The city-country of Singapore offers a unique experience and living condition to its citizens and partially all of those are due to a key feature of its transportation policy aimed at reducing road congestion. To own a car in Singapore, like most countries, you must obtain a registration, known as a Certificate of Entitlement (COE).
However, unlike most countries, the government restricts the number of COEs available to curb the growth of the number of cars and hence to reduce traffic. To distribute the limited number of COEs, the government allocates the registrations through a competitive online bidding process.
Therefore, the price of a COE, which is a significant portion of the price of acquiring a car in Singapore, varies over time based on the number of registrations available each auction. The high cost of obtaining a COE is one of the primary reasons that car ownership rates are so low in the country and why there are a great number of recommended car dealers in Singapore.
According to the Economist Intelligence Unit (EIU)’s report in 2016, Singapore retained the title of the most expensive city in the world for the third consecutive year, and the price of owning a car is one of the factors that make the city-country so expensive. The Singaporean government has implemented several policies to reduce traffic and congestion, specifically congestion pricing and vehicle ownership restraint. As a result of these policies, the costs of owning a vehicle in Singapore are extremely high and subsequently, the car ownership rate is low.
To curb the growth of the vehicular population, a vehicle quota system was introduced by the Singaporean government in May 1990 via the Certificate of Entitlement (COE) scheme. Vehicle owners must obtain a COE to purchase a car, but there are a limited number of these registrations available. Therefore, obtaining a COE is conditional on making a successful bid when buying a car.
A COE is valid for ten years and individuals have the option to renew at the end of the term or just find used car dealers in Singapore, those who opt for the prior will have to pay a significantly higher road tax premium and obtain a new COE at the current market price.
COEs are distributed via five categories of vehicles, and households primarily obtain COEs for their personal cars from categories A and B, but sometimes through category E as this is an open category.
The number of COEs available, known as the COE quota, is determined by the Singaporean government based on three components: the number of vehicles de-registered, the allowable growth rate as determined by the government, and adjustments to account for changes in the vehicle population. The auction for a COE is held through an online, open-bid process and has been conducted over a three day period, twice a month since April 2002. The number of successful bidders is limited by the number of COEs available in each category in that auction. The price of the COE is increased over the bidding period until the number of bids is less than or equal to the quota for that auction. All successful bidders
in the vehicle, category pay the same premium, the minimum amount needed to have a successful bid in that auction, regardless of the bid made.
Estimate that the total cost, net of the resale value, of a new mid-range car over a seven-year operation period in Singapore is 150,001 Singapore Dollars (SGD) with an acquisition cost of 122,144 SGD, and operating costs of 61,530 SGD, and resale value of 33,673 SGD.12 The COE premium
was 63,630 SGD, which was the average 2012 COE bidding results, and accounted for 52.1% of the acquisition cost and 34.6% of the combined acquisition and operating costs. Note that the total operating costs over a seven-year period for a mid-range car is estimated to be less than the price of a COE. This further highlights the importance of considering the impact of the acquisition costs of a personal vehicle in jurisdictions where the government institutes traffic control policies.
Second-hand cars are advertised in various newspapers, motoring magazines and websites. Many of the country's large dealerships promote used cars for sale in Singapore. Notice boards at supermarkets occasionally advertise used cars for sale.
It is often advantageous to buy a car of about one to three years old, as depreciation is greater in the first three years. Car prices can, however, vary according to the prevailing COE price.
However, if a seller has a bank loan attached to the car, it is common to sell the car on with the loan outstanding. The loan is transferred to the buyer, who pays the balance of the loan out of the sale price and then passes the remainder to the seller.
The buyer pays for the used car prior to their name being transferred onto the car registration documents, and cannot register the car in their name until the loan has either
been transferred or paid off. It takes up to two working days for the bank charges on the car to be removed. In some cases, the buyer can go with the seller to make a direct payment to the loan company and pay the balance of the sale price once the loan is discharged.
If you are looking for used cars for sale, visit our website and let our recommended dealers help you with what you need.
