Getting a car for your family: know more about COE prices in Singapore, road tax and motor insurance before buying
Once you have a family, you will realise that owning a car is a necessity in Singapore. It can help to save time when travelling and at the same time, boost productivity because you are more in control than if you were to travel by public transport. While all these make the idea of owning a car look really attractive, there are some important things that you need to know before buying your first car in Singapore. Things that you probably had no clue about, such as COE prices, road tax fee and the right insurance premium for the vehicle.
Important decisions to make before buying a car
Types of cars
Deciding between a brand new car and a second-hand car is not that hard since all you have to do is go by your budget. Though a second-hand car might be cheaper, it comes with higher maintenance costs. A way to save on Additional Registration Fees (ARF), COE, road tax and other charges is to purchase off-peak cars. ARF is the imposed tax on a vehicle when it has been registered. The tax imposed is based on a slight percentage of the Open Market Value (OMV) of the vehicle. Before making a decision, look around to find the best price variations that you can get and then, make your choice.
If you can’t afford to pay for the car, you can always take a loan. A loan might last for ten years with a particular sum being paid out on a monthly instalment basis. It is always better to take up a loan only if you have enough savings. This is to prepare you in case your source of income has been abruptly stopped, due to unforeseen circumstances. It is obvious that you still need to pay the bank’s installments every month even if you are not making any money or not working.
You need money to buy a car and then, you need to maintain the car after buying it. A car needs to be checked and serviced every year. The more you use it, the more it is likely to need servicing. In addition, as the car becomes older, some of its parts will have to be replaced. All in all, you will need to keep a budget aside to send the car for servicing every year.
Before hitting the roads in Singapore
Certificate of entitlement (COE)
COE is an important component that you need to be informed of before purchasing a car. It is a certificate that allows vehicles to be driven on the roads in Singapore for 10 years. The rates of COE are not stable and tend to increase during the period of high car demand.
In July 2018, COE prices hit the lowest levels since March 2010. COE premiums fell to 26.7% ($25,000) for cars up to 1,600cc and 130bhp. For cars above 1,600cc or 130bhp, COE prices dropped by 8.6% ($31,000). If you are prudent in your spending, it is best to wait for the low COE prices to buy a car. When COE prices go up, the prices of cars also increase.
Before you can use your car on the roads in Singapore, you need to have your road tax ready. A road tax in Singapore is priced around $500 and is paid on a yearly basis. If you are buying a car that is more than 10 years old, you need to pay up to 50% more for the road tax.
Getting car insurance will help you feel safe and protected on the road. In Singapore, owning a car and insurance coverage go hand in hand. Motor insurance is mandatory for every vehicle owner in Singapore. Since there are a lot of insurance companies available, InsureDIY has made it easy for car owners to just select the insurance plans that closely match what they are looking for.
On the platform, you can easily go through the motor insurance rates of the insurance companies featured and decide which plan you feel safest with. You can browse through what the cheapest and the most expensive insurance plans in Singapore offer. You don’t have to worry about the legitimacy of these insurers as InsureDIY only features insurance plans from companies that benefit car owners. On the online platform, you will find AXA, Sompo, Hong Leong Assurance, MSIG, Liberty and NTUC Income, which are some of Singapore’s most popular insurance companies.
InsureDIY has financial advisers that can help you make the right choice and answer any of your questions. Simply email us at [email protected] anytime!