Cars are no doubt an expensive investment— but they are also necessary, get us from point A to point B, and can also be extremely beautiful and fun to drive. Plus, what's better than that new car smell?
Of course, in order for you to buy a car, you must figure out how you will pay for it. Most of us don't have tens, even hundreds of thousands of dollars laying around to use to purchase a vehicle. In that case, you will need to look into financing.
Keep reading to learn all about financing your car in Singapore.
Let’s start with the fees.
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OMV (Open Market Value)
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The OMV refers to the “real” purchase price of the car without counting Singapore-specific taxes and duties, like COE. The OMV is how much your car would cost in countries where car ownership isn’t so heavily taxed.
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COE (Certificate of Entitlement)
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The Certificate of Entitlement is a legal document that lets you drive your new wheels in Singapore for five or ten years. The cost is currently near $40,000 but it is a cost that fluctuates a lot because it is dependent on market demand.
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Additional Registration Fee (ARF)
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A tax you are required to pay when you register the car. This fee is based on the OMV and is at least 100% of the OMV.
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PARF (Preferential Additional Registration Fee)
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Cars less than 10 years old are eligible to receive this PARF rebate as long as you decide to deregister the car before the COE expires at the 10-year mark.
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Excise Duty
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Excise duty is an extra tax you must pay for certain goods, including alcohol and tobacco. The excise duty for cars is 20% of the OMV.
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GST (Goods & Services Tax)
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GST (Goods & Services Tax)
You must pay GST on the OMV + excise duty. Currently, this is 7% but it is expected to rise to 9% in the coming years.
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How much can I borrow for a Car Loan in Singapore?
Take a look at the maximum amount you can borrow based on the car’s OMV:
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Open Market Value (OMV)
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Maximum amount you can borrow
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Up to $20,000
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70% of the purchase or valuation price
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More than $20,000
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60% of the purchase or valuation price
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This is the maximum, and the amount that banks actually agree to maybe far less. They will decide what to offer you based on your monthly income, expenses, and credit score. You will need to make sure you are at least financially equipped to handle a down payment of 30% or more— this must be paid for in cash.
Car Financing Options in Singapore
There are three car financing options to choose from in Singapore:
1. The car dealer's in-house financing
2. Bank loan through a car dealer
3. Loan directly through a bank or other financial institution
The most convenient option is the dealer's in-house financing as dealers tend to sweeten the deal with attractive benefits. Our team at Hin Lung Auto Pte Ltd can customise a financing plan according to your personal requirement.
If you're looking for a new car in Singapore, count on the expert team at Hin Lung Auto. We have more than 30 years of experience in the auto industry, and we are dedicated to providing the best experience possible to our customers. Our mission is to be one of Singapore's leading companies in the automobile industry. Our focus is on maintaining a standard of excellence and achieving customer satisfaction. Contact us today, and let's find you a beautiful car in Singapore.