Is It Cheaper to Buy a Car in Singapore or Import It from Abroad?

Buying a car in Singapore is often more expensive than importing one from abroad due to the country's high taxes and fees. Understanding the key factors that influence this decision is crucial for individuals looking to own a vehicle in Singapore.

Taxes and Fees

When purchasing a car in Singapore, you must pay several taxes and fees that can significantly increase the cost of the vehicle.

The Certificate of Entitlement (COE) is a crucial component of car ownership in Singapore. The COE is a permit that allows you to own and drive a car in the city-state. The cost of the COE can be quite substantial, making it one of the primary expenses associated with buying a car in Singapore. Additionally, there are other taxes such as the Additional Registration Fee (ARF) and the Goods and Services Tax (GST) to consider, which can further inflate the overall cost.

Importing Costs

While it might initially appear cheaper to import a car from abroad, the associated costs can be significant. Here are the main factors to consider:

Import Duties: Importing a car from abroad requires paying import duties, which can add a considerable amount to the final price. Compliance with Local Regulations: Adhering to local regulations and obtaining the necessary certifications, such as a COE, can be a complex and costly process. COE Requirement: Even when importing a car, you will still need to acquire a COE, which can be difficult to obtain, especially in a demand-driven market.

These factors often mean that the total cost of importing a car from abroad can be equal to or even exceed the cost of buying a new car locally.

Vehicle Type

The make and model of the car you're considering also play a significant role in the decision. Luxury cars or models not commonly available in Singapore may be cheaper to import. However, for more standard models, the savings might not be substantial.

Long-Term Considerations

Does the choice of buying vs. importing a car impact long-term costs such as maintenance, insurance, and resale value?

Maintenance and Insurance: Local cars in Singapore often have better resale value due to the familiarity of the market and the availability of parts. Therefore, the cost of maintaining and insuring a car might be lower in the long run.

Resale Value: Depending on the demand and familiarity of the car model, the resale value in Singapore might be higher compared to imported models.

Conclusion

While importing a car can be cheaper in some cases, the overall cost including taxes and fees often makes buying a car in Singapore more expensive. It is advisable to conduct a detailed cost comparison based on specific models and circumstances before making a decision.

Being a vehicle expert in Singapore, I can tell you that owning a car here is not financially viable due to the high costs of maintaining ownership. The taxes and fees have been set high as part of the government's scheme to control the car population. If you are planning to buy a new car, let's compare the different costs associated with both options.

Buying a New Car in Singapore

Buying a new car in Singapore involves a considerable amount of additional costs beyond the base price of the vehicle. Here are the key costs involved:

Open Market Value (OMV): This is the value of the car in the open market. Additional Registration Fee (ARF): This is calculated as a percentage of the OMV. Different sections of the OMV have different ARF rates. Excise Duty: This is calculated as 20% of the OMV. Goods and Services Tax (GST): This is levied at 7% of the sum of the OMV and excise duty. Certificate of Entitlement (COE): This is a necessary certification to run a car on Singapore's roads for 10 years. Dealers Margin: This is the percentage margin added by the dealer to the final sales price.

Adding up these costs, including insurance expenses, can make the final price of a car in Singapore seem expensive. On the other hand, importing a car from overseas requires compliance with multiple standards and regulations, including obtaining a cargo clearance permit, and paying customs fees such as GST and excise duty.

Both options involve significant costs, and the optimal choice depends on the specific car you are considering. For a clearer picture, comparing both situations with specific examples of cars will provide you with a better understanding of which choice is more financially optimal for your needs.

In addition, consider purchasing a second-hand car, which can be a more affordable option with modest additional expenses. However, this is only suitable if you are looking for a car as a short-term option.