Be warned: it is very expensive to own and drive a car in Singapore. Wary of the fact that uncontrolled growth in the number of vehicles will result in traffic jams in land and road scarce Singapore, the government has implemented a range of measures to manage car ownership and usage. These include the Certificate of Entitlement (COE), Vehicle Quota System (VQS), road taxes and Electronic Road Pricing (ERP). All motor vehicles must be registered with the Land Transport Authority (LTA).

Vehicle Quota Scheme (VQS) and Certificate of Entitlement (COE)

The COE scheme has been one of the most controversial and hotly debated public policies ever implemented. In short, anyone wishing to buy a car or motorcycle has to bid for a Certificate of Entitlement (COE). Each month, a certain number of COE's are released for bidding and if successful, the vehicle entitlement is valid for 10 years from the date of registration of the vehicle. The scheme aims to peg long-term vehicle population growth at 3 per cent a year. Certain classes of vehicles like public buses, school buses and emergency vehicles are exempted from the scheme. The catch? COE's have become so expensive that it is cost prohibitive to own a car. The government wants the people to take public transport.

• To register a new vehicle, bid for a COE under the appropriate category (there are 7 in all, but the ones that will probably apply to you are the small, medium and luxury categories for cars and for motorcycles)
• COE tender exercises are on from the 1^st to the 7^th of each month.
• Bidding for COEs can be done electronically or through the car agent. You can submit your bid through most ATM's
• Fifty per cent of the bid amount will be deducted from your bank account as a tender deposit.
• Except for companies and organisations, each applicant is allowed only one bid in each tender exercise. Anyone found making more than one application will have all applications rejected. COEs for most categories are non-transferable.
• A successful bidder will need to pay the lowest successful bid price, also know as the quota premium (QP). Company cars pay double the quota premium. The vehicle must be registered within 6 months for non-transferable categories and within 3 months for transferable categories.
• Current COE rates are available here.

Vehicle taxes and registration fees

All motor vehicles imported into Singapore are slapped with a customs duty of 41 per cent ad valorem. There is also a Registration Fee to be paid. The fee is $1,000 for private vehicles and $5,000 for company vehicles. In addition, when a car is first registered (whether new or used), an Additional Registration Fee (ARF) of 150 per cent of the car's Open Market Value is payable. All these make the price of cars here artificially inflated compared to those in the States or Europe.

Electronic Road Pricing (ERP)

Electronic Road Pricing is Singapore's latest attempt at tackling traffic jams during peak hours. ERP is based on a pay-per-use principle that is intended to reflect the true cost of driving. ERP has been extended to choke-points on other expressways and major roads in order to alleviate congestion, especially at the dreaded 8.30am-9.00am timeslot where charges and traffic alike are at their highest.  8.25am sees a free for all before the ERP gantry as drivers try and 'beat the increase' while 8.59am sees traffic slow to a snail's pace for the same reason!

All in-vehicle units have now been installed in vehicles and every new car purchased in Singapore must have one.

Road taxes

Road taxes are renewable on a six-monthly or yearly basis. You may only renew your road tax if your vehicle has a valid inspection certificate. Cars between 3 to 10 years old must be inspected once in 2 years; cars older than 10 years must be inspected every year. Motorcycles and scooters must be inspected once a year only if they are older than 3 years. Inspection notices are sent to vehicle owners three months before the road tax expires.

So what does all this mean for your dream car? Some estimates (including annual registration fee, import duty, road tax, registration fee and number plates) are: Audi A41.8 (A) $182,000 (including COE), BMW 328 (A) (2.8cc) $238,000 (including COE); Mercedes 200E $201,902; Volvo 940 Turbo Estate 2.0 (A) $160,753. Either start saving up or make sure your company gets you a car. If not, we're sure you won't find the public transport system here wanting!

Buying used cars here

In Singapore, buying any kind of car is a major undertaking due to the great expense compared with other countries, especially the UK and USA. An ‘old’ car (which in local terms equates to ‘more than ten years’) is therefore in the same category. True, there is considerable depreciation in the actual value of the car but there are also the pitfalls of potential "wrecks" and write-offs being sold off as supposedly solid pieces of kit. However, just to confirm one point, yes, you can buy a car that is more than ten years old – though finding one with a warranty is difficult. This is because anyone buying a car in Singapore has to pay for a 10 year Certificate of Entitlement (COE – to add to the many Singapore acronyms) to obtain the car in the first place and then pay the same huge sum (almost always tens of thousands and now hovering around S$30-S$40K) once ten years is up. There is a limited quota of COEs allocated each month by the Singapore Land Transport Authority (LTA) and demand almost always outstrips supply, pushing the price up. It can also be a relatively ‘hit and miss’ affair, with economic changes affecting the price by tens of thousands per month – rather like stocks and shares. You can find a more detailed explanation of the COE as well as a current guide to COE prices here. For cars which are older than 10 years, you are advised to make sure the car has a 10 year COE because a car with a 5 year COE which has expired cannot be renewed.

Why is it difficult to find a car over 10 years old with a warranty?

After ten years of driving their initially new car, many people just opt to buy another car by trading in the old model rather than trying to get another ten year’s useful life out of it, as may well be the case elsewhere. Old cars are often sold off to other countries for parts for this reason and people have suggested that the inner parts are built with a 10 rather than 20 year life in mind, seeing as the owner is likely to get rid of the car in that time.

Road tax

Road tax is another consideration. Although smaller, the sum will also always be in the thousands, and once again folks, once your car reaches the magic age of 10, it becomes more expensive. Tax increases exponentially from the 10^th year onwards, 110% in the 11^th year, 120% in the 12^th and so on to a maximum of 150% from the 15^th year onwards. The LTA provide the facts and figures for you to work the cost out for private vehicles (based on engine capacity) here: http://www.gov.sg/lta/3_Vehicles/8_1_Private.htm

Making sure used doesn't mean AB - used

To make sure you are not buying a ‘dud’ car that has been abused, in an accident, or facing any other mishap, it is best to get any potential used vehicle you wish to purchase checked out by the experts – of which the Automobile Association of Singapore (AAS) would seem to be the best option. Their homepage is here: http://www.aas.com.sg and click here for details of the vehicle evaluation: http://www.aas.com.sg/benefits/evalue.htm.

Car insurance

As for car insurance, again, the AA(S) would seem to be a reliable option. Details of the two insurance plans they offer can be found here: http://www.aas.com.sg/benefits/evalue.htm. Otherwise one suggestion would be to ask a few car-owning friends or colleagues which insurer they use and get an idea of preference through word of mouth.

Overall cost of the car

Registration fee + Cost Price + Road Tax + COE + additional registration fee (140% of OMV) and customs duty (31% of OMV).

Useful Links

http://www.lta.gov.sg/Menu_UsefulLinks.htm - LTA links

http://www.aas.com.sg/links/sglinks.htm - AA(S) links

http://jsaic.krdl.org.sg/tralvex/pub/cars/ - Comprehensive links page

http://www.automedia.com.sg - buying/selling a car

All of the above should hopefully provide some helpful pointers to those thinking of purchasing a used car in Singapore. Word of mouth is another powerful ally you should explore.

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