There’s no sugarcoating things, owning a car in Singapore is an expensive exercise, which is why many prefer to rely on public transport and ride share services. However with the ongoing COVID-19 virus and currently without an available vaccine, for many, it may no longer be conceivable to go without a dedicated vehicle. While the timing for a big purchase could be better, the overall benefits of car ownership are plentiful in the long run. Right now, it could even save you some money.
COE prices are low, possibly falling further
Regardless of whether you choose to buy a new or used car, you first need a Certificate of Entitlement (COE) for the right to own a car, and you can either bid for the COE personally, get a dealer to do it for you, or source a car that comes with one. Historically, the COE for Category A and B (1000cc-1600cc vehicles) trends north of $30,000 but in March 2020 was at $31,210 and $30,012 respectively, down from $35,320 and $37,109 in January 2020 due to the Coronavirus crisis. While car sales demand during this period have been relatively weak, prices may still fall further, “discounting” an expensive purchase which you’ve already been considering.
There’s a good chance you’ll score a deal
With car showrooms and dealerships closed during the 2020 Circuit Breaker, for the consumer, this has been a good thing. Every day that a car sat unsold in a showroom, it costs the seller money. This means car sellers will be more open to offering discounts or freebies to get rid of inventory. Do your research – look at different dealers, read online reviews, sift through the various car websites for information – and decide if buying a new, used or leasing a vehicle works best for your use case. Some automobile manufacturers like Mazda and Borneo Motors (Toyota, Lexus, Suzuki) have pivoted to offer contactless sales allowing you to take delivery of the vehicle later – another bargaining chip to push for a better price. Another upside, if COE prices rise, the fact that you’ve already booked the car means your price is locked in. Just keep in mind COE bids close on first and third Wednesday of the month so avoid those days to finalise your purchase as some dealers have been known to raise prices before the bids close to hedge their bets.
Take advantage of competitive prices
With car production mostly halted globally, car sales and prices have understandably fallen and if you’ve been planning to buy a car, the price right now might present some cost savings. Looking at One Shift’s Price Movement report, the prices of Singapore’s most popular car models from Mitsubishi, Kia, Honda and Subaru have already fallen by a decent amount. While there’s no predicting what will happen during the post-Circuit Breaker era, it’s unlikely that car prices will increase sharply with people likely to take a cautious economic approach and unlikely to spend on a big ticket item spontaneously.
It’s never been easier, or faster to get a car loan
60 seconds. That’s all it takes to get a car loan approved by OCBC thanks to a Fintech solution combining MyInfo and their proprietary real-time KYC and credit assessment system. Forget the tedious forms, or waiting a few days for approval, provided you’ve got all the paperwork required and have done your sums, you’ll know the outcome instantly. Finance wise, just keep in mind if the car’s Open Market Value (OMV) is $20,000 or below, you can borrow up to 70 per cent of its price. OMV’s above $20,000, can only borrow up to 60 per cent and loan tenures are capped at seven years. If you already have a home loan, your maximum monthly repayments, inclusive of the car loan, will be capped at 60 per cent of monthly income. So make sure you crunch the numbers beforehand to avoid being rejected.
You don’t need a license to purchase a car
It’s a little known fact but individuals without a license are still eligible to own a car. You won’t be able to drive it till a license is obtained but you can name a main driver (say your spouse, parent etc…) during the car insurance process, and apply for a Insured Not Driving policy for yourself and update it at a later stage. As a foreigner, only a proof of employment is required (or be prepared to pay some exorbitant fees) and you can even drive on your own country’s permit for up to a year, so long as a valid International Driving Permit is simultaneously held. After the year has passed, a Singapore driving license will be required, for most, this will constitute passing the Basic Theory Test and some straightforward paperwork.
Say goodbye to hunting for delivery slots
Who knew 2020 would be a year marked by endless hours clicking online hoping to secure a RedMart delivery slot? Having a car puts a stop to that, or at least reduces the reliance. Now, you can drive to Giant in Tampines, FairPrice Xtra at VivoCity and Warehouse Club in Joo Koon to load up on everything you need – including all the toilet paper and instant noodles you desire.
You’re paying for peace of mind
By now, we all know that the coronavirus spreads easily through the air thanks to the droplets produced when one talks, sneezes or coughs. Donning masks and gloves while commuting can guard against viral droplets but prolonged exposure in a crowded MRT train or bus will probably leave you (and your family members) feeling a little uneasy. While getting about in a personal car won’t 100 per cent guarantee against catching the virus, it does reduce exposure to general members of the public and possibly lower the chances of getting infected. If you’re someone who puts a high value on peace of mind, buying a car might suddenly become a bigger priority overnight.
Getting out of dodge
As Singapore irons out its green lane travels with countries like South Korea and Australia, you may still feel a little uneasy getting on a plane anytime soon. If your 2020 travel plans are looking more like Punggol, Sentosa and Bishan, owning a car will change that. Aside from giving you the freedom to drive for your favourite hawker meal – pro tip: da pao and have it in the car park – and finally being able to visit your folks, the opportunity to go on a road trip just became a viable option. Relive those family holidays from your childhood and rediscover the islands, beaches and cities of Malaysia. If the spirit of adventure calls, go further to Thailand. It’ll take at least three leisurely driving days to get to Hat Yai, and if the goal is Bangkok, give yourself at least five days one-way. Just keep in mind that most car insurance policies are valid up to 80km from Malaysia border and into Peninsular Thailand. Providers like Aviva though will handle all claims with car insurers including those in Malaysia, while MSIG MotorMax and MotorMax Plus covers damage caused by accidents, fire and theft including falling trees and flood related damages, as well as malicious damage caused by unknown persons.