Singapore is one of the most expensive places in the world to own a car. By breaking down the different components that make up the basic cost of the car, it is not that difficult to understand why it is so.The total basic cost of a car i.e. the cost of a car without factoring in the COE yet since COE can varies, is made of up of the components below.
1. OMV
OMV stands for Open Market Value. OMV is assessed by the Singapore Customs, taking into account of the purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car from country of manufacture to Singapore. In short, it is the sum of the cost of the car and the cost of bringing it over to Singapore. You can get an estimated OMV of a particular car model on LTA's website here.
2. Custom duty
Custom duty is the tax or the tariff that needs to be paid for the import of goods from other countries to Singapore. Currently, it stands at 20% of the OMV.
3. GST
GST stands for Goods and Services Tax. This tax is imposed for all transcations of goods and services in Singapore. Currently, it stands at 7%. For the cost of the car, it is 7% of the sum of the OMV and Custom duty.
4. ARF
ARF stands for Additional Registration Fee. It is a sum of money which will be paid to the LTA and a portion of this amount of money will be returned back to you, depending on the usage period of the car if you decide to deregister your car. As of now, the ARF stands at 100% of the OMV.
5. Registration Fee
This is rather self-explanatory. It is the cost required to register the car. Currently, the registration fee cost $140.
With all the components above, you will be able to calcuate the basic cost of a car by knowing the OMV.
For example, you wish to make a purchase of a Honda Civic 2.0L car with automatic transmission. The estimated OMV of new cars of this model registered last month as stated on the LTA's website here is $28981. Thus the basic cost of the car can be computed as below,
OMV = $28981
Custom Duty = 20% x $28981
= $5796
GST = 7% x (OMV + Custom Duty)
= $2434
ARF = 100% x OMV
= $28981
Registration Fee = $140
Total Basic Cost = $28981 + $5796 + $2434 + $28981 + $140
= $66332
Thus it can be seen that even without including the COE, the total basic cost of an car in Singapore is already twice the amount of the OMV due to the various fees and taxes being imposed. Owning a car can be a very expensive event in Singapore indeed.
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Hi Kay,
ReplyDeleteYes....and that's not counting in Road Tax, Parking and Petrol ! If we add those in, it's really scary. COE is now above $10,000 for most types of cars so we must add that in too. One more thing I can think of is periodic repairs and maintenance to keep the car fit as a fiddle. Assuming you take a 7-year loan, the interest portion could add another 15-20% to the cost of the car. Oh yes, and let's not forget insurance premiums too.
So all in all, for that same Honda Civic, it would probably cost close to $100,000 over 7 years.... :P
Cheers,
Musicwhiz
Hi Musicwhiz
ReplyDeleteThat is true. On the other hand, if you can invest $100,000 for 7 years well enough, the returns alone at the end of the investing period may well be enough to buy you another car.
However, a car is being viewed as a symbol of prestige by some. Even if it cost an arm or leg, a car may still be at the top of the list of indulgences for many.
Kay
Hi Kay,
ReplyDeleteI got here from Feedjit and I really like this post. Its very informative and lucidly explained.. thanks
Kay- do i have ur permission to blog roll u? as you will see, Im primarily a mommy blogger based at Singapore and I really like ur write ups as they are informative and would like to keep reading them regularly
ReplyDeleteHi,
ReplyDeleteThanks for your compliment. I'm glad that you like my write ups. Feel free to blog roll me if you wish to.
Kay