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Unclear about how cars are priced in Singapore? Let's look at some of the factors that contribute to the purchase of a car.

12 Mar 2013 | Category: Car Buying Advice

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With the new restrictions from the Monetary Authority of Singapore (MAS) on motor vehicle loans as well as the new tiered ARF structure, many people who intend to buy or who owned vehicles do not understand how cars are priced in Singapore and the factors contributing to the sky-high price paid for a set of wheels in Singapore.

The following article aims to help car buyers understand what they are actually paying for.

Factors contributing to car prices in Singapore:

1) Registration Fees - Basic administrative fees of $220.

2) Goods & Services Tax (7% GST on Excise Duty + OMV) - A form of consumption tax that is imposed based on the value of goods.

3) Excise Duty (20% of OMV) - Additional form of tax imposed. Like the ARF, the Excise Duty is also calculated based on a percentage of the OMV of the vehicle.

4) Open Market Value (OMV) - Assessed by the Singapore Customs, OMV takes into account the purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car from the country of manufacture to Singapore. The OMV is not the selling price from the manufacturer to local authorised dealers.

5) Certificate of Entitlement (COE) - Consists of five categories: Cat A (Cars 1600CC below & Taxi), B (Cars above 1600CC), C (Goods Vehicle & Bus), D (Motorcycles), and E (Open).

6) Additional Registration Fee (ARF) - 100% of the OMV based on the previous ruling. As of the next COE bidding in March 2013, a new tiered ARF structure will apply. Cars with OMV of up to $20,000 will not be affected but the next $30,000 ($20,001 - $50,000) will be taxed 140% of incremental OMV while cars with an OMV above $50,000 will be taxed 180% of incremental OMV.
Seven main factors add up to the cost of a car in Singapore, with the exception of CEVS which can be a rebate or surcharge

7) Carbon Emissions-Based Vehicle Scheme (CEVS) - Vehicles with low carbon emissions of less than or equal to 160g/km are entitled to a rebate of $5,000 to $20,000. On the other hand, car owners will be penalised with a surcharge of $5,000 to $20,000 if their vehicle emits carbon more than or equal to 211g/km.

Any additional amount paid on top of the points above - Overheads, road tax, In-Vehicle Unit fee (IU), vehicle number plate fee, sales commision, profits for dealer etc.

To have a better look at the picture, two examples of a cost breakdown of the factors listed above will be shown on the next page.

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