When you are younger, you imagine the best car you want to drive, so when you get your first regular job, you go shopping for your dream car, thinking that you only have to pay its selling price. To save you from shock, we will reveal more costs in a car than what meets the eye, and the dealers won’t tell you these until you have been completely swoon by an expensive ride.
Certificate of Entitlement (COE)
COE is a must for every vehicle as it represents and proves your right to own your car and the limited road space for 5 to 10 years. There is no other way around it, despite the cost. If you wish to have a car, register it in the appropriate vehicle category.
As the initial 10-year COE expires the vehicle owners have the options to renew the COE for another 5 to 10 years paying the Prevailing Quota Premium or deregister instead. COEs are released through a three-day competitive bidding held twice every month which can be monitored online through Open Bidding System.
The Land Transport Authority (LTA) will issue a press release before the bidding exercises. You can check the available quota, as well as the time and dates they will be held. Submit your bidding through ONE.MONITORING by keying in your reserve price. How does the bidding works? The COE Open Bid System rises until the number of successful bidders equaled the number of available COEs. The Current COE Price (CCP) will then depend on the highest unsuccessful bid plus $1. All successful bidders will pay the same CCP. For cars up to 1,600cc and producing 130bhp of power or less, the COE was at $53,000 as of July 2016.
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You can choose between a basic car insurance, which many thinks can be cheaper, or a comprehensive car insurance which covers death or injury to other parties, fire, damage to other party’s car, theft and medical costs due to an accident.
Aside from your financial security if accidents or other unforeseen events occurred, many moneylenders prefer giving car loans to those with insurance. If you think this is too expensive, you can gain 10% to 50% discounts if you accumulated a period of time without claiming your car insurance. This is called No-Claim Discount.
If you avail a comprehensive car insurance, you might have to pay $250 a month:
$250 x 120 = $30,000
Total Car Loan Value
There are certain factors you have to consider when getting a car loan to buy a vehicle. Banks may be your obvious first choice, yet consider other options such as the licensed money lenders who offer more flexible terms with lower interest rates and less paperwork. Take time to shop around and find the one which fits your needs and wants. There are loans which cover road tax and documentations fees. Some money lenders even approve loans to those with bad credit scores. If you are denied by banks due to low credit rating, you can have a better luck with licensed moneylenders such as Cash Mart.
We will use Toyota Corolla Altis price as our base data since it is the most popular for Singaporeans based on Annual Vehicle Statistics 2015. The current price for Corolla Altis is $116,888. Given that the down payment is 50% and you are able to obtain a five-year car loan at 3% interest, then your monthly loan repayment if $1,120.18. At the end of five years, you should have paid $125,655. Diligently paying your loans can increase your credit score.
You can calculate your Road Tax in One.Motoring through either Vehicle Registration Number or Engine Capacity and Vehicle’s Age. For the Toyota Corolla Altis, the Road tax of over 10-year period is $7420.
Road Tax depends of the engine capacity if the vehicle and whether it uses diesel, petrol or electricity to run.
COE is pricey and many motorists have been waiting for its price to go down, on the other hand if you choose to sell your car before it reaches 10 years under your ownership, then you can get rebates depending on the years you have used it. Since we are calculating the cost of the car for 10 years, presuming that you will scrap your car after 10 years, then the COE has already expired and you will not get any rebate.
Preferential Additional Registration Fee (PARF) Rebate
Additional Registration Fee (ARF) is the tax you pay for a car based on its Open Market Value (OMV) as assessed by the Singapore Customs. OMV includes the freight costs, insurance, and other charges involved during the car’s delivery to Singapore. PARF
PARF will be based on the de-registration of COE and the age of the car computed by the date of its registration either in its country of origin or in Singapore, whichever is earlier. Imported cars registered before September 1, 2007 will not be eligible for the PARF rebate.
If you choose to scrap your car before it hits 10 years, you get back half of your ARF.
- ARF for Toyota Corolla Altis =$17,400
- PARF Rebate at end of 10 years = $8,700
Breakdown of Car Cost
- Certificate of Entitlement (COE) = $53,000
- Auto Insurance = $30,000
- Total Car Loan Value = $125,655
- Road Tax = $7,420
- COE Rebate = $0
- Preferential Additional Registration Fee (PARF) = $8,700
Expect to spend $207,375 in ten years for owning a car.
The total excludes the petrol cost, parking fees, carwash, and regular maintenance. You might also get traffic violation tickets if you are not careful.
The key to get a car without too much pain in your pockets is to get the best car loan in Singapore. Drop by Cash Mart and the staff are willing to show you how their car loan can give you the best benefits with its flexible terms at its lowest sensible interest rates. Want some add-ons for your car insurance and other related fees? Have a chat with Cash Mart’s Loan Executive today.
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