Little Known Factors In Expensive Car Ownership
Singapore is a very small country with limited land. In order to own a car in Singapore, you need to bid for the COE also known as Certificate Of Entitlement before you can drive the car on the road of Singapore. Have you ever wondered is it the COE causing the high car prices in Singapore or are there any other factors that contribute to it. Learn this little known factors in expensive car ownership here.
In Singapore, there is no such thing as getting a good car deal that makes financial sense. A car, even a “cheap” one, is a luxury that the average Singaporeans (despite our high spending power) will struggle to afford. Even among the upper middle class in Singapore, a car isn’t cheap to own.
There are 5 main factors that would determine the price of a brand new car in Singapore. They are the Open Market Value (OMV), the Additional Registration Fee (ARF), Excise Duty & GST, Certificate of Entitlement (COE), and local dealers’ margin.
Think of a car’s OMV as a baseline guide to the original price of the car. If not for taxes, COE, ARF or other form of taxes, we could have bought the car at the OMV price. The OMV prices we see are what some people in other countries are paying for the exact same car.
For example, a brand new Audi A4 has an OMV of about $32,000. In some European countries such as Germany, you would be able to get the car at about that price.
Excise Duty is a form of tax imposed on specific goods within a country. For example, in Singapore, we have additional taxes on goods such as alcohol, cigarettes and petrol. Via dollarsandsense.sg