Buying a commercial vehicle can help your business grow. Be it for delivering items or visiting clients, it can be a useful asset.

 

Here’s how to go about purchasing a commercial vehicle under your business.

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How to own a commercial vehicle in Singapore

In Singapore, only registered companies can purchase a commercial vehicle. Individuals are not allowed to buy a commercial vehicle for personal use, unless he or she holds a hawker license from the National Environment Agency.

When you purchase a commercial vehicle, you will need to bid for a Certificate of Entitlement (COE) before it takes to the road. The COE will be under Category C, which is for Goods Vehicle & Bus. You could also register it under a Category E COE — an open category — but be prepared to pay higher COE prices.

Do note that commercial vehicles only have a maximum lifespan of 20 years. You would still need to renew your COE after the first tranche of 10 years is up, but you won’t be able to continue using it after 20 years, even if you wish to renew its COE. You will have to dispose of the vehicle (read on to find out how).

Just like private cars, you will need to pay $220 to register your commercial vehicle. 

As for financing, you will be able to get up to 90% for your commercial vehicle, as compared to passenger cars which can only receive up to 70% financing.

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Commercial vehicle types in Singapore

According to the Land Transport Authority’s (LTA) website One Motoring, there are four main types of commercial vehicles here.

The category your vehicle falls under would determine its Additional Registration Fees (ARF) and amount of road taxes you would have to pay for it.

For most of them, the ARF is 5% of the vehicle's OMV, except for Goods-cum-Passenger Vehicle, where the ARF is similar to passenger cars. This makes many commercial vehicles cheaper than regular private cars.

Let's go into further detail:

1. Light Goods Vehicle (LGV)

Maximum laden weight (MLW): up to 3,500kg

Additional Registration Fees (ARF): 5% of OMV

Light Goods Vehicles (LGV) are lorries and vans that may be utilised to carry goods; or they could be minibuses which have a maximum seating capacity of up to 15 passengers. Your road tax depends on the type of LGV you are driving:

Type  Diesel and Diesel Hybrid Petrol and Petrol Hybrid
6-month road tax $213 $170

 

2. Heavy Goods Vehicle (HGV)

Maximum laden weight (MLW): 3,501kg to 16,000kg

Additional Registration Fees (ARF): 5% of OMV

HGVs are commercial vehicles such as big lorries and trucks. The road tax you need to pay depends on the MLW in metric tonnes:

MLW in metric tonnes 6-Monthly Road Tax
Diesel and Diesel Hybrid Green and Petrol
3.5 < MLW ≤ 7 $328 $262
7 < MLW ≤ 11 $362 $289
11 < MLW ≤ 16 $489 $391

 

3. Very Heavy Goods Vehicle (VHGV)

Maximum laden weight (MLW): Above 16,000kg

Additional Registration Fees (ARF): 5% of OMV

VHGV have a maximum laden weight (MLW) of above 16,000kg, and include garbage trucks, prime movers and large container trucks.

Your road tax is calculated based on your vehicle’s MLW:

MLW in metric tonnes   6-Monthly Road Tax
Diesel and Diesel Hybrid Green and Petrol
16 < MLW ≤ 20 (2 axles) $850 $680
16 < MLW ≤ 20 (3 axles) $553 $442
20 < MLW ≤ 26 $765 $612
26 < MLW ≤ 32 $765 $612
32 < MLW ≤ 40 (4 axles) $1,190 $952
32 < MLW ≤ 40 (>5 axles) $850 $680
40 < MLW ≤ 55 $1,275 $1,020
MLW > 55 $1,488 $1,190

 

4. Goods-cum-Passenger Vehicle

Maximum laden weight (MLW): Up to 5,000 kg

Additional Registration Fees (ARF): Varies according to OMV, like passenger cars

Goods-cum-Passenger Vehicles (GPV) are vehicles with MLW of up to 5,000kg. Depending on their MLW, they can be classified as LGVs or HGVs. GPVs are meant to transport both goods and passengers.

The ARF is similar to that of passenger cars, as follows: 

Vehicle Open Market Value (OMV) ARF Rate (% of OMV to pay)
First $20,000 100%
Next $30,000 (i.e. $20,001 to $50,000) 140%
Above $50,000 180%

 

Your road tax is calculated based on the maximum laden weight of your GPV:

MLW in metric tonnes 6-Monthly Road Tax
Diesel and Diesel Hybrid Petrol and Petrol Hybrid
MLW ≤ 3.5 $372 $298
MLW > 3.5 $487 $390

 

Across all categories, vehicle owners will enjoy a road tax rebate of 75% from Aug 1 2020 to July 31 2021. This will be reduced to 50% from Aug 1 2021 to July 31 2022.

