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FEATURE BUYING A CAR If you’re in the market for a car there are some things you need to know in order to make an educated decision. Here’s a primer on the process that could make your road to new wheels smoother. WORDS DAYRL LEE f there’s one thing that expensive in the world. numbers would result in makes buying – and for grabs the attention of There are obvious traffic chaos. And we all the most part, selling Singaporeans other reasons for this. The size know that we won’t get – a car a somewhat I than property prices, of our country places a anywhere fast by driving challenging exercise. it’s the price of cars. No restriction on the number if we are constantly stuck Of course, we can country in the world of roads, and in turn, the in jams. What would that always walk into a car prizes their automobiles number of vehicles on do for national efficiency showroom, pick out the the way we do. But is that them. If there weren’t any and productivity? one we like (and can surprising? Cars here controls on the prices The high cost of afford), and sign on the are arguably the most of cars, the increased automobile ownership dotted line. But when 22 HIGHWAY THE SIZE OF OUR you consider that the What’s more, the loan decision early can save COUNTRY PLACES numbers after the dollar tenure cannot exceed you a lot of time, not to A RESTRICTION sign can often go beyond five years for both old mention heartache. a hundred thousand, and used cars. This boils ON THE NUMBER NEW OR USED? OF ROADS, AND you’d be well advised to down to buyers needing make your choice wisely. to not only fork out more 3 For those who don’t IN TURN, THE Here are several key cash as down payment, necessarily need a brand- NUMBER OF issues to consider. but also make higher new car, this may be one VEHICLES ON monthly instalments. of the most important THEM. IF THERE WHAT CAN YOU decisions to make. There WEREN’T ANY 1 AFFORD TO PAY? WHAT TYPE OF CAR? are obviously pros and CONTROLS ON THE Naturally, the most 2 After you’ve cons for either choice. PRICES OF CARS, important aspect is the determined your budget, Used cars are obviously THE INCREASED cost. Unless you’re flush it’s time to go shopping. cheaper, but they come NUMBERS WOULD with cash, you’re likely to There are a great variety with more mileage and RESULT IN take a car loan. In 2013, of car types out there and wear. And you never TRAFFIC CHAOS the Monetary Authority the one you decide on really know if they’ve of Singapore (MAS) put should meet your needs. given problems to their in place a restriction Do you need a people previous owners (a used that capped car loans at mover to cart the family car evaluation does help) 50% for cars with Open around? Do you need or have been involved in Market Values (OMV, lots of space to store accidents. But the drastic more on this later) higher bicycles or golf bags? depreciation of the first than $20,000, and 60% Or do you need a flashy couple of years would for cars with OMV not number to satisfy your have been borne, and exceeding $20,000. midlife crisis? Making this depending on how old OMV, ARF, PARF THEOMV – OPEN ABCsARF –OF ADDITIONAL TAXES CEVS – CARBON As Singaporeans, we MARKET VALUE REGISTRATION FEE EMISSIONS-BASED love our acronyms This is the value assessed This is the tax imposed VEHICLE SCHEME – and none more so by the Singapore customs upon registration of a This is a rebate that than in the world of based on the price actually vehicle and is calculated as encourages owners to taxes for cars. But paid or payable for the a percentage of the OMV. shift to low emission what do they stand car when imported here. ARF is 100% of the first vehicles. Cars with low for and what do they It includes purchase price, $20,000; 140% of the next carbon emissions will mean to us as car freight, insurance and all $30,000; and 180% for qualify for rebates, which owners? Here’s an other charges incidental to amounts beyond $50,000. are offset against the car’s explanation. the sale and delivery of the ARF payable (minimum car to Singapore. PARF – ARF of $5,000). Cars with PREFERENTIAL high carbon emissions ADDITIONAL will incur a corresponding REGISTRATION FEE registration surcharge. When a car is deregistered before 10 years of age, ADDITIONAL FEES a Preferential Additional In addition to the COE Registration Fee (PARF) and ARF, car buyers also rebate may be granted if need to pay a registration the car is eligible for PARF fee of $140, and excise benefit. The PARF rebate duty that amounts to 20% is computed based on the of the OMV. age of the car when it is deregistered. HIGHWAY 23 INTRODUCED the car is, there may still IN 1990 BY THE be a few years left in the GOVERNMENT, warranty. [THE Then again, if you must have the latest model CERTIFICATE OF available, there is only ENTITLEMENT] one way to go. New cars IS DESIGNED TO come with multi-year CONTROL THE warranties, and for some, NUMBER OF that new car smell can CARS ON THE be irresistible. ROADS AT ANY ONE TIME BUY OR LEASE? 4 Singapore car ownership is a peculiar servicing taken care of; or 10-year period by issue because of the and there’s no need paying the Prevailing need for a Certificate to worry about road Quota Premium (a rolling of Entitlement (COE) tax and insurance. But average of to own a car (more on monthly payments are COE premiums)”. this later). So in reality, typically higher and COEs are released the 10-year period of leases may not be for through competitive the COE makes car more than a few years. bidding (there are two ownership a ‘lease’ in a This is something to bidding exercises each way. With the increase consider if you only month). You can do it in down payment put in plan to drive here for a yourself, but most of place in 2013, the option short time, or want to the time, the car dealers of actually leasing a car drive a dream car for take care of it for you. from either a dealer or a brief spell. Now, there are a couple a leasing company may of ways they can do this. make sense. There are CERTIFICATE OF Dealers can either offer advantages to leasing 5 ENTITLEMENT (COE) you a guaranteed COE – lower down payment; The question on every price where they absorb prospective car buyer’s the risk of their bids, and lips these days is: will you get your car whatever the price of the COE the result of the bidding go up or down? The exercise, or they can COE is what makes car lower their maximum ownership in Singapore bidding price by offering unique, and so costly. you a corresponding Introduced in 1990 by discount. In the latter the government, it was case, there is a risk that BUY designed to control the you won’t get your car if number of cars on the the bid is unsuccessful. OR roads by limiting the Make sure you know number of COEs at any which price you’re one time. getting. LEASE As stipulated by Something to note the Land Transport is that many cars in Authority (LTA), the Singapore are at the COE “represents a right end of the 10-year COE to vehicle ownership and cycle this year and the use of the limited road next. That means that space for 10 years. At all things considered, the end of the 10-year you can expect more COE period, vehicle COE premiums to be owners may choose to made available in 2016. deregister their vehicle Whether this results in or to revalidate their lower car prices is still COEs for another five- anybody’s guess. 24 HIGHWAY THE SWEET SORROW APPS OFIf you are inPARTING the market for a car, chances are, you will need to get TO HELP rid of your old one. Here are some facts to take note of when you are ready to say goodbye. LET YOUR FINGERS DO THE ‘WALKING’ WITH THESE CAR- BUYING ONLINE PORTALS AND APPS. SGCARMART www.sgcarmart.com This site, and the accompanying app, offers everything you need to know when it comes to looking for a new or used car. They offer more specifications and statistics than you can use, elling a car in were used – and subtract applies if you bought a but we particularly like the Singapore can its minimum PARF value used car. A three-year- information on depreciation be an equally (found in the vehicle’s log old car at $110,000 on used cars that can S mystifying card), then divide it by with a minimum PARF help separate the money process. 10 years. It’s important value of $30,000 pits from the ones with Basically, you can to note that commercial would depreciate at good value. You will have either sell it directly to vehicles and vehicles a rate of $11,429 per to excuse the numerous prospective buyers, or that have had their COEs year ($110,000 minus advertisements – a necessity to a used car dealer.

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