Singapore? In any case, if you intend to buy a car, then consider subscribing to my newsletter. In due time, you will be the first to know when I publish the next post on the Ongoing Cost of Owning a Car in Singapore. See you then!