Car prices in Singapore are out of this world. Taxes and regulations have driven up the cost of mass market machines, essentially pricing even your bread-and-butter cars out of the reach of your average Joe.
Our Singaporean readers probably already know the reason behind high vehicular costs in the little red dot. But there is a surprising number of Paddleshiftsg readers who aren’t Singaporean.
As such, we’ve put together an article to dissect a car’s sticker price in Singapore, and shed some light on why cars are so expensive in Singapore.
Additional Registration Fee (ARF)
The ARF is a tax imposed when you first register a vehicle. It is calculated based on a percentage of the Open Market Value (OMV) of your car. The OMV is assessed by the Singapore Customs, taking into account the purchase price, freight, insurance and all other sale and delivery charges for importing the vehicle to Singapore.
Refer to the table below for a detailed breakdown on how ARF rates are calculated.
| Open Market Value (OMV) | ARF Rate (% of OMV to pay) |
| First $20,000 | 100% |
| Next $20,000 (i.e. $20,001 to $40,000) | 140% |
| Next $20,000 (i.e. $40,001 to $60,000) | 190% |
| Next $20,000 (i.e. $60,001 to $80,000) | 250% |
| Above $80,000 (i.e. $80,001 and above) | 320% |
Do also factor in budget for the Excise Duty. This sum works out to be 20% of your OMV value.
Certificate of Entitlement
Even if you aren’t local, chances are that you’d have heard of something called the COE (short for Certificate of Entitlement). In the crudest sense, it is a permit that allows car owners to register their vehicles for use on the roads.
There’s a limited quota every month, with allocation determined by a government body in quarterly reviews. Usually, car dealers are the ones bidding on their owners’ behalfs. The highest bid will then become the final cost of each COE in its category.
Vehicular Emissions Scheme
In a bid to further incentivise the adoption of eco-friendly vehicles, the CVES was originally introduced back in 2013. It was then refined and brought up to date initially in 2018, before a further revision (and a rename) brings us to the scheme that we know today.
There are 5 bands in the VES. The vast majority of EVs and Hybrids fall into the cleaner ‘A1’ and ‘A2’ bands. These will net the car owner a rebate, of $25,000 and $15,000 respectively. Rebates for ‘A2’ will drop to just $5,000 from January 2024 onwards though. VES B banded cars are ‘Neutral’, and do not attract either a rebate or a surcharge.
High performance cars typically fall into the more polluting ‘C1’ and ‘C2’ categories, and these are then hit with a surcharge of $15,000 or $25,000 respectively.
But Wait, There’s More
There are other taxes and fees involved in car registration in Singapore. You’ll need to fork out a registration fee of $350, and an overall processing fee of $27.82. If you are looking to import a used car, it has to be less than three years old, and you’ll need to pay an additional $10,000.
Road Tax in Singapore is calculated based on engine capacity for ICE cars, and power output for EVs. Also, an additional flat component of Road Tax will be levied on electric vehicles, with those registered from 2021 onwards subject to an extra $700.
Diesels will also incur additional taxation, at $0.20 per cc for 6 months, less $100. This is subject to a minimum payment of $100 per 6 months.
On-Road Cost
If you were wondering, here’s the equation to work out the on-road car cost.
Final Car Cost = Registration Fee (RF) + Additional Registration Fee (ARF) + Certificate of Entitlement (COE) + Excise Duty + VES + EEAI + Road Tax
Confused? Let’s put all these figures into a tangible equation, using a used import Porsche Taycan as an example, and using the COE premiums from the October’s 2nd Bidding.
Here’s a breakdown of the ARF payable.
| OMV Value: $147,000 | ||
| Open Market Value (OMV) | ARF Rate (% of OMV to pay) | ARF Amount |
| First $20,000 | 100% | $20,000 |
| Next $20,000 (i.e. $20,001 to $40,000) | 140% | $28,000 |
| Next $20,000 (i.e. $40,001 to $60,000) | 190% | $38,000 |
| Next $20,000 (i.e. $60,001 to $80,000) | 250% | $50,000 |
| Above $80,000 (i.e. $80,001 and above) | 320% | $278,400 |
| Total ARF Payable | $414,400 | |
We’ll spare you the maths, but this is how a $150,000 as-landed electric saloon ends up costing just south of $600,000. This is after factoring in the rest of the rebates, surcharges and other MISC taxes.
With land scarcity, the overall vehicle population has to be strictly controlled to ensure the road networks are not overloaded. So it is unlikely that car prices in Singapore would ever be sensible.
But with COE prices continuing to rise, and with chatter that private car owners aren’t the ones driving the cost up, shouldn’t it be time we had a serious conversation about overhauling our taxation structure?
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