How to buy a car in Singapore

Buying a car is not as simple as purchasing any other products in our daily lives. It involves a lot of research, planning, consideration and deliberation before an informed decision can be made with certainty and confidence.

Buying a car is a high involvement purchase - we do not want to end up spending a huge amount and regret for the years to come. (Check out this post on the cost of owning a car in Singapore) There are many factors and considerations that come into play, especially in Singapore, due to its limited space and the resulting Certificate of Entitlement (COE) system. With so many factors to consider and decide on, buying a car can be intimidating for many first-time buyers so I hope that this post will ease some of the barriers faced when purchasing a car and you guys will have a better idea of how to buy a car in Singapore.

Before I start, I would assume you already have a driving license, if you don't, check out this post on how to get a driving license in Singapore.

Fees associated with buying a car

The following is a general overview of the costs associated with buying a new car:

1. Registration fees 
• Basic administrative fee and processing fee
2. COE
3. GST
• 7% GST on the Open Market Value (OMV) of the car and excise duty imposed on the car 
4. Additional Registration Fee (ARF)
• Taxed at a certain percentage of incremental OMV depending on the OMV value
5. Road Tax
6. Carbon Emissions-Based Vehicle Scheme (CEVS)
7. Special Tax
• If car runs on diesel 
8. Car Insurance

As for a used car:

Besides the transfer fee, car insurance and outstanding loan attached to the car, it would depend on whether you are getting a PARF(Preferential Additional Registration Fee) car or a COE car. A PARF car is a car that is less than 10 years old - when it nears 10 years, you can recover the COE and PARF rebate. A COE car is at least 10 years old and had its previous owner renew the COE for either 5 or 10 additional years. Upon deregistering before the COE expires, you will only be able to recover the COE rebate.

COE cars are generally cheaper as its OMV would have depreciated significantly from when it was brand new. However, one point to note is that as the COE continues to age past 10 years old, you will need to pay a progressively increasing amount of road tax. In addition, you may also end up spending more on the repair and maintenance of the car due to its age. 

After taking into account the various financial costs involved in buying a car, you should start looking for financing unless you are able to make full payment upon purchase of the car. You can either go for the car dealer's financing package, seek a bank loan through the car dealer or directly go to a bank.

Some popular car loan providers:

• OCBC
• POSB/DBS
• Standard Chartered

Where to buy?

There are 2 main sources to buy a car from - dealers and private sellers. 

Licensed dealers are legally required to be honest with any issues with the car, and are required to address them before selling it. If you are looking elsewhere, you would have to be sure to check the car thoroughly and ensure there are no problems with it. 

Below are some options as to where you can buy a car:

• Authorized distributors
• Used car dealers
• Private sellers
• Parallel importers
• Car auctions

Ask yourself what type of car do you want or most importantly, need. You can refer to my post on the different types of cars to find out more. Different types of cars have different features and it is important to know which suits you best. Know what you want and do thorough research before visiting any showrooms so that you know your stuff and will not be easily swayed by what the salesperson tells you which is often what is not best for you but best for the salesperson himself!

I hope you now have a better idea on how to buy a car in Singapore, if you have any additional points to add, feel free to comment!