Whether you are looking to upgrade to a new car, browsing second-hand options, or just got your driver’s license (congratulations!), we prepared this list of important things to consider before buying a car so you can have a smoother purchasing experience.
1. What is your budget, really?
Buying a car in Singapore has its own financial implication. Here are the reasons why cars have much more expensive price tags here compared to other countries.
| Charges | What is it? | Cost |
| Registration Fee | Collected by the Land Transport Authority (LTA) upon registration of the car | S$220 |
| Open Market Value (OMV) | Original price of the car and its cost of delivery to Singapore | Depends on the car |
| Excise Duty | Collected by Singapore customs | 20% of OMV |
| Additional Registration Fee (ARF) | Tax based on the car’s OMV | 100% – 180% of OMV |
| Goods and Services Tax (GST) | Consumption tax levied on the import of goods, supplies and services | 7% of Excise Duty and OMV |
| Vehicular Emissions Scheme (VES) | Implemented to encourage the use of environmentally friendly car | Up to S$30,000 rebate (-) For environmentally-friendly cars
Up to $30,000 surcharge (+) for non-environmentally-friendly cars |
| Dealers’ Margin | The dealers’ slice of the pie | 15% – 50% of all the fees above |
To put things into perspective, a Volkswagen Polo costs around S$25,500 in Malaysia, but a whopping $105,400 in Singapore with COE.
Oh yeah, you need a Certificate of Entitlement (COE) in order to drive a car for up to 10 years on Singapore road. The price of COE is market-driven (pun intended) and can change over time. As of December 2019, the price of COE is up to S$37,900. There are also ongoing fees such as road tax, maintenance, parking and petrol consumption.
#TiqOurWord: As a rule of thumb, you should not be spending more than 35% of your income to pay for your monthly car expenditure. So, get calculative!
2. Car functions and features
Consider where you are in life in terms of finance, family and career. Ask yourself…
Which type of car will be useful for me now?
What brand of car can I afford in the long run?
How about petrol consumption?
A two-door convertible is a dream come true. But do you plan on expanding your family, or driving your parents to their weekly health check? Are you always running errands or grocery shopping? Perhaps a 5- to 7-seater car would be a better option.
Make a list of the car specs that you need and match it with the cars that are suitable with your budget. Things to consider include number of seats, trunk space, a 2- or 4-wheel drive, horsepower, and petrol tank capacity.
3. New car vs used car? Authorised dealers vs parallel importers?
Everyone likes the idea of a shiny new car. But a used car can work just as well depending on your needs. Check out the comparison table below.
| New car | Used car |
| More expensive down payment | Cheaper down payment |
| No defect | Defects over time from wear and tear |
| May take weeks or months to arrive | Readily available |
| For long-term use | Used car is good for 2-5 years use |
In Singapore, you can purchase your new car from authorised dealers or parallel importers. Authorised dealers are distributors that get exclusive rights to sell certain brands, whereas parallel importers are smaller businesses that import cars right from the factories. What are the pros and cons?
| Authorised dealers | Parallel importers |
| Can be expensive | Cheaper price tags |
| Servicing is standardised | Service may not be up to standard |
| Warranty is available | Warranty may not be included |
| Original replacement parts provided | Difficult to get original replacement parts |
| Cars are readily available | Cars may not be available (need to order lah!) |
| Only one brand | More than one brand; including exotic cars |
No matter what options the sellers offer, be sure to get your car insured in case the unthinkable happens. At Tiq by Etiqa, a Private Car Insurance offers you a 9-month car repair warranty and On-the-Go windscreen servicing.
4. Inspect the car
Before you sign the new car ownership in your name, be sure to take it out for a test drive. Pay close attention to how the car performs. Does the engine produce a smooth sound? How does the steering feel? Do the brakes work flawlessly? Are the windscreen wipers functioning? Are airbags available? Horn? Blinkers? Speakers? Air-conditioners? Headlights?
The importance of a test drive cannot be overstated. Not only is it for your own comfort, but also for your safety and the safety of your passengers. If you don’t feel comfortable during the test drive, the car may not be for you.
5. Loan amount and payment terms
As Singaporeans, we always want the best of everything. So enquire with different banks to see the deals they offer with their loans. Some banks offer low interest rates, while others have more flexible terms and conditions. A smaller installment entails a longer loan term. This means that you will be paying large amount of interest over time. Therefore, please consider other aspects of your life such as career progression, salary increment and your family needs.
For all your needs… down the road
Buying a car can be a huge financial and time investment. It’s in your best interest to get it protected. Private Car Insurance at Tiq by Etiqa not only protects the car but also the driver in the event of accident, loss, damage, injury or theft. Other than fast claim approval (ahem – less than an hour), you get an On-the-Go windscreen servicing benefits anytime, anywhere. For more information about our Private Car Insurance, buckle up and click here. Terms apply.
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Information is accurate as at 26 December 2019. This policy is underwritten by Etiqa Insurance Pte. Ltd. (Company Reg. No. 201331905K). Protected up to specified limits by SDIC.
Tiq by Etiqa Insurance Pte. Ltd.
A digital insurance channel that embraces changes to provide simple and convenient protection, Tiq’s mission is to make insurance transparent and accessible, inspiring you today to be prepared for life’s surprises and inevitabilities, while empowering you to “Live Unlimited” and take control of your tomorrow.
With a shared vision to change the paradigm of insurance and reshape customer experience, Etiqa created the strong foundation for Tiq. Because life never stops changing, Etiqa never stops progressing. A licensed life and general insurance company registered in the Republic of Singapore and regulated by the Monetary Authority of Singapore, Etiqa is governed by the Insurance Act and has been providing insurance solutions since 1961. It is 69% owned by Maybank, Southeast Asia’s fourth largest banking group, with more than 22 million customers in 20 countries; and 31% owned by Ageas, an international insurance group with 33 million customers across 16 countries.
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