Commercial vehicle COE 

As of November 2020, the Category C COE price was $31,502 while Category E COE was $39,500.

Commercial vehicle insurance in Singapore 

A number of insurers offer commercial vehicle insurance. In addition, many offer add-ons which could allow you to repair your vehicle at a workshop of your choice, coverage for other vehicle accessories, protection against floods and windstorms, and more.

Here are some of the major insurers, as well as their policy highlights (non-exhaustive):

Insurer

Commercial Car Insurance Policy Highlights

AIG

  • Accident repairs at the workshop of your choice
  • Windscreen replacement cover
  • Cover for liability to third parties and your passengers
  • Cover for loss or damage
  • Caused by an intentional act by a party during a strike, riot or lockout
  • Protection for vehicle lock and keys

Aviva

  • Covers loss or damage to your vehicle due to accidental collision 
  • Windscreen coverage
  • Injury to you or your passengers
  • Your legal liability to third party’s (including your passenger’s) injury and property damage.
  • Add-ons: additional accessories, any workshop extension, brand new vehicle replacement

Liberty

  • Vehicle, spare parts and accessories
  • Accidental loss or damage by fire
  • Loss or damage by theft
  • Accidental loss or damage by other insured causes
  • Accidental loss or damage to windscreen
  • Legal liabilities for death or bodily injury to third-party, loss or damage to third-party property, your legal costs and expenses

Sompo

  • Accidental damage to your vehicle
  • Damage arising from riot, strike and civil commotion
  • Damage to other parties' property
  • Death or injury to other parties
  • Fire damage to, or theft of, your vehicle
  • Windscreen damage

Ergo

  • Cover of the Motor Vehicle against accidental loss or damage (up to market value at the time of accident)
  • Cover of the Motor Vehicle against fire or theft (up to market value at the time of loss)
  • Loss of or damage to the Motor Vehicle due to Flood & Strike, Riot & Civil Commotion
  • Third Party Property and Injury Liability
  • Legal liability of Passengers for Acts of Negligence
  • Windscreen Cover
  • Reimbursement of accident-related towing expenses (up to S$200)
  • 24-hour Mobile Accident Response Service (MARS)

China Taiping

  • Choice of Workshops with AutoExcel 
  • Option to protect your No Claim Discount (NCD)
  • Complimentary windscreen benefit
  • Option to enhance protection against third party property damages
  • Additional coverage for Strikes, Riots or Civil Commotions, Floods, Typhoons, Hurricanes, Cyclones, Tornados and other convulsions of nature.

 

How to scrap commercial vehicle 

When you deregister your vehicle, you must dispose of it by scrapping it at an LTA-appointed scrapyard, exporting it or storing it temporarily in an LTA-appointed Export Processing Zone (EPZ) pending export.

You can engage a motor dealer to help you dispose of your vehicle. For added assurance, use CaseTrust-SVTA accredited motor dealers.

After disposing of your vehicle, you may be granted PARF/COE rebates, depending on the type and age of your vehicle and your vehicle’s COE expiry date.

It is an offence if you fail to submit proof of disposal of your deregistered vehicle to LTA on time. It is also an offence to keep or use a deregistered vehicle.

You can apply to deregister your vehicle online using SingPass/CorpPass 2FA.  For users who are not eligible for SingPass/CorpPass, please write in via www.lta.gov.sg/feedback to make an appointment to deregister your vehicle at LTA Customer Service Centre.

 

Is it okay to drive a commercial vehicle for personal use? 

Since commercial vehicles are cheap and you can get higher loans, some among us may be thinking of driving a commercial vehicle for personal use.

For instance, it's not uncommon to see drivers place a sofa at the back of their mini van, so they can transport more passengers.

But before you get any ideas, take note. According to LTA, it is an offence to use commercial vehicles for personal usage and transportation. If convicted, vehicle owners face fines of up to $1,000 or imprisonment of up to three months upon first conviction. For second and subsequent convictions, offenders may be fined $2,000 or imprisoned for up to six months.

As mentioned above, only registered companies or licensed hawkers can register a commercial vehicle, and it can only be used to carry goods and/or employees of the business. 

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Further Reading:

 

GoBear team

Brought to you by GoBear Insurance Broker (SG) Pte. Ltd., a registered insurance broker with the Monetary Authority of Singapore

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