Buying A Car in Singapore 101
If you live in Singapore, chances are, you’ve probably been taking public transportation or bumming rides with your officemates and friends for years. If you think it’s finally time to get your own set of wheels, you’re in for a treat.
There’s no doubt that buying a car in Singapore is incredibly exciting, albeit expensive. For many Singaporeans, owning a car is no longer a luxury, but a necessity.
But if you want to learn how to buy a car in Singapore, where do you even begin?
There are tons of things you should consider. To help ease this process, we’ve compiled this comprehensive guide for you.
Here at OMY Singapore, you will discover the following:
What’s the Easiest Way to Buy a Car in Singapore?
It’s no secret that Singapore’s car ownership rules are very strict. If you want to know how to buy a car in Singapore, the easiest way to do this is to get one through a dealer. Some of the best dealers in Singapore include:
- ST Cars SG
- Cars and Stars
- Speedo Motoring
- Vincar Pte Ltd.
- Lay Auto
Authorised dealers and parallel importers allow budding car owners like you to test drive vehicles before your purchase. Most of these establishments can be found along Ubi Industrial Estate and Leng Kee Road. You may be able to find better prices when you look for cars from parallel importers, though.
Some cars are available for purchase through Carro, SGCarMart, OneShift, and other online marketplaces. Most sellers on these platforms also offer vehicle inspections, as well as financial planning that you can use to your advantage.
Getting A Licence in Singapore
If you want to own and drive a car in Singapore, you first have to get a driving licence to be able to use it. That said, this can be an extremely important licence even for those who don’t want to buy a car. For example, you can use it if you want to borrow a car from a friend, rent a car to go around the city, or drive your company vehicle.
Prepare at least S$2,000 to get a licence. The cost can be broken down into the following:
- Driving lessons (private vs. school)
- Time in which you took your lessons (off-peak vs. peak)
- Number of lessons you need
- Type of licence (auto or manual)
How To Buy A Car In Singapore: Major Costs You Need To Cover
Ready to learn how to buy a car? Here are the costs you need to prepare for when you buy a new car in Singapore.
Open Market Value
The OMV refers to the baseline price of the car. This amount is what people in other countries pay for the same car you’re getting.
Excise Duty And GST
This is a tax that is imposed on some goods by Singaporeans such as petrol and cars. Currently, the excise duty on cars is 20% of the OMV. You also need to factor in an additional 7% GST on the OMV and Excise duty.
Certificate Of Entitlement
COE was introduced in Singapore to curb the vehicle population. This market-driven certificate is needed for cars to be able to drive around the country. For example, if the car demand is high, prepare for the price of COE to increase.
There are different categories of COE namely, A, B, C, D, and E, and each bidding period will have a different quota for available COEs per category.
||Passenger vehicles that have an engine capacity of 1600cc and below
||Passenger vehicles that have an engine capacity above 1600cc
||Buses and vehicles used for transporting goods
||Special category for all vehicles described in Categories A-C
Category E is usually the most expensive category.
Generally, car dealers will bid on your behalf. However, you may also make a direct bid through a DBS ATM, or enter your bidding information on the COE website. However, you need to do a S$10,000 deposit, which can be a deal-breaker for many car owners.
Additional Registration Fee
Also called ARF, this refers to the tax for all cars during registration. This is based on the OMV of the vehicle you’re getting. Take a look at the table below.
|Open Market Value
||Additional Registration Fee
||100% of the Open Market Value
|S$20,000 to S$50,000
||140% of the Open Market Value
||180% of the Open Market Value
Generally, here are the documents you need to prepare for your registration:
- Notification of COE (issued by LTA as Temporary COE)
- Certificate of Insurance
- Form R01/R01A or Application for Registration and Licensing of a Motor Vehicle/Revised Off-Peak Car
- Immigration Pass/Employment Card that bears your Foreign Identification Number (FIN). This should be issued by the Immigration & Checkpoint of Singapore (ICA) or Ministry of Manpower (MOM)
- Notice of Approval with the issued Vehicle Approval Code (VAC)
You also need to pay for this expense which ensures dealers earn a profit for the cars they are selling. This can be between 15% to 50% or more, depending on the car you’re getting.
How To Buy A Car In Singapore: Costs You Need To Cover After Getting Your Car
Let’s pretend you already got your dream car. The expenses don’t end there. Here are the expenses you need to take care of after you buy a car.
The law requires all vehicles on the road to be covered by insurance. After you buy car Singapore, prepare to pay roughly S$1,250 annually for comprehensive insurance coverage. Hopefully, you won’t need to claim your insurance, but it’s still better to have peace of mind and be sure to protect your money from unexpected expenses such as accidents. Take a look at our guide on the best car insurance in Singapore.
Interest On Your Auto Loan
If you took out a car loan to buy a car, you also have to consider the interest of your loan.
You need petrol for your vehicle to run. An average car owner in Singapore spends S$50 to S$100 a week on petrol. It’s best to take advantage of the credit cards that offer petrol cash backs and discounts to decrease your overall petrol cost.
Check out our in-depth guide on the best petrol credit cards.
This depends on your car model. Annual road tax usually starts at S$500. If you have a luxury car, prepare to pay more.
After you buy new car, you can’t just park it anywhere. For those who live in an HDB flat, parking is around S$100 per month. If you need to park in your place of work, factor in that cost as well. For some areas, you need to pay between S$0.50 to S$5 every 30 minutes for parking.
Provided you bought a secondhand Singapore car, prepare to shell out more money for maintenance. Usually, you can save on maintenance costs if you buy a new car, although you’d still have to spend for an oil change, car check-ups, and the like.
Can Foreigner Buy Car In Singapore?
Absolutely! Foreigners are permitted to buy a car in Singapore.
Various licenses are accepted in the country. For example, foreigners can use a valid licence with an International Driving Permit or IDP. Without this, an English official translation of the licence is required.
For foreigners from ASEAN member countries, an IDP is not required. However, if you’re already staying in Singapore for over 12 months from your last entry date, you are required to convert your foreign licence into a Singaporean one.
Do You Need A Licence To Buy A Car In Singapore?
No. You don’t need a licence to buy a car. However, if you plan on driving the car you bought, then you need one.
How Much Should You Earn to Buy A Car?
One of the most important things you need to find out if you want to learn how to buy a brand new car is whether or not it fits your budget. Although there’s no set amount that you should earn to be able to buy yourself a car, banks recommend that you should not spend more than 30% of your annual income towards your vehicle, including your petrol, maintenance costs, insurance, and driver (if you’re paying for one).
How Much Is The Downpayment On A Car In Singapore?
The downpayment of new cars depends on the OMV of your car. If you want to get a vehicle with an OMV above S$20,000, the minimum downpayment falls around 40%. For cars below S$20,000, the minimum downpayment is 30%.
Why Is COE So Expensive?
As stated above, the price of COE is based on market demand. In recent months, COE values have reached an all-time high in many years. The reason is that the supply is low. For example, on 17 August, the COE for larger cars in Category B closed at a staggering S$112,001.
A Word From OMY
Buying a car in Singapore is a major undertaking. The key to achieving this milestone is proper planning. When you buy a car, you’re investing in something worth much more than money.
It means you’re paying to save time on commutes, go wherever you want anytime, and be more productive.
Now that you know how to buy a car in Singapore, you’ll finally be on the road in no time.