This one shared to me by my friend I think this came from Facebook... I am not the author nor my friend is. I am just trying to share this to everyone here
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With the new restrictions from MAS on car loans and also on the New Tier Tax Structure on ARF taxes announced as part of Budget 2013, I thought I will list the following out to help people understand car buying in general in Singapore, as I was very surprised that the few people I spoke to and who owned vehicles did not understand or have any clue on how are cars priced in Singapore and what are the factors contributing to the exorbitant amount of cash we paid for our set of wheels in Singapore.
Car prices in Singapore are priced on the following:
A) OMV (Open Market Value): OMV is assessed by the Singapore Customs, taking into account purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car from country of manufacture to Singapore. This means your beloved set of wheels actually costs lesser from the manufacturer and the OMV is not the selling price from the manufacturer to the local authorized dealer. If you are looking for the OMV of any vehicles, you are welcome to click on the following link:
ONE.MOTORING - Open Market Value
B) COE (Certificate of Entitlement): This is pretty much self-explanatory. Every neighborhood Uncle / Aunties /Ah Gong / Ah Ma knows about the COE. We have Cat A, B, C, D, and E. For the benefit of discussion on private motor vehicles, we really only need to be looking at Cat A: (1600CC and below), Cat B: (Above 1600CC), and Cat E: (Open Cat, where we can use it for vehicles in both Either A or B).
There are a lot of critiques on whether the current COE system actually does what it was intended for, and also with many people crying for a revamp of the system, but I’m sure with the new MAS ruling and New Tier tax structure on the ARF announced just last night, these people probably would have wished that they have shut up instead because they just received 1 mega driver slap in their faces from our ruling party despite predictions that COE prices will come down with the new MAS Ruling working hand in hand with the New Tax Rate Structure on ARF if Budget 2013 is approved and moved in Parliament. (mildly is my guess).
C) ARF (Additional Registration Fees) 100% of the OMV based on the existing ruling before Budget 2013. This translates to a pure gravy transfer from our bank account into the government coffer.
With Budget 2013, a new tier ARF tax structure is in place. If the OMV of your dream vehicle is;
Example: OMV of an Entry level BMW 320I is currently at $36, 486 (Based on the link above). The ARF for this vehicle will now be 100% of the first $20,000 and 140% of the remaining $16,486 which is $23,080. Adding both $20,000 and $23,080 gives you the final ARF of $43,080.
You are now paying an extra $6594 ($43,080 - $36,486) because the OMV is > $20,000. So in short, the higher the OMV, the more ARF you pay.
D) Custom Duty: 20% of the OMV. This is a straight up additional form of duty fees imposed on top of the ARF that goes straight to the Government account.
E) GST: 7% GST on the Custom Duty + OMV. A form of consumption taxes that is imposed to transfer your hard earned cash into the government account based on the value of goods that you have consumed.
F) Registration Fees of $140. (Well, someone needs to do the administrative tasks and all the paperwork required right? We have a first world civil services and they really need to be paid).
G) Vehicle Plate Fees of $30. You wheels needs to be properly identified and tag so that it makes our friendly “Summon Auntie” job easier. They do need to take down your car license plate if you have over parked or parked in a lorry lot (sounds familiar?), or for our brave TP who chases you down the PIE at 150km/h.
H) Whatever else more you paid on top of the 7 points above = Authorized Dealer’s profit. You can’t expect them to do all this for you for free, can you? Btw, this is a really very huge margin after you do your calculation. But I don’t blame them. They need to pay good commission to their Sales Executives and also on their marketing campaign (VW is really good at that I must say). In addition, as one of my friends, KC had pointed out, the AD also bears the Warranty of the vehicle for whatever amount of years they promised to you in the sales agreement, together with an "X" number of times of free servicing which they deem ok to dish out.
I) CEV (Carbon Emission Vehicle) Rebates or Surcharge: Finally, after all the 8 points above, we are finally getting some form of rebates (or Surcharges Ha-ha). To keep things simple, rebates are given from $0 to $20,000 if your vehicle is environmentally friendly and penalized with Surcharge from again $0 to $20,000 if it pollutes mother nature and our ozone layer.
To put things into perspective, I will provide an example of a cost breakdown of all factors listed above that makes up the car prices with the New Tier Tax Structure on the ARF with 2 examples below. (I.E. Friendly Family Toyota Altis 1.6L, and a Higher end Luxurious BMW 320I 2.0L )
* Assumption: I have not included the CEV into the calculations for both examples.
* I have also used the COE based on the 2nd Open Bidding for Month of Feb-2013 with the New Tier Tax structure on OMV > $20,000 in Example 2 below for the BMW 320I 2.0L
* Please also note that OMVs values are not always the same even on the same model of vehicles and they fluctuate with every shipment (mild fluctuation really). This in turns cause ARF values to change as well as Custom Duties and GST. Of course COEs are on bidded basics as well. Therefore car prices are always volatile.
Example 1: Toyota Altis 1.6L
1. OMV: $15,270
2. COE: $78,301 (Based on 2nd Open Bidding for Month of Feb-2013 for CAT A)
3. ARF: $15,270 (100% of OMV only since OMV is less than $20,000)
4. Custom Duty: $3,054 (20% of OMV)
5. GST: $1,283 (Based on 7% of OMV + Custom Duty)
6. Registration Fees: $140
7. Vehicle Plate Fees: $30
Total Cost of Car: $113, 348 (Add up all 1 to 7 together)
Borneo Motor List Price: $139,988 (Price with Guaranteed Gold COE within 3 months from Borneo website)
Difference: $26,640 (Translates to Profits for Borneo Motor or whatever they can keep after their operating costs are subtracted.)
Example 2: BMW 320I 2.0L
1. OMV: $36,486
2. COE: $92,667 (Based on 2nd Open Bidding for Month of Feb-2013 for CAT B)
3. ARF: $43,080 (Additional Tax Structure of 140% applies to excess $16,486)
4. Custom Duty: $7,297 (20% of OMV)
5. GST: $3,064 (Based on 7% of OMV + Custom Duty)
6. Registration Fees: $140
7. Vehicle Plate Fees: $30
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