This has been a question that I have been curious about for quite some time, what justifies the reasoning behind the extraordinarily expensive car prices in Singapore? I have been asked this question a number of times but did not have any concrete answers, so this lead me to unearthing the answer.
Well firstly. lets state the obvious, car prices as high due to the land constraint, keeping the number of privately owned cars on the road in control to subdue traffic congestion, help control the emissions of green house gases and keep the air clean and reduce pollutions.
So lets delve straight into it and let us compare a particular model of a car and its price in America and Singapore. For example a Toyota Camry 2011, from Europe Car News website, in America, the model base price is at $ 21, 240 (USD) which is $27,445.40 (SGD). The price of a Toyota Camry 2011 in Singapore listed online from Sgcarmart.com cost $157,000. That is a difference of $129, 554.60 (SGD), and both the cars sold in America and Singapore are manufactured in Japan.
What I want to know and find out is how does the Land Transport Authority (LTA) calculates what is the right amount to slap on to a particular car when sold in Singapore? Is it justifiable or not. Are they transparent with their frameworks or methods in coming up with the cost of a car sold in Singapore?
From the LTA's website, on Vehicle Ownership, the only breakdown the individual charges that need to be paid when owning a car. Which compromises of:
1. Registration Fee
2. Additional Registration Fee which is that of Open Market Value (OMV) ranging from 100% to 130%
3. Certificate of Entitlement (COE)
4. Exercise Duty (20% of OMV)
5.Life Span of 10 years upon winning the COE.
The above figures are only relevant to buying a car and does not include all the other additional fees incurred once a car is owned and driven in Singapore, like road tax and insurance.
No where on the LTA's website did I find them explaining how do they calculate OMV and COE of cars.
Although there is an online tool which calculates the OMV for you based on a selected car model, available at, http://app.lta.gov.sg/motoring_vo_omv.asp
I guess according to them we need not know the process behind it, but just the end result?
Anyways upon searching more, I did find out from One Motoring's website what does the OMV compromises of, taken from there website listed below,
" What is OMV? It stands for Open Market Value.OMV is assessed by the Singapore Customs (Tel: 6355 2000), taking into account purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car from country of manufacture to Singapore."
Apart from the OMV, from Motoring One again, the other miscellaneous fees include, Vehicle Tax Structure, Goods & Services Tax (GST) of 7%, Vehicle Number Plate, on average, the cost of a set of normal number plate will range between $25 to $30 (special numbers like 888 or 9 can cost an extra of about $5000 dollars and above), Motor Vehicle Insurance and Profit Margin for Motor Distributors after taking into consideration the above variables.
So from researching and reading up, OMV constitutes the amount is cost to bring a vehicle into Singapore without being able to drive it on the roads, and how much your vehicle is valued. This price is assessed by the Singapore Customs, which includes purchase price, freight, insurance and all other charges incidental to the sale and delivery of the vehicle to Singapore.
That is the first major aspect of the cost of purchasing a car in Singapore. The other aspect is that of attaining a Certificate of Entitlement (COE). We all know the COE was instituted in 1990 to limit the number of car ownership in Singapore.
For more information about the COE you can visit the National Library of Singapore website at http://infopedia.nl.sg/articles/SIP_1005_2006-04-07.html
The COE prices are differ along categories which are broken up into CCs or vehicle types. I have come across so many sites explaining to me the various types of COEs (Non Guarantee COE, Guarantee COE at $XX, etc), guides to purchasing COE and so on. Also if you decide to sell off or de-register your car, how much of your COE can you get back. Based on certain calculations and depreciation of the vehicle you can get back a certain sum of your COE.
It seems that my search for finding out the calculation of COE prices is more elusive than I thought. There may be information available which justifies the figures for the COE prices but it just seems to difficult to find, or at least for me. From all that a have read or been trying to find out, it has lead me to conclude that, it seems as though the prices of the COE is not questioned and accepted.
Although I do understand the reasoning for the measures taken by the Singapore Government to curb the number of privately owned vehicles on the road, the transparency for the figures that one has to pay in order to own a vehicle is not openly defined. You just have to pay and not know what exactly does the payment compromises or constitutes of.
I sure do hope this that shed more light on the understanding of car prices in Singapore. It has surely painted a clearer picture for me. Although not all the questions could be answered, the majority of them have been put to rest.
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