New vs Used car in Singapore
Unlike in most countries, getting used car in Singapore may not necessarily be the most economical decision!
Our family was comtemplating getting a used car in Singapore assuming that it would be the cheaper decision. After visiting many used car dealers as well as new car dealers in Singapore, we were surprised that it cost a lot more to get an old car in Singapore.
You see, Singapore has a COE (Certificate of Entitlement) system plus a hefty import tax on new cars that inflates the cost of car ownership. COE system was introduced in the 1990s to restrict the number of cars allowed on the road. It has the intention on controlling the growth of vehicle population so that there will be less traffic congestion.
Potential car owners will participate through an open bid system on their own or through their car dealers to bid for the COE. Once they secure it, they will then proceed with the purchase of a car.
During the years when the COE were high, it can cost the car owner as much as $20,000 to $30,000 or more for a 1.6cc Japanese Sedan. It is not uncommon to be paying around $70,000 to $80,000 to drive away a Toyota Corolla.
COE is like a 10 years license to own a car in Singapore. It is tied to the car you buy. Once you decide to sell the car after some year, the pro-rated COE will be transferred to the next car owner.
When we were looking around for a used car (a time when the COE was low around th $11,000 range), a 3 year old car had a price tag of $46,000 (a large part of it due to it's higher COE when the owner first purchased it) vs a brand new car of $56,000. The choice became obvious after we compared a few more brands of car and bought our new Japanese sedan in the low $40,000 which was really a blessing.
Next time before you buy a used car in Singapore, remember to do your homework. It may well worth waiting for a good time (when COE is low) to get the best deal.
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