Singapore is a small country with limited space. In order to prevent huge traffic jams, the Singapore government implemented the Vehicle Quota System (VQS), a system which allows the government to control the amount of cars on the road. The quota is reviewed on a regular basis and is set per month, based on the road conditions and amount of cars permanently taken off the road in that month (by scrapping, exporting or otherwise)
The VQS is controlled by the Certificate of Entitlement, or COE. Here's how it works:
Each month, the Land Transport Authority will determine how many of each catagory of vehicles are allowed on the road according to the VQS. Subtracting from that amount the amount of vehicles of that catagory which are already on the road leaves an amount of 'open places' in that catagory. The LTA will then issue that amount of Certificates of Entitlement (COE). Every vehicle owner must have a COE. This means that there is a chance that the amount of people who want to buy a new vehicle is higher than the amount of COEs available in that month. This is why the COEs are sold through an open bidding system and means that prices of the COE may soar if demand is high. While the price fluctuates tremendously, the average price of a 10-year COE is around $35.000 for a car of less then 1600 cc engine capacity!
First-time COEs are purchased for a 10-year period, after which you may decide to bid for a new COE to keep your vehicle on the road. The renewal can be either 10 years, or 5 years. The difference between the two (apart from the obvious validity time) is that a 10-year COE may be renewed at the end of that term, whereas a 5-year COE may not be renewed. In other words, once you buy a 5-year COE, your vehicle MUST be permanently taken off the road at the end of that 5 years.
Every car in Singapore is taxed by an import (Customs) duty, registration fee, an additional registration fee, and road tax. The import duty is 31% of the import value of the car, on top of that, a $1000 Registration Fee is charged for private cars ($5000 for company cars) and on top of that, an Additional Registration Fee (ARF) is charged. The (ARF) is 140% of the Open Market Value (OMV) of the vehicle.
To then get the car on the road, you have to successfully bid for a COE and pay road tax. Road tax brackets are based on the type and weight of the vehicle. After the 10th year, the road tax will rise with an additional 10% per year, up to a maximum of 150% at the 15th year.
Cost price + Import duty + Registration Fee + Additional Registration Fee + COE + Road Tax
And then, of course, we haven't even counted in the compulsory Vehicle Insurance, ERP, petrol and maintenance costs.
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