My current car the last 2 months is the Mercedes Benz E 230 7GTronic. Its a second hand car and I bought it from a reliable dealer for (get this) - US$ 90,000. Cars in Singapore are practically the HIGHEST in the WORLD, testament to the fact that the Certificate of Entitlement, or the piece of paper which entitles the buyer to purchase a new car is hovering around U$ 75,000. So, a simple calculation of say the Toyota Altis (1.6 litre), which is retailing in Japan for U$ 20,000.
- Import Car Price : U$ 20,000
- Additional Registration Fee : 150 % : U$ 30,000
- COE : U$ 60,000 ('small' car COE is about S$ 75,000 or U$ 60,000)
Voila ! you get the sum of U$ 110, 000 or S$ 130, 000 or RM 318,000 ! For a Toyota Altis no less.
For a new Mercedes E 250, you would need to fork out U$ 200, 000, something unthinkable for most Americans but frankly, Singapore has a growing number or elite rich, who park their cash here.
So mathematically, the percentage price of the COE in relation to a small car like the Altis is 105%, see U$ 60,000 compared to the US$ 50, 000. But when you put that against the price of a Lamboghini Gallardo which has a U$ 1.000,000 import price tag, it is 'only' 7.5 % (based on big car COE prices) So anyone with half a brain will be able to assess that the COE supply is 'favouring' the rich, for if you could afford U$ 1 million for a car, whats another US$ 75,000 ?
But for the person who is starting out a family, he or she will feel the pinch, because given that the average earning capacity of the ordinary Singaporean is in the region of about US$ 2, 800. In short, new cars will only be afforded by the rich or the people with rich parents who subsidise the cars for them. Ordinary Singaporeans, and most expatriates will contend with the (much criticised and aging)
MRT, taxis and public buses. Its manageable, but the recent spate of breakdowns by the MRT trains late last year and many times this year have made it a public embarrassment.
Ridiculous isn't it ??
Of course, you will get the banks and dealers offering you, some discount from the interest you paid over the (up to 10) years, and you end up paying an obscene amount of around US$ 105, 000. When you factor in the interest paid for the car when you actually pay (its 1.88% on outstanding balance), if you drive it for the 10 years (most people don't, rather they end up changing cars and 'upgrading' and hence head towards deeper debt), you would end up paying something like US$ 120,000
This is probably 4 -5 TIMES what you would pay for a similar type car in Japan after you add their taxes and insurance.
That is why I opted to buy a second hand car. The COE was based on past 3 years price so it was a more manageable US$ 40,000. Plus I have customers, overseas partners and associates to cater for, so the second hand Merc was my choice, for better or worse.
Its an elitist system we have in Singapore , and for those who desire to own a car, be forwarned, this is an expensive choice.
4 comments:
With the limited roads in Singapore, it's very likely to have traffic jams every day. So authorities there needed to control the car growth by making it more expensive. That second-hand Mercedes can still perform well at a fraction of the cost. Also, the 7GTronic transmission makes that car more fuel-efficient.
@ Junior, you are right. The Singapore government considered the COE as their effective solution to control the growing number of cars in the country. Today, Singapore is one of the fastest growing economies in the world, so the people who live there must also cope with all the adjustments in order to keep up with the country’s development progress. Well, if you’re like other people who consider their cars as one of their needs in life, you just have to understand and accept this quota system that the government is implementing.
That was a good strategy. Buying a secondhand car can really help you save on costs. Like financing, insurance rates will be affected by the age of a car, but in this case, the used vehicle tends to be less expensive.
Kyle Schmidt
It will be best to stick to a scheduled maintenance service to prolong the service life of your vehicle. Do not forget to do the routine oil change, oil filter change, rotation of tires, and other necessary check-ups and maintenance to keep your car from breaking down.
[Clint Moore]
